Over-the-top (OTT) pay-TV revenue is forecast to grow from $5.8 billion in 2014 to just over $10 billion in 2018, growing significantly compared to cable TV, satellite TV, and IPTV in the pay-TV segment, according to Infonetics' Pay TV Services and Subscribers report . Overall the global market has witnessed an increase of 3.9% to reach a total of $117 billion in the first half of 2014 compared to the first half of 2013.
According to Infonetics, satellite and telco pay-TV service revenue continues to grow, driven by new subscribers and increased average revenue per user (ARPU) in North America and Western Europe. However, Infonetics noted that much of the increased revenue per user is being offset by ever-increasing content costs. Pay-TV subscribers reached 837 million in first half of 2014, growing 10% over 2013, with the strongest growth again coming from the telco pay-TV segment.
Jeff Heynen, Principal Analyst for Broadband Access and Pay TV at Infonetics Research
Subscription-based over-the-top (OTT) providers like Netflix, Hulu Plus, and Amazon have seen phenomenal growth over the last couple of years. With a combination of wide availability across end devices, user-friendly interfaces, and access to vast content libraries, these providers continue to challenge traditional pay-TV providers and are in the early stages of siphoning off revenue. OTT providers are now expanding their relationships with traditional pay-TV providers to get their apps and services integrated directly onto consumer set-top boxes (STBs), gaining access to a much larger pool of current pay-TV subscribers.