Over-the-top (OTT) platforms have changed how we watch TV and movies. These services let us stream shows and films over the internet. We no longer need cable or satellite TV. This shift has led to a boom in the OTT market. Viewers love the freedom to watch what they want and when they want. This has made OTT services very popular around the world.
The rise of high-speed internet and smart devices has helped this growth. More people can now access these platforms easily. Companies like Netflix, Amazon Prime Video, and Disney+ are leading the way. They offer a wide range of content for a monthly fee. This has made traditional TV less popular.
In this blog post, we will dive into the world of OTT. We’ll look at the latest OTT statistics and market insights. Let’s buckle it up and explore the exciting world of OTT streaming services.
Key OTT Market Statistics and Insights
- The global OTT user base is expected to increase to 3.71 billion by 2024 from its current count of 3.50 billion.
- The global market size of OTT services was valued at $238 billion in 2021 and is projected to reach $476 billion by 2027.
- The OTT industry revenue is expected to surpass $210 billion by 2026.
- The SVOD market is anticipated to grow by 52% by 2025, while the total OTT revenue is predicted to jump 53% at the same time, totaling $272 billion.
- The average viewer spends $50 monthly on streaming services across four platforms, with Netflix being the most popular.
- The OTT services’ global market size was $38.77 billion in 2020, with a significant growth of 13.9% in 2020 compared to the average year-on-year growth from 2017-2019.
- The market is projected to grow from $44.54 billion in 2021 to $139.00 billion in 2028 at a CAGR of 17.7% in 2021-2028.
- The market is expected to stabilize and reach $169.4 billion in 2023 at a CAGR of 14.0% from 2021.
- Online piracy accounts for 26.6 billion views of U.S.-produced movies and 126.7 billion views of U.S.-produced TV episodes yearly.
- Pirated video material gets over 230 billion views annually, with more than 80% of global online piracy attributed to illegal streaming services.
- Over 50% of sports fans watched pirate streams in 2023 despite owning a pay-TV or OTT platform subscription.
- The illegal downloading and streaming of movies and TV shows is projected to cost the TV and film industry US$51.6 billion globally by 2022.
- The average number of media piracy site visits per user worldwide in 2017 was 80.5, with the highest number recorded in Indonesia.
The Rise of OTT Platforms
OTT platforms have grown fast in the last few years. This growth is due to several reasons. More people now have access to high-speed internet. This makes streaming shows and movies easy and quick. The use of smart devices like smartphones and smart TVs has gone up. These devices let people watch their favorite content anytime and anywhere.
Another big reason for the rise of OTT is the variety of content. Platforms like Netflix and Amazon Prime Video offer thousands of shows and movies. They have something for everyone. This wide choice has attracted millions of viewers worldwide.
The convenience of OTT platforms is also a significant plus. Unlike traditional TV, you can choose what to watch and when. There’s no need to follow a TV schedule. This freedom has made OTT services very popular, especially among younger viewers.
Since the OTT subscription costs are often less than a cable TV package, this makes it an attractive option for many. With all these benefits, it’s no surprise that OTT platforms are rising. They have truly changed the way we think about watching TV and movies.
Current Market Overview
The OTT market is booming. More people are signing up for streaming services every day. The global OTT user base is expected to increase to 3.71 billion by 2024 from its current count of 3.50 billion. This has led to a huge increase in market size. Reports show that the global market size of OTT services is growing fast. According to a recent report, the global market size of OTT services was valued at $238 billion in 2021 and is expected to reach $476 billion by 2027. The revenue from the OTT industry is expected to more than double in the next four years and is projected to surpass $210 billion by 2026. The SVOD market is expected to grow by 52% by 2025, while the total OTT revenue is predicted to jump 53% at the same time, totaling $272 billion.
North America and Europe have the most significant market share. However, Asia Pacific and Latin America are catching up quickly. Their market growth is due to more people getting access to high-speed internet.
Streaming platforms like Netflix, Amazon Prime Video, and Disney+ lead the market. They have millions of subscribers. Their success comes from offering a wide range of shows and movies. The average viewer spends $50 monthly on streaming services across four platforms, with Netflix being the most popular.
The average revenue per user is also going up. This means that these platforms are not just getting more users. They are also making more money from each one. This is good news for the OTT industry.
Consumer Behavior and Preferences
What viewers like and how they watch content has changed a lot. People now prefer watching shows and movies on their terms. This means choosing what to watch and when. Streaming services let them do just that. This freedom is a big reason why OTT platforms are so popular.
Viewers also like having lots of options. Platforms that offer a wide range of shows and movies do well. Exclusive content, like original series, is also a big draw. They make people want to sign up for the service.
Another trend is binge-watching. Many like to watch all episodes of a series at once. OTT platforms cater to this by releasing whole seasons together. This differs from traditional TV, where you must wait for each episode.
Quality is important, too. Viewers expect high-definition (HD) and even 4K quality. Good sound quality is also a must. Platforms that offer these get more subscribers.
Lastly, people use different devices like smartphones, tablets, and smart TVs to watch content. OTT services that work well on all these devices have an edge.
Shortly, viewers want choice, quality, and convenience. OTT platforms that offer these will attract more users.
OTT Revenue Models
OTT platforms have various ways to make money, and understanding these revenue models is crucial for anyone interested in the digital entertainment sector. Here’s a breakdown of the leading models:
Subscription Video on Demand (SVOD):
This is the most common model used by platforms like Netflix and Disney+. Users pay a monthly or yearly fee to access a library of content. There’s no limit to how much they can watch. This model is popular because it offers excellent value. For one price, you get a wide range of shows and movies. It’s like having a vast library at your fingertips. The challenge for platforms is keeping the content fresh and exciting. They need to keep adding new shows and movies to keep subscribers happy.
Advertising-based Video on Demand (AVOD):
In this model, content is free for viewers, but they must watch ads. Hulu offers a cheaper subscription that includes ads. This model works well for viewers who don’t mind watching ads to save money. For platforms, the key is balancing ads and content. Too many ads can annoy viewers and make them leave. But the right amount can generate good revenue without upsetting viewers.
Transactional Video on Demand (TVOD):
This model lets users pay for each piece of content they watch. It’s like renting or buying a movie or show. iTunes and Google Play use this model. It’s suitable for watching specific movies or shows without a subscription. The challenge here is pricing. Content needs to be priced so that it’s attractive to buy or rent but makes money for the platform.
Hybrid Models:
Some platforms mix these models to offer more options. For example, Amazon Prime Video has a subscription service. But it also lets you rent movies that are not included in the subscription. This flexibility can attract a broader range of viewers. The challenge is making the different options clear and easy to understand.
Each of these revenue models has its own set of benefits and challenges. The suitable model depends on the platform’s content, audience, and goals.
Impact of COVID-19 on OTT Services
The COVID-19 pandemic has significantly impacted the Over-The-Top (OTT) industry. The temporary shutdown of multiplexes, box-office, and entertainment zones dramatically pushed the demand for over-the-top streaming platforms. Video-on-demand online services witnessed a flux in the number of subscribers worldwide during the lockdown period. For instance, as per the India Brand Equity Foundation, paid subscriptions to video platforms grew by 31% in just four months in 2020. The drastic spike in viewership fueled the growth of the OTT services market amid the COVID-19 pandemic.
According to a recent report, the global market size of OTT services was $38.77 billion in 2020. Our analysis shows that the market exhibited a significant growth of 13.9% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from $44.54 billion in 2021 to $139.00 billion in 2028 at a CAGR of 17.7% in 2021-2028. The change in CAGR is attributable to this market’s demand and growth rate, returning to pre-pandemic levels once the pandemic is over.
The exponential growth is mainly due to the lockdown owing to the COVID-19 outbreak, during which subscriptions to various OTT streaming channels and viewership have increased. The market is expected to stabilize and reach $169.4 billion in 2023 at a CAGR of 14.0% from 2021. The revenue from the OTT industry is expected to more than double in the next four years and is projected to surpass $210 billion by 2026.
The global OTT user base is expected to increase to 3.71 billion by 2024 from its current count of 3.50 billion. The surging adoption of internet-based communication applications is likely to fuel market growth. Similarly, a significant rise in the demand for online streaming content, such as movies, live news, and sports, is expected to boost the market.
The COVID-19 pandemic has positively impacted the OTT industry, with the market size growing significantly. The demand for OTT services is expected to grow in the coming years, with the global user base expected to increase.
Challenges Facing OTT Platforms
OTT platforms have revolutionized media consumption but face several significant challenges in maintaining and growing their market presence. Let’s delve deeper into these challenges.
Intense Competition
The OTT space is crowded, with new platforms emerging regularly. Giants like Netflix, Amazon Prime Video, and Disney+ dominate, but there are many niche services, too. Each platform must differentiate itself to attract and retain subscribers. This could be through exclusive content, pricing strategies, or unique features. The competition isn’t just among OTT services. Traditional TV networks and cable providers are also fighting to keep their audience, often by launching their own streaming services.
Content Acquisition and Retention
Creating or acquiring content that captivates audiences is a constant challenge. With viewers’ tastes evolving and the demand for high-quality, diverse content increasing, platforms must continuously invest in content. Moreover, securing rights to popular shows or movies can be expensive and complex. Retaining viewers with a compelling content library is crucial, as the ease of switching between services means viewer loyalty is low.
Piracy and Content Security
Piracy and content security are significant concerns for the OTT industry. According to a U.S. Chamber of Commerce’s Global Innovation Policy Center report, online piracy accounts for 26.6 billion views of U.S.-produced movies and 126.7 billion views of U.S.-produced TV episodes yearly. Pirated video material gets over 230 billion views annually, with more than 80% of global online piracy attributed to illegal streaming services.
The rise in piracy is a growing concern for the OTT industry. In 2023, over 50% of sports fans watched pirate streams despite owning a subscription to a pay-TV or over-the-top (OTT) platform. The illegal downloading and streaming of movies and TV shows is projected to cost the TV and film industry US$51.6 billion globally by 2022.
The average number of media piracy site visits per user worldwide in 2017 was 80.5, with the highest number recorded in Indonesia.
Undoubtedly, piracy is a significant issue for the OTT industry, with billions of views lost yearly. The rise in piracy is a growing concern for the industry, with the illegal downloading and streaming of movies and TV shows projected to cost the TV and film industry billions of dollars. The industry must address this issue and ensure that content is protected from piracy.
Global Expansion Challenges
Expanding globally offers enormous opportunities but comes with its own set of challenges. Regulatory hurdles, cultural differences, and language barriers can complicate launches in new markets. Additionally, content that performs well in one region may not resonate in another, requiring a localized content strategy. Understanding and navigating these differences is key to successful global expansion.
Technological Barriers
Delivering a seamless streaming experience requires a robust technology infrastructure. Issues like buffering, low video quality, and app crashes can frustrate users and lead to cancellations. Investing in technology to ensure smooth playback and user-friendly interfaces is critical. Additionally, adapting to different devices and screen sizes adds another layer of complexity.
Future Trends and Predictions
The OTT industry is on the brink of even more exciting changes. Here’s a deeper look into the future trends and predictions:
Enhanced Personalization: In the future, OTT platforms will become even more brilliant at understanding what you like to watch. They’ll suggest content tailored just for you using advanced algorithms, making it easier to discover new shows and movies that fit your taste perfectly.
Interactive and Immersive Content: The success of interactive shows has opened a new frontier for storytelling. We can expect more content that allows viewers to make choices that affect the story’s outcome. Additionally, virtual reality (VR) and augmented reality (AR) might be integrated, offering more immersive viewing experiences.
Diverse Global Offerings: As OTT platforms reach more corners of the globe, the demand for diverse content will rise. This means more shows and movies from different cultures and languages, enriching the viewing experience with global perspectives.
Technological Advancements in Streaming Quality: The push for higher-quality video and audio will continue. With technology evolving, streaming in 4K and 8K will become more common, offering crystal-clear visuals and immersive soundscapes that enhance the viewing experience.
Bundling and Collaboration: To attract and retain subscribers, OTT platforms offer bundled services. This could include combining streaming services with other digital services like music, gaming, or even internet plans at a discounted rate, providing more value to consumers.
Optimized Mobile Viewing: Recognizing the growing trend of mobile consumption, platforms will focus on optimizing content for smaller screens. This includes developing better mobile apps, offering mobile-specific content, and introducing features that cater to on-the-go viewing.
Market Saturation and Competition: The entry of more players into the OTT market will intensify competition. While this may lead to more choices and lower prices for consumers, it could also make it challenging to decide which services to subscribe to. The platforms offering unique content, excellent user experience, and value for money will stand out.
The future of OTT is vibrant and promising, with advancements that aim to make content more personalized, interactive, and accessible globally. As technology progresses, media consumption will evolve, offering more decadent and engaging viewing experiences.
Conclusion
The journey through the OTT landscape reveals a future filled with potential. The statistics don’t lie -with a user base and revenue that continue to skyrocket, the horizon for OTT platforms is as vast as it is bright. As we navigate through the evolution of media consumption, powered by the convenience of high-speed internet and the versatility of smart devices, OTT platforms like Netflix and Disney+ are reshaping our viewing habits. However, amidst this growth, challenges such as competition and piracy loom. But, the promise of advanced personalization, global content diversity, and technological enhancements in streaming quality keeps the future exciting.
For those eager to dive into or expand their presence in the flourishing OTT market, Castr stands as your ally. Offering a comprehensive video streaming solution, Castr empowers you with robust video hosting capabilities, ensuring your content reaches your audience seamlessly. The future of OTT is not just promising; it’s thriving. And with Castr, you’re equipped to be a part of this dynamic evolution. Ready to explore the possibilities? Try Castr today and unlock the potential of your content in the booming OTT space.
