According to the latest market research study released by Technavio, the global OTT devices and services market is expected to grow at a CAGR of more than 20% during the forecast period 2016-2020.
This market research report by Technavio provides an in-depth analysis of the market in terms of revenue and emerging market trends. The report also includes an up-to-date analysis and forecasts for various market segments and all geographical regions.
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Technavio research analysts categorize the global OTT devices and services market based on revenue model:
Global OTT devices and services market share by revenue model 2015
|
AVOD |
53.49% |
|
SVOD |
27.91% |
|
TVOD |
18.60% |
Source: Technavio
The top three revenue contributing model segments are discussed below:
Global OTT devices and services market by AVOD model
The AVOD revenue model accounted for around 53% of the global OTT devices and services market in 2015. AVOD is extremely prevalent in the emerging nations where OTT services are still in the growing stages. In this model, the revenue is generated through ads and the services are free and ad-supported. The prominent user of the AVOD subscription model is Crackle, which is an OTT service of Sony. The AVOD model is just like the TV advertising model, where viewers pay by watching the advertisements.
“The ads displayed on the web are more effective than TV ads due to the presence of a wide set of user data on the internet. The vendors have an ad recorded on their web page for advertisers which are sold through RTB channels. To provide visitors with an appropriate content, ads sold via RTB are considered to be the most cost-effective,” says Ujjwal Doshi, a senior analyst at Technavio for research on consumer electronics.
Global OTT devices and services market by SVOD model
In 2015, SVOD model accounted for around 28% of the global OTT devices and services market. In the SVOD model, the OTT service providers charge their consumers with a subscription fee for their offerings. SVOD is usually a service agreement between the consumer and the service provider. The top vendors using the SVOD revenue model are Netflix and Hulu. In the SVOD model, consumers rent out the vendor’s service for a specific period during which the consumers can watch all content such as movies, TV series, and sports. Most of the subscriptions in this model are for smaller period compared to television services, where consumers subscribe for 6 months or a year. However, monthly subscriptions are also available for cable services, but they are comparatively expensive making the consumers choose the economically feasible long-term subscriptions. The best part of the SVOD model is that the consumers can subscribe and cancel whenever they want. The biggest challenge of this segment is retaining the consumers due to the low switching cost. This is making the vendors provide interactive offers so that they can hold onto their viewers.
Global OTT devices and services market by TVOD model
TVOD model accounted for around 19% of the global OTT devices and services market in 2015. In the TVOD model, the consumers have freedom to pick when and what kind of OTT services to subscribe. The top services such as Vimeo and Amazon Instant Video use TVOD model. A key benefit about TVOD model is that the viewers only pay for the content they wish to watch. TVOD model can effectively retain its customers by offering attractive prices on the selected content. This model is gaining popularity in the emerging economies where consumers pay a nominal fee for watching the chosen content. TVOD model is the most preferable one for new releases as the content is released on OTT services before the DVD release, leading to high internet traffic. The only factor hindering the growth of this market is the presence of multiple users per subscriber, especially in the developed countries, which has propelled people to shift towards the SVOD model.
The top leading vendors operating in the global OTT devices and services market are:
- Amazon
- Apple
- Hulu
- Netflix
Other prominent vendors in the market include Akamai Technologies, Activevideo, CinemaNow, Google, Indieflix, Nimbuzz, Popcornflix, and Roku.
A more detailed analysis is available in the Technavio report titled, ‘Global OTT Devices and Services Market 2016-2020’. Technavio also customizes reports by other regions and specific segments upon request.
Other related reports:
- Global Channel-in-a-Box Market 2016-2020
- IPTV Market in South Korea 2016-2020
- Global Digital Video Content Market 2015-2019
- DTT Market in the US – Industry Analysis 2015-2019
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