OTT, VOD myths and realities

March 14, 2014 11.16 Europe/London By Chris Dziadul, Cable Congress 2014

Netflix_Sony-TV_31254_300_213_1OTT is unlikely to pose a revenue threat to pay-TV anytime soon, even in such advanced markets as the US.

There, according to Guy Bisson, Guy Bisson, research director, television, IHS, the OTT sector was worth $5 billion in 2012 and is forecast to grow to $9 billion in 2017.

Pay-TV and online video, on the other hand, is forecast to grow from $94 billion to $104 billion over the same period.

Bisson also said that the idea that VOD is taking over from linear viewing is just not true, with the reality being that broadcast is still the main medium of consumption.

In the US, for instance, traditional viewing time accounted for 82% of the total in 2012, with DVR, online and pay-TV VOD claiming 9%, 5.5% and 3.2% respectively.

The corresponding figures for the UK were 84%, 11%, 3% and 2%. By 2017, traditional viewing in the US and UK will fall to 76.5% and 76% respectively.

Although such areas as online (4.2% US and 7% UK) and pay-TV/VOD (7.9% and 5%) will still be quite low, it will be significant in both markets that a quarter of viewing will not be via traditional means.

Another key point is that although going direct to the consumer is already an option, it comes at a price. In the UK, dismantling the entire market would need 5.6 million subscribers.

Moreover, between 2.7 million and 8.6 million direct OTT subscribers would be needed to maintain content owner income, and some would need more.