Booming OTT drives rapid CE growth
Joseph O'Halloran ©RapidTVNews | 09-11-2011 As video service providers seek new revenues opportunities and look for ways to differentiate their offerings such as with over the top (OTT) services, one key beneficiary has been the consumer electronics (CE) market.
Data from IMS Research forecasts that by 2016, over 133 million TV households worldwide will be accessing OTT content via their pay-TV set-top box and that the expansion of OTT service providers such as Netflix and Amazon will lead to connected CE devices in the home accounting for 27% of all OTT video transactions, a 6% rise on 2010 revenues.
The analyst sees pay-TV operators aggressively addressing the rise of OTT offerings by expanding on-demand portfolios, focusing on original content and offering Internet-based video services
Commented report author Anna Hunt: “Netflix’s aggressive pursuit of increasing the geographic reach of its OTT service illustrates to the need for OTT service providers to expand their serviceable target market if they want to grow revenues.”
Ye the report also cautioned that success is no given thing and recognition of local market conditions will be crucial.
Added Hunt: “OTT service providers will need to be flexible with their strategies once they expand into new markets, considering market dynamics such as broadband availability, competition and content licensing.”
The analyst then cited as an example Netflix’s library of content which in Latin America was quite limited in comparison to its portfolio in the US, even though it says that the market is ripe for growth in digital and OTT entertainment services. It also noted that the leading OTT service’s success in the UK and Ireland will depend heavily on their content portfolio, coming up again established OTT providers such as Amazon’s LOVEFiLM and Tesco’s Blinkbox.