OTT rental revenues set to surpass subscription by 2014

Joseph O'Halloran | 02-11-2012

Over-the-top (OTT) revenues are set to quadruple to $32 billion over the next five years, rising from an expected $8.2 billion in 2012, with rentals surpassing subscription revenues from the likes of Netflix, according to a new report from ABI Research.
The OTT and Multi-screen Services report says that, led by Netflix subscription, services have prospered over the last few years but in time other revenue streams — notably advertising and rentals — will gain momentum. This is attributed to ad dollars increasingly shift to the OTT market in response to connected CE and mobile devices pushing consumer behaviour towards newer forms of media distribution like OTT and multiscreen services.

Furthermore, the analyst suggests that connected devices and mobile/portable devices in particular present additional consumer touch points and will enable “more creative ways to connect or interact with consumers.”
Moreover, ABI observes that finding new ways to better engage consumers through OTT experiences will prove increasingly important as consumers adopt new viewing behaviours. Commented ABI practice director Sam Rosen: “Pay-TV services will continue to thrive by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers.”
Added senior analyst Michael Inouye: “While many consumers today claim to use mobile and portable devices while watching TV, most of us are in actuality poor at multi-tasking. In many cases this means consumers are more acutely aware about the content on their portable device than the TV. While second screen advertising is not necessarily OTT content, it does speak to the importance of targeting these connected devices that extend the reach of content beyond the TV.”