June 6, 2018
NEWS ANALYSIS — Consulting firm PricewaterhouseCoopers just issued a report contending over-the-top video revenue, spearheaded by subscription VOD stalwarts Netflix, Amazon Prime Video and Hulu, is projected to top $30 billion by 2022.
Indeed, SVOD revenue represented nearly 80% of OTT video revenue in 2017 — a percentage that is expected to inch past 81% by 2022 fueled by original programming.
So, what is the pay-TV ecosystem — which lost about 3 million subscribers in 2017 — doing in response? Jumping on the OTT video bandwagon.
Rollout of standalone online TV platforms such as Dish Network’s Sling TV, Charter’s Spectrum TV Plus and AT&T’s DirecTV Now will contribute to the global pay-TV market, including satellite, cable, and IPTV services, generating $295 billion in revenue by 2022, according to ABI Research.
“OTT is becoming a preferred video viewing platform due to its low-cost and availability on multiple devices without a long-term contract requirement,” Khin Sandi Lynn, industry analyst at ABI Research, said in a statement.
Pay-TV operators — notably Comcast Cable with its X1 set-top — are embracing broadband to provide OTT service together with traditional TV.
Swedish cable operator Com Hem recently launched Android-based TV Hub, which allows subscribers to access linear TV channels and streaming services. Broadband-based set-top boxes are a good option for pay-TV operators to compete with OTT service providers while maintaining customer loyalty, according to ABI.
“Pay-TV and OTT offerings can vary dramatically between regions and between countries in terms of content availability and price,” said Lynn. “OTT adoption in mature markets will impact pay-TV adoption there, but the more reliable delivery and all-in-one nature of pay-TV will prove valuable in those developing markets.”