OTT TV services refers to video content that is delivered directly to digital users. The signal is received over the Internet or through a mobile phone network, as opposed to receiving the television signal from a terrestrial satellite or broadcast. Consumers can access OTT content through Internet-connected devices. As Internet usage has become more mainstream, there has been a gradual shift in consumers’ viewing habits; moving away from traditional cable and pay TV to increased consumption of video streaming services, produced by online video giants such as Amazon Video, Netflix, and Hulu.
As a result, the OTT industry is currently booming, and recent years have seen continual shifts in the video services landscape with explosive growth of OTT services. Indeed, whilst almost every other area of home entertainment spending has declined over the past five years, OTT video has seen significant revenue growth, as consumers continue to embrace it. Visual entertainment as a communal medium based around linear TV programming is losing its significance, as users can watch their favourite shows/videos streamed on-demand straight on smartphones, smart TVs, tablets, and laptops in full HD quality.
As the demand for video streaming services has risen, the landscape has become more competitive, with new players entering the space and attempting to challenge the hegemony of the established industry leaders. Since 2019, we have witnessed the launch of Disney+; Apple has launched its own streaming service, Apple TV+, and AT&T’s WarnerMedia streaming service HBO Max was released in May 2020. In addition, there are also many smaller, niche-focused streaming services that have relatively recently entered the crowded arena, such as Crunchyroll, The Criterion Channel, and sports streaming services, such as DAZN.
The intense competition of the OTT streaming marketplace is motivating providers to seek alternative revenue channels, and the market is seeing greater experimentation with hybrid monetisation models, as providers combine ad-free subscription content. For example, providers are increasingly considering following Disney+ in its decision to bundle its catalogue with that of other content producers. Others, instead, are integrating hybrid monetisation models, such as Peacock, the streaming service owned by NBC Universal, which has introduced a tiered system with Free, Premium and Premium Plus tiers.
With more and more subscription services on the market, potential ‘subscription fatigue’ looks increasingly more likely. For this reason, we predict that hybrid monetisation of ad-supported content will become commonplace.
Our latest whitepaper, Tuning into the Future of Video Streaming, analyses the current OTT TV & video subscriptions landscape, as well as highlighting new trends shaping this dynamic market.
Download the Whitepaper: Tuning into the Future of Video Streaming