Study: Rising global demand for premium OTT

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.

read more here:

Online video adspend to rise a whopping 27.5% this year

Advertiser expenditure on online video continues to grow rapidly thanks to a boom in mobile consumption and most of that spending is going on social platforms – despite concerns over brand safety and ad fraud – according to a WARC report.

The latest monthly Global Ad Trends report focuses on online video and says that expenditure on the medium – inclusive of pre/mid/post roll, social and broadcaster VoD – is expected to rise 27.5 per cent to reach $29.8 billion this year.

And with linear TV advertising increasing at just 1.1 per cent this year, online video is taking an ever greater share of the total video advertising market – 17.5 per cent in 2018.

The shares vary widely between markets, however. In the UK, online video is expected to account for 38.2 per cent of all video adspend this year; in China the figure is 24.7 per cent while in the US, the largest video market by far, the figure is 19.3 per cent.

With over 60 per cent of daily online video viewing now on mobile devices, most of this money is going to mobile-optimised social platforms such as YouTube and Facebook, the report says.

UK data from the AA/WARC Expenditure Report, for example, shows that of the £1.6 billion spent on online video advertising last year, 81.2 per cent (£1.3 billion) was paid to social platforms (up from a share of 55.4 per cent in 2014).

“The vast and continuing increase in video consumption via mobile devices has directed ad dollars to social platforms, despite the well-documented and persistent risks around negative adjacency and ad fraud,” said James McDonald, Data Editor, WARC.

Data for the second half of 2017 shows that at least one in ten online video ads pose a risk of negative adjacency to brands. And a recent study by Guardian US and Google found that as much as 78 per cent of video spend is susceptible to fraud if the publisher does not employ the ads.txt script within their website.

“Facebook hopes to regain the initiative with its Watch platform, which is being positioned as a safe brand environment offering advanced audience segmentation”, McDonald noted.

As influencers account for more than half of video views on Facebook, advertisers are increasingly turning to them to build brand equity and deliver their messaging aside approved content.

read more here:

Global pay-TV revenues ready to plunge

After peaking in 2016 at $205 billion, and despite the number of pay-TV subscribers projected to rise by 9% over the next five years, global pay-TV revenues are set to fall by 11% to $183 billion by 2023, says a report from Digital TV Research.

The Global Pay-TV Revenue Forecasts report says that the key driver for the decline in revenues per subscriber is due to more homes converting to bundles. It estimates that eight of the top ten countries will lose pay-TV revenues between 2017 and 2023, while revenues will decline in 47 of the 138 countries covered in the report between 2017 and 2023. Twelve countries are set to lose more than 10% of their revenues leading to a total global decline of $19 billion.

Looking at specific territories, Digital TV Research found that US pay-TV revenues peaked in 2015, at $102 billion and forecasts a $22 billion decline between 2017 and 2023 to take its total down to $75 billion. By contrast, China will gain nearly $1 billion in pay-TV revenues between 2017 and 2023 to bring its total to $13 billion while India will provide the largest increase in pay-TV revenues at $1.6 billion. Revenues will more than double for six countries between 2017 and 2023. Eight of the top ten fast-growth nations by percentage increase will be in Africa.

On platforms, Digital TV Research believes that satellite TV and digital cable TV revenues will continue to be broadly similar. Revenues for the former were $83 billion in 2017; falling to $77 billion by 2023 and digital cable TV is set to supply $76 billion in 2023; down from $85 billion in 2023. The Global Pay-TV Revenue Forecasts report rates IPTV as the pay-TV revenue winner, with revenues increasing from $25 billion in 2017 to $27 billion in 2023.

CBS is going global with OTT

CBS is providing a model for what OTT delivery can be and somehow the rest of the network tv world is missing the boat. This week CBS made a few momentous announcements. One is that CBS All Access is going to become available outside of the US. NBC, ABC and Fox do not have that sort of reach at the moment nor have they made any announcements indicating a plan for it. Hulu, which of course is the easiest way to stream content from those networks without having an authenticated app has grown considerably over the past year domestically but the service is not available to over seas viewers.

It can’t be overstated that a major part of Netflix’s growth has been due to its international reach. What will be interesting is to see if CBS expands its offerings to cover programming that is popular in the regions it expands to or will partner with terrestrial broadcasters overseas to offer live streaming in the same way it does in the US.

Even without international expansion, the network has seen strong results so far. CBS owned Showtime has proven successful as an over the top product as well. CBS says that there are over 4 million subscribers to Showtime and CBS All Access combined, while not on the scale of Netflix and its 128 million plus users, it is solid growth for a relatively new service.

That is not the only thing CBS is rolling out though. It will be launching an OTT sports channel in the same vein as CBSN. Why is that important? Because CBSN is a free 24-hour service. The network is available via its website, apps on a number of platforms as well as through the CBS All Access app. While the news is live, it does not show the actual CBS Nightly News program. Though it should be noted that it did air a 2016 presidential debate live.

The question on the minds of cord cutters, of course, is whether CBS will put live sports on the internet or will it be a free 24-hour sports news network. There are now numerous examples of online operations streaming sports including Facebook’s MLB streaming, Amazon, and the NFL have a pact for Thursday Night Football and Twitter has deals to stream MLB, PGA and WNBA games.

read more here:

Global pay-TV subscribers total 969MN in 2016

A study from Digital TV Research has found that 2016 saw an estimated 254 million additional pay-TV subscribers between 2010 and 2016, an increase of 35%, to take the global total to 969 million.

The Global Pay TV Subscriber Databook found that digital cable TV created the most additions by platform – at 256 million between 2010 and 2016 just as analogue cable TV lost 218 million, dampening overall cable gains. There were 76 million extra subs for IPTV to nearly quintuple its total. Satellite TV added 77 million subs and pay-DTT five million. The survey also showed that excluding analogue cable TV, the digital pay-TV market rocketed from 380 million subscribers in 2010 onto 852 million at end-2016.

Looking at regions, the survey found that pay-TV subscriber counts doubled in 53 countries between 2010 and 2016. The Asia Pacific was the world’s largest pay-TV subscriber region, contributing three-fifths to the global total. China supplies about a third of the world’s pay-TV subscribers, with 313 million by end-2016. However, the research also noted that pay-TV subscriber numbers fell in nine countries, with the US down by 4.4 million and Italy by 2.3 million.