In 2017, the global Over-the-Top (OTT) market size was estimated at USD 97.43 billion and is expected to reach USD 332.52 billion by 2025, rising at a CAGR of 16.7 percent from 2018 to 2025.

OTT stands for “over-the-top” and refers to the practice of distributing content directly across the web to clients. Over-the-Top (OTT) is a means of providing television and film content over the Internet on request and to meet the individual consumer’s requirements.

Growing over-the-top demand in developed regions, growing SVoD services in emerging markets, expanding content choice, and rising demand for live-streaming channels significantly complement market growth. Nevertheless, the lack of infrastructure for the data network and the latency issues are expected to hamper market growth.

TRENDS INFLUENCING OVER THE TOP MARKET SIZE Over-the-Top ott

• One of the significant factors driving growth in the Over-the-Top (OTT) market is the growing penetration of mobile computing devices. Factors such as rising per capita income, low-cost smartphone availability, growing internet penetration, and growing investment in communication network infrastructure affect the penetration of mobile computing devices worldwide.
• The smartphone segment dominated the overall over-the-top market in 2017 and is expected to remain dominant during the forecast period, owing to increased smartphone usage to stream over-the-top services
• The media & entertainment industry dominated the over-the-top market in 2017 and is predicted to remain dominant over the forecast period as digital content viewers rise in numbers.
• AI technology is being applied across various facets of Over-the-Top (OTT) services, from development and production to post-production, marketing, and advertisement. AI, which is integrated with the Over-the-Top (OTT) framework, can automatically suggest appropriate content based on multiple user data reviews. AI can also help marketers define areas of interest under each theme, thus helping them generate more substantial variations of advertisements for the same material in the media. While AI implementation is still in its early stages, its ability to improve customer experience is expected to, in turn, improve the Over-the-Top (OTT) market.

REGION-WISE OVER THE TOP MARKET SHARE ANALYSIS

• Asia-Pacific region is expected to rise at the fastest CAGR as telecommunications providers sell their data plans to Over-the-Top (OTT) companies, which drives market growth.
• North America dominated the overall share of the Over-the-Top (OTT) market, as the area is equipped with high broadband connectivity as well as a number of services that have already moved on to providing many videos in HD and 4K.

TOP IMPACTING FACTORS

The surge in OTT demand in developing regions, the rise of SVoD services in emerging markets, the expansion in the variety of content, and the increase in the demand for live-streaming channels majorly supplement the growth of the market. However, a lack of data network infrastructure and latency issues are expected to hamper market growth. Furthermore, the emergence of new OTT markets and new developments in OTT technology are expected to provide lucrative opportunities for the market.

1. SURGE IN OTT DEMAND IN DEVELOPING REGIONS

OTT demand in developing regions has been held back by low fixed broadband penetration driven by poor coverage and investment, as well as presence of large population segments on low income. However, ongoing improvements in broadband penetration and increase in per capita income of the population drive the growth of the OTT market. There is a noticeable improvement in the speed and performance of broadband networks. For instance, the percentage of households in Brazil achieving greater than 4Mbps speed, has increased from 44% in Q1 2016 to 63% in Q1 2017. The most significant improvements have been made in the 4Mbps bracket; however, there is also an increase in the number of households achieving greater than 10Mbps and 15Mbps speeds. Adoption and coverage of these speeds are still low, but there is an increase in the average speeds for Latin America, Middle East & Africa, and developing countries of Asia-Pacific.

2. RISE OF SVOD SERVICES IN EMERGING MARKETS

The growth in investment in broadband infrastructure, with the improvement in network speed and performance, has opened up several opportunities for video over IP. An increase in penetration of SVoD services in emerging markets is expected to fuel OTT market growth in the upcoming years. For instance, OTT video is projected to grow to 6.4% of emerging market households, which is close to 103 million in total, by the end of 2019. However, in 2014, SVoD services were available to just 1.3% of emerging market households, with a user base of 19.4 million. OTT video is mostly advertising-funded across emerging economies, but paid models are gaining traction within hybrid business models, whereby services offer free content to expand the user base but at the same time position premium subscription video-on-demand (SVoD) and transactional video-on-demand (TVoD) content to generate additional revenue.

3. EMERGENCE OF NEW OTT MARKETS

By 2025, digital growth is expected to add over a billion middle-tier consumers in the upcoming markets for telcos. This opens up new markets for many OTT players. The OTT services comprise messaging, voice, content consumption, and video calling services. Many of these areas were previously dominated by the “voice” services provided by conventional telco players. Apps, such as Google Hangouts, Facetime by Apple, and WhatsApp are already offering user-friendly, innovative, and attractive voice and video messaging services. These products have established their presence with their high-quality offerings and their widespread acceptance across the consumers poses a threat to the traditional markets of telcos unless they find ways to profit from the OTT opportunities due to which numerous telecom providers enter the market. This is expected to create lucrative opportunities for the OTT market.

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