Over the top (OTT) platforms provide media services to people via the internet. It is mostly a a subscription based video on demand service model that gives consumers access to view films and shows.
The global OTT platform is worth about $121.61 billion as of 2019. By the end of 2021 it is said to be valued around $177 billion. This is said to further rise over $1 trillion by 2027 with an annual growth that’s around 30%.
This segment generates its core income that is roughly a little over 51% from advertisements of videos on demand, then we have subscriptions which contribute 40% of the income, about 5% comes from pay per view also known as transactional videos on demand and finally around 3% through downloads.
Netflix, Apple TV, Amazon Prime, Disney plus HotStar are some of the biggest leading OTT platforms all over the world.
North America holds the biggest market when it comes to OTT consumption. During the pandemic year it was reported that there are 164 OTT subscriptions for every 100 households in the United States and 132 in Canada. After North America is China with 68 subscriptions for every 100 houses.
Netflix is the biggest OTT platform in the United States when it comes to revenue, it holds a market share of 30.8% and is said to only grow further in the near future.
Staying indoors and movement restrictions gave people a little more time on their hands and thus a lot of them choose to keep themselves occupied and distracted to get by each day through such mediums and forms of entertainment.
There was a record 115% jump in OTT streaming to TVs between 2020 and 2021 alone. During the last quarter of the pandemic year over 239 billion hours were approximately spent on video streaming platforms and applications via mobiles phones.
The British Association for Screen Entertainment has suggested that consumer spending on digital movie purchases had grown by at least 87% during the lockdown period and to $148 million.
As the unprecedented pandemic has had a positive impact on this segment the projected growth figures might be a low estimate.
THE SAD SIDE OF OTT BOOM
OTT emergence and growth has had a big negative impact on traditional TV channels. Several channels have been forced to reduce content, shift online, or shut down altogether due to change in taste and preferences of consumers. Even sports and news has been showing rising trends in the online segment compared to traditional TV.
Recently Warner announced that it’s shutting down HBO and WB TV channels in India. This is one such example of how emergence and growth of OTT platforms have forced these giants to adopt the new medium which was majorly fueled by the ongoing pandemic. The HBO brand is currently present in India through Disney’s OTT platform.
“OTT is the new Goliath around that is making linear pay TV channels look like pygmies. OTT is becoming the aggregator of content of every genre. In an era where one is looking at everything with a one stop shop approach, OTT with its content width and newly seen aggression with exclusive OTT releases, thanks to the pandemic and shut cinemas, is on a roll. This will mean more closures and pull outs by linear pay tv channels. The Warner Media action is the first among many to come,” Harish Bijoor, the founder of Harish Bijoor Consults Inc said.
The OTT segment is going to dominate the digital content media sector in the future largely due to affordable android based smartphones, increasing and faster internet connectivity across the world along with wider quantity and quality of content.
The Asia-Pacific nations are expected to have the highest and fastest growth rate largely due to telecommunication services providers offering OTT platform services with their data plans along with ease in regulations and policies by the government when it comes to content on such platforms.