Tuesday, 20 March 2018

Over the Top (OTT) Services Market – Premium and Subscription Most Preferred Business Model

A recent intelligence study by Transparency Market Research (TMR) has detected that the shares in theglobal over the top (OTT) services market are distributed among a large number of vendors who cater to international and regional demand. That being said, a few players do hold a position of strength, such as Netflix, Inc., Apple, Inc., Google, Inc., Facebook, Inc., LinkedIn Corporation, and Twitter, Inc.. These players are staying ahead of the curve via their high quality featured products and price advantages. A number of these companies are concentrating on growing inorganically but acquiring domestic players, which also helps them to improve their product portfolio.
As per the projections of the TMR report, the demand in the global over the top services will increment at an impressive CAGR of 16.4% during the forecast period of 2017 to 2025. At this rate, the valuation of the market is estimated to reach US$3,538.04 mn, considerably up from its evaluated worth of US$925.87 mn in 2016.
Based on business model, the market for over the top services has been segmented into premium and subscriptions, e-commerce, and adware. In 2016, the premium and subscription business models fetched nearly 48% of the total demand and is anticipated to remain dominant throughout the forecast period. This segment generates revenue from fixed fee paid by customers in order to download or access a specific application. The memberships or freemium turned premium service applications are also part of premium and subscriptions’ business model. In the near future, proceeds generated by the premium and subscription segment is expected to increase as a result of increasing popularity of OTT media content and cloud service applications.
Application-wise, the report bifurcates the global OTT services market into communication, e-services including media content, audio and video, and gaming, web content, and cloud services. End-use classification of the market has been done into personal and commercial including media and entertainment, healthcare, IT, education, ecommerce, and others including energy, transportation, and manufacturing.
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Asia Pacific Projected for Best Growth Rate
Geographically, the report picks out North America as most lucrative region in the global over the top services market, and anticipates it to remain highly profitable throughout the forecast period as developed countries such as the U.S. and Canada have highest penetration of high-speed mobile internet, ranging around 13.1 mbps to 14 mbps. That being said, Europe and Asia Pacific are also expected to provide for a significant chunk of demand as the internet infrastructure in various emerging economies continue to strengthen. The Asia Pacific OTT services market is projected to expand at most prominent CAGR of 16.1% during the forecast period of 2016 to 2023.
Rapid adoption of device-based computing, economical charges for the usage of OTT platforms and services, increase in wide availability of broadband infrastructure, growing production of in-house web series, high demand for time-shifted television, growing usage of OTT on mobile devices, increase in requirement for compliance and infrastructure, and personalization of technology are some of the key factors augmenting the demand in the global over the top services market. On the other hand, high popularity of free online video streaming and lack of procedure to identify and curb piracy, reluctance of customers to spend for OTT services, and low scope of customer retention are a few obstructing challenging the prosperity of the global OTT services market. Nevertheless, the vendors of this market are expected to gain new opportunities from the emergence of video streaming devices, increased adoption of RTB, and increased usage of multiple DRMs in web browsers.

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