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European OTT video market to reach $9.45 bn by 2018

MUMBAI: European total OTT video revenue was up 51 per cent to touch $3.2 billion in 2013 and is expected to grow a further 43 per cent this year, according to the latest research by Strategy Analytics’ Digital Media Strategies team.

According to the 2014 European OTT Video Market Forecast, the majority of this growth will occur within the online subscription VOD (SVOD) and ad-supported video business models, lifting the market above $9.45 billion by year-end 2018.

Key findings:

* Led by Netflix, SVOD revenues experienced strong growth during 2013, up 133 per cent and is expected to nearly double by year-end 2014.

* Ad-supported video makes up over 60 per cent of total OTT video revenue in Central and Eastern Europe, but will represent less than 50 per cent of Western Europe OTT video revenue by year-end 2014.

* Average OTT video spend per broadband user in Western Europe is about four times that of those in Central & Eastern Europe.

* From a user perspective, the European online video market is reaching maturity. But from a consumption, and even more importantly, monetisation perspective, OTT video is just beginning to hit its stride.

OTT

The growth of OTT video suggests that the audience is shifting towards accessibility and availability over actual ownership of home videos.

Over time, consumers will shift from content ownership to lower cost means of consuming media. As long as OTT service providers continue to offer attractive video catalogues at a reasonable price, accessibility and availability will trump ownership. The success or failure of OTT video services is heavily dependent on the quality of their content library. The expansion of global players like Netflix across Europe has been slowed due to complex content negotiation impacting the quantity and quality of available content in the region.