OTT Pay TV Services Expected to Soar to $10 Billion by 2018

CAMPBELL, CA — Subscription-based over-the-top (OTT) providers like Netflix, Hulu Plus, and Amazon are in the early stages of siphoning off revenue from traditional pay-TV providers, according to new findings from market research firm Infonetics in its latest "Pay TV Services and Subscribers" report, which forecasts and analyzes the cable TV, satellite TV, telco Internet protocol television (IPTV), and over-the-top (OTT) services markets.

"With a combination of wide availability across end devices, user-friendly interfaces, and access to vast content libraries, these providers continue to challenge traditional pay-TV providers and are in the early stages of siphoning off revenue," notes Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research.

OTT Providers Expanding Relationships with Traditional pay-TV Providers
"OTT providers have seen phenomenal growth over the last couple of years," Heynen continues. "With a combination of wide availability across end devices, user-friendly interfaces, and access to vast content libraries, these providers continue to challenge traditional pay-TV providers. But beyond this approach, OTT providers are now expanding their relationships with traditional pay-TV providers to get their apps and services integrated directly onto consumer set-top boxes (STBs), gaining access to a much larger pool of current pay-TV subscribers."

Pay-TV Market Highlights

  • Over-the-top (OTT) pay-TV revenue is forecast by Infonetics to grow from $5.8 billion in 2014 to just over $10 billion in 2018

  • The global pay-TV market totaled $117 billion in the first half of 2014 (1H14), an increase of 3.9 percent from the first half of 2013 (1H13)

  • Satellite and telco pay-TV service revenue continues to grow, driven by new subscribers and increased average revenue per user (ARPU) in North America and Western Europe

  • However, much of the increased revenue per user is being offset by ever-increasing content costs

  • Pay-TV subscribers reached 837 million in 1H14, growing 10 percent over 2013, with the strongest growth again coming from the telco pay-TV segment


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