Broadcasters to triple income from OTT services by 2017

Television broadcasters will triple their revenues from participating in over-the-top (OTT) video services over the next five years to reach US$ 5.9bn in 2017, according to a new report from US firm IMS Research.

The same report predicts that just over a quarter (27%) of OTT video transactions will be initiated via fixed connected consumer electronics (CE) devices by 2017, accounting for 46% of world OTT market revenues generated that year.

Geographic expansion of large OTT portals such as Amazon, Apple and Netflix is predicted to be one of the main drivers behind the growing adoption of OTT video via connected CE, including both fixed in-home devices and portable CE such as tablets and smartphones.

Connected TV platforms such as UK’s YouView and HbbTV in mainland Europe are also believed to be enabling broadcasters and pay-TV operators to extend the reach of their existing video assets.

IMS Research now forecasts that by 2017, broadcasters will account for a 17% share of world OTT video market revenues, and pay-TV operators for an 11% share.

Anna Hunt, principal analyst at IMS Research

Anna Hunt, principal analyst at IMS Research

Anna Hunt, principal analyst with IMS Research and author of the study, comments: “Broadcasters need to be innovative on how to effectively monetise their content beyond the traditional means because content such as movies and fictional TV series are expected to transition to on-demand delivery more rapidly.

“With OTT technologies, broadcasters are given an opportunity to complement their broadcast offerings, to improve sports and live events, and to monetise content that has passed the 7-day catch-up TV window.”

Over the next five years, more broadcasters are expected to attempt to monetise their back catalogue content via pay-per-view or subscription models, as well as look to international expansion as a means of generating OTT revenues, as in the case of the BBC’s global iPlayer app.

“Many of the major broadcasters in Europe are offering OTT apps for connected CE devices and supporting these services advertising revenues,” added Ms. Hunt. “Yet, these alternative efforts are never meant to replace the broadcast channel.

“A concern exists, particularly in emerging markets such as Russia, that these alternatives may affect typical channel performance and distract viewers away from the broadcasters’ core offerings.”

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