They will reach $28.72 billion in 2017, a sizable increase from the $3.79 billion recorded in 2010 and the $11.14 billion expected in 2012, according to a new report from Digital TV Research. The over-the-top (OTT) TV sector is on the brink of a huge take-off as the key players expand globally, companies consolidate and as new partnerships are announced on a daily basis.
By 2017, 480 million homes in 40 countries will watch online television and video, up from 182 million in 2010. By 2017, 64.6% of the world’s 745 million fixed broadband homes will view television and video online, up from 33.5% of the 473 million fixed broadband total in 2010.
Next generation TV is taking the world by large and the parallel success of tablet technology may spur new consumption of linear television on the larger screen. OTT’s content and widgets are driving vulnerable pay-TV operators to reduce their prices in order to defend market share, said the report. A major driver of OTT is online TV and video advertising, which brought in revenues of $6 billion in 2012. However, advertising’s share of total OTT revenues will decline from 65% in 2010 to 51% in 2017.
RBR-TVBR observation: Consumers can watch so much television and movies online today that cord-cutting is almost irresistible to some. Much of the OTT content already includes the same advertisers as traditional TV: Auto, CPG, Cellular/Wireless, Restaurant, etc…The convergence coming down the road will be cable and internet service, delivered via one wire.