OTT to flourish over connected TV - but no time soon

Joseph O'Halloran ©RapidTVNews | 26-03-2012

In the latest of its World Connected TV Market Insights, research firm IDATE is predicting that even though it won’t dent linear TV revenues, the OTT market will flourish over connected TV.
The analyst believes that overall the TV sector is facing a profound restructuring, as players from formerly disparate sectors converge on the market with over the top (OTT) services over new platforms such as connected TVs.
However the analyst predicts that the conditions for the launch of new connected TV services has not yet been completely met and will not likely do so until 2015. After a growth spurt at that time, IDATE expects that in 2016, OTT video services on connected TV will amount over two billion Euros, representing 17% of the total OTT market and 1% of the global fixed video services market.

The analyst anticipates that paid services will play a leading role in the development of connected TV services and that we are actually nearing the end of both cord-cutting and cord-shaving. Globally, it believes that the paid services will represent 57% of the market for video services on connected TV.

Going forward, IDATE sees advertising revenue being primarily derived from the operation of premium programmes with consumption of short programs and of UGC contents likely to remain largely limited to PCs, smartphones and tablets. “In 2016, the VOD market for the TV will be dominated by over-the-top (OTT) offers. In Europe, we estimate the global market for OTT video services on connected TVs at €2.4 billion in 2016, with Europe and North America representing respectively 17% and 54%”, revealed Jacques Bajon, head of the analyst’s video distribution practice.
“Managed network players - cable and IPTV providers, for instance – are holding one of the key drivers for the Connected TV market development. They can continue their strategy of service distribution or open massively their networks to over-the-top services giving a boost to their commercial offers.”