Over-the-top (OTT) video revenue will quadruple to reach $32 billion by 2017, up from a forecast $8.2 billion in 2012, according to ABI Research. OTT subscription services, eg. Netflix, have been paving the way, but the Scottsdale, Arizona-based market research firm expects the number of OTT rentals to exceed OTT subscription revenues by 2014.
“Connected CE and mobile devices continue to push consumer behavior towards newer forms of media distribution like OTT and multiscreen services,” noted ABI practice director Sam Rosen. “Pay TV services will continue to thrive, by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers.”
As OTT revenues grow so will OTT ad dollars, which ABI analysts expect to “pick up momentum as ad dollars increasingly shift to the OTT market. The proliferation of connected consumer electronics (CE) devices, mobile devices in particular, afford merchants ever greater points of contact, “touchpoints,” with consumers. “Finding new ways to better engage consumers through OTT experiences, therefore, will prove increasingly important as consumers adopt new viewing behaviors,” the researchers comment.
“While many consumers today claim to use mobile and portable devices while watching TV, most of us are in actuality poor at multitasking,” elaborated ABI senior analyst Michael Inouye. “In many cases this means consumers are more acutely aware about the content on their portable device than the TV. While second screen advertising is not necessarily OTT content it does speak to the importance of targeting these connected devices that extend the reach of content beyond the TV.”
These findings, as well as others, are included in ABI’s OTT and Multi-screen Services Research Services.