UK leads European over-the-top markets

Editor | 20-11-2012

With penetration in 2017 expected to pass 75% and 52% respectively, the UK is leading the rest of Europe in the adoption of both standalone over-the-top (OTT) and operator-owned multi-screen TV Everywhere services.

Moreover, according to ABI Research's OTT and Multiscreen Services Research report, the country has cemented its credentials as the home of multi-device in Europe, with more than 10% of the population in the UK already owning an average of four connected devices.

Looking at the multi-screen market, ABI noted the continued investment of satellite provider BSkyB and cable operator Virgin Media to extend their content to multiple devices, most notably smartphones and tablets using BSkyB's successful Sky Go and the soon to be launched TiVo empowered Virgin Anywhere.

The analyst also suggests that the traditional pay-TV operators are also now doing a better job of capturing customers with their multi-screen solutions; it regards Sky Go as already capturing "respectable" penetration with nearly 26% of their total customer base using multi-screen services. It adds that the lines are starting to blur with the likes of YouView Sky's OTT offering NOW TV.

Looking at the over-the-top sector, ABI notes the rapidly increasing pure OTT services with growing numbers of both local and international players entering the market. Current market leader, Amazon's LOVEFiLM, has 2.5 million subscribers but is now under a huge challenge from Netflix which signed up a million subscribers within eight months of its market entry.

Overall, ABI calculates that led by the BBC iPlayer, over half of broadband users are using pure OTT services while pay-TV operator-owned multi-screen services have only about 17.5% of pay-TV households. Yet as a result of this increasing competition and choice in pure OTT video services, ABI expects revenues to pass $500 million by the end of 2012.

"While multi-screen services will not catch up with pure OTT services by 2017, the growth of multi-screen platforms will be faster than OTT services," said Sam Rosen, practice director, ABI Research. "In pure OTT video services, content is the king, but in the short term, operators that fail to differentiate purely on content may be able to focus on user experience to woo consumers. Netflix's content offerings in Europe lack depth; however, device penetration and good user interface makes an enticing offering for consumers," added Adarsh Krishnan, senior analyst at ABI Research.