A report from business-to-consumer subscription management solutions specialist Vindicia has found that premium OTT subscription revenue is quickly rising across four regions: Western Europe, USA, Latin America and Asia Pacific, and that consumer demand for premium OTT services will be driven by local, live and linear content, as well as by easier payment solutions.
The report, The Prospects for Premium OTT, carried out by international research and strategy consulting firm MTM, revealed that premium OTT in Western Europe will grow strongly in the next three years, as connected consumers embrace not only services from global OTT players, but also new subscription services from local and regional broadcasters, and direct-to-consumer services from content brands. The UK will remain the largest market for premium OTT in Western Europe, with revenues forecast to rise from $1.18 billion (€1.32bn) in 2017 to $1.63 billion by 2020.
Meanwhile, in the US, premium OTT subscription revenue will surge past $21.2 billion by 2020, up from $16.4 billion in 2017. While Netflix, Amazon and Hulu will dominate revenues, new competition will come from direct-to-consumer offerings from the likes of Disney, specialist services such as Crunchyroll and WWE, and live sports delivered via OTT, according to the report.
Revenues from premium OTT services will also grow rapidly in Asia Pacific, albeit from a low base in some cases. Thailand, for instance, will see revenues rise from $66 million in 2017 to $108 million in 2020, while Indonesia will expand from $26 million to $ 72 million in the same period, the report found. The market for premium OTT services in Asia Pacific will be driven by pan-regional players, such as HOOQ, Viu and iflix, that focus on local content and are priced for local audiences.
The premium OTT market in Australian is one of the largest in Asia-Pac and will continue to see considerable growth, with revenues reaching $420 million by 2020, up from $280 million in 2017, the study found. Netflix will be the dominant subscription service in Australia for the foreseeable future.
In Latin America, improved broadband connectivity is driving growth in premium OTT subscriptions, where local content offerings are bundled with Internet access. However, greater connectivity is also encouraging content piracy. Mexico will become the largest market in Latin America for premium OTT services by 2020, with revenues forecast to reach $678 million, up from $410 million in 2017, according to the report.
“As revenues for premium OTT services increase in all regions around the world, consumer demand will be driven by local, live and linear content,” said Kris Nagel, Head of Vindicia. “Consumers will become subscribers for the right price, the right content and the right experience. As part of that experience, consumers will also demand frictionless payment solutions. Premium OTT services that can seamlessly integrate and manage payment platforms—and make payments almost invisible to the user—will see the greatest subscription growth going forward.”
download the full report here.
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