OTT status 2016
We still have almost two weeks till the end of this year. A lot has happened in digital TV and OTT global sectors in 2016. But this is not yet the final summary of the recent months. It’s rather first attempt and look what can happen in OTT market in 2017. All predictions assume systematic increase, new services, next players and more financial value.
Just a brief reminder. The term over-the-top OTT refers to applications and services which are accessible over the internet. All these products ride on operators’ networks offering Internet access services. OTT is the delivery of audio, video, and other media over the Internet without the involvement of a multiple-system operator in the control or distribution of the content. The emergence of OTT content providers can be heralded as revolutionary in changing the way consumers use mobile broadband (MBB).
OTT is an Internet-based platform — connected TV, desktop, and mobile. That provides access to rich data for one-to-one targeting. However, OTT’s targeting capabilities on the supply side have been slower to develop. Making inventory available through programmatic technology would amplify targeting opportunities, but only a small portion of OTT is currently sold programmatically.
Increase key factors
Digital TV and OTT market still generate increasing value. Particularly across existing and emerging triple and quad-play providers, the addition of operator-led OTT services is set to both expand the market, and divert some of the global OTT spend (predicated to be worth $62 billion by 2020) back towards the underlying networks.
The key factors driving the growth of OTT market are increase in the number of smartphone users, increasing household broadband penetration, increase in internet users, increase in global ad spending through internet, accelerating economic growth and cloud services. Some of the noteworthy trends and developments of this industry are rapid computerization of banking system, availability of high speed internet, rise of mobile commerce and E-commerce, increasing trend of Omni-channel retailing and preference of online media over traditional TV. The expansion of OTT market is hindered by willingness to improve technology, high competition and cost incentive, regulatory imbalances between TSP and OTT, legal and regulatory issues.
OTT 2017 some predictions
The global OTT video market is poised for nearly exponential growth, says a report by Digital TV Research Limited. It forecasts that global revenues will climb to $64.8 billion by 2021. That figure includes projected revenues for 100 countries. The industry took in $29.4 billion in 2015 and $4.5 billion in 2010. Most online video revenues will come from subscription services (SVOD) through 2018. Digital TV Research predicts that advertising-supported content (AVOD) will take the lead by 2020. At that time, AVOD revenues of $15.4 billion will surpass SVOD revenues of $14.6 billion.
In 2017 OTT, programmatic and VOD will evolve considerably — for the better, be sure. Expect strides in each area to create more opportunities for advertisers and broadcasters alike. 2017 is set to be another pivotal year for over-the-top (OTT) service growth, fuelled by streaming video and public demand for more non-linear media consumption. In 2017 OTT, programmatic and VOD will evolve considerably — for the better, be sure. Expect strides in each area to create more opportunities for advertisers and broadcasters alike. 2017 is set to be another pivotal year for over-the-top (OTT) service growth, fuelled by streaming video and public demand for more non-linear media consumption. In 2016, almost 60 million households had access to cable VOD – up 2 million in the past year. On top of that, time spent watching VOD programming also grew to more than 9 hours per month. This is nearly double the amount of time audiences spent on VOD just 5 years ago. Still, VOD ad potential remains limited, despite adoption.
All changes are extremely important for marketing and advertising industry. Video and TV are booming. The total ad spend on linear TV is expected to reach almost $74 billion this year, showing just how strong the industry remains. But the TV category is also changing rapidly. From OTT to programmatic, advertisers and broadcasters are seeing shifts in traditional TV like never before. 2017 will bring changes for OTT video advertising. More OTT content suppliers will be forced to embrace programmatic as advertisers demand greater data-driven targeting. As programmatic OTT takes hold and standardizes, OTT ad spending will balloon. But there are more the main stakeholders for Digital TV and OTT market. For example:
- Equipment Manufacturers
- OSS/BSS providers
- Platform Developers
- System Design and Development Vendors
- High Level Business Decision Makers
- Cloud Service Providers
- Training and Education Service Providers
- Large Business Enterprises and Network Providers
- Telecom Operators
There are many providers of OTT content globally, of all different sizes. Consumers can access OTT content through Internet-connected devices such as desktop and laptop computers, gaming consoles (such as the PlayStation 4 and Xbox One), set-top boxes, smartphones (including Android phones, iPhones, and Windows phones), smart TVs and tablets. The competition in the OTT segment is also increasing due to companies looking for expanding their user bases in other countries. You also can not forget about the changes and values on the technology market. According to the Cisco research, the main factors are:
- By 2019 almost 80% of global Internet consumption will be video content
- It would take an individual over 5 million years to watch the amount of video that will cross global IP networks every single month in 2019.
- OTT streaming will fuel the growth, as 4K video becomes the new standard for consumers.
- Global IP Traffic to Reach 2 Zettabytes (100 trillion gigabytes) by 2019
- Traffic from wireless and mobile devices will rise to 66% in 2019
- Every second, nearly a million minutes of video content will cross I.P. networks by 2019
- Internet video to TV grew 47% in 2014, will increase fourfold by 2019
- Consumer VoD traffic will nearly double from 2016, 2017 till 2019, to the equivalent to 7 billion DVDs per month
What realy affects the market change trends? This is because VOD advertising technology and creative capabilities are fairly inert. They prevent truly dynamic, time-sensitive ad insertion. For example, embedded ad inventory on VOD typically lasts a full month. After a month, most networks then update their programs and the embedded inventory, preventing dynamic creative and timely campaigns from being placed across cable VOD. Digital channels and linear TV—which are more flexible—benefit, instead. More problematic is set-top box fragmentation. Dynamic ad insertion must occur at the set-top box-level, but without any real standardization across them, advertisers are limited in what they can do.
Source: Marketreportsonline, Onlinevideo, Information-age