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During the COVID-19 epidemic, one of the most surprising tales has been how the virus has actually aided the establishment of some enterprises. One of them is the over-the-top (OTT) market. The current 2027 forecast is expected to be greater than the pre-COVID-19 forecast. Because of the ongoing rise in demand for OTT services, the COVID-19 epidemic has had a beneficial influence on the worldwide OTT market's development.
This demand is mostly due to the continued rise in online communications services as a result of the enforced lockdown, as more viewers communicate via different online platforms. Furthermore, consumption of online entertainment platforms is rapidly expanding in emerging countries such as India and China, favorably boosting market development. According to a survey by Allied Market Research, the worldwide pre-COVID OTT market was $121.61 billion in 2019, and it is expected to rise from $171.36 billion in 2020 to $1,039.03 billion by 2027, at a CAGR of 29.4 percent.
With a total capital of USD 30.3 billion in 1.1 thousand+ firms, OTT Video is one of the most active industries for investors (Venture Capitalists/ Angel Investors). It's also worth noting that more than half of the money was raised in the previous three years (2018-2020).
Movies and TV programs offered directly to digital viewers without the need for a cable or satellite television subscription are referred to as over-the-top service. OTT material may be downloaded and watched directly by the user. Movies and television programs are examples of this kind of content, which is delivered via the internet to connected devices such as PCs, tablets, smartphones, and gaming consoles. Over-the-top services are still in their infancy, but they are quickly becoming a popular technology throughout the world. The over-the-top market is expected to undergo creative and complex transformations, allowing users to obtain whatever they need from a single location. In the middle of the COVID-19 epidemic, ad-supported VoD platforms are seeing tremendous increase in ad revenues, making the advertisement-based business model appealing.
For example, in the second quarter of 2020, ad revenue on five major ad-supported streaming platforms, including Hulu, Peacock, Roku, Pluto TV, and Tubi, increased by 31% year over year. Some of the top business ideas gaining substantial financing are video on demand, subscription, multi-channel networks, video distribution, and video management.
Market for Over-the-Top (OTT) Media Streaming in 2021-2026
The OTT market is expected to rise by $23 billion in 2021, and then to $210 billion by 2026.
Revenues from subscription video-on-demand (SVOD) are expected to increase by $126 billion between now and 2026, making it one of the fastest-growing industries. However, advertising video-on-demand (AVOD) will follow close behind, with revenues expected to rise to $66 billion by 2026, accounting for 32% of total OTT sales.
Though English-speaking countries (the United States, the United Kingdom, and Canada) will continue to be the most lucrative, research reveals that other areas are heating up as well:
• By 2026, China's OTT industry is expected to be worth $24 billion.
• Over the next five years, Japan's OTT market is predicted to treble to $9.2 billion.
• Over-the-top (OTT) sales in India might quadruple to $6.7 billion in the same time span.
• By 2026, the number of Western European SVOD subscribers is predicted to reach 234 million, up from 137 million in 2020.
What will fuel such fast sales growth?
There are many reasons for this. Consumers, for one, have become used to the convenience and variety offered by streaming video providers. However, according to Deloitte, the majority (46 percent) are price sensitive and cite "cost" as a deciding factor in whether or not to subscribe to a new subscription video streaming service. As a result, several publishers are looking at other revenue tactics including AVOD, direct sponsorships for live broadcasting, and e-commerce/retail integrations into video content, among others.
Early-stage Antler India, a subsidiary of Singapore-based venture capital company Antler, has pledged to invest in 25-30 blockchain and Web 3.0 firms over the next 2-3 years.
As a result, it's not surprising that advertising income on OTT media streaming services are on the rise. According to BIA, OTT ad expenditure will surpass $1 billion this year and reach $2.3 billion by 2025. Another marketing trend that is gaining traction this year is shoppable livestreams. As a new branch of e-commerce, such streams, whether provided directly by stores or in collaboration with streaming providers, have already proved to draw big viewers and generate significant money. In China, livestream shopping generated more than $136 billion in sales for participating merchants last year. More and more Western shops are joining the bandwagon, enticed by the success rates.
Increasing OTT Streaming Video Consumption
Consumers may now get handpicked content on their own terms for a flexible charge thanks to OTT streaming. And as new companies — from independent publishers to Hollywood studios — join the OTT market, this trend is unlikely to slow down any time soon.
With the mass-adoption of 5G connection on the horizon, the commoditization of video streaming app creation, and technical advancements in video distribution and delivery, it's reasonable to predict that the OTT media streaming industry will soar even higher!
According to Tracxn, a startup analytics business, there are at least 40 new enterprises in the field, with venture capital firms investing roughly $30 million in some of them.
Insights on the OTT Content Market by Category
Will OTT Content Demand Grow Due to High Smartphone Penetration?
By 2022, smartphones and tablets are predicted to account for roughly 40% of the OTT content industry.
According to the GSMA Mobile Economy Report, smartphone use hit 65 percent worldwide in 2019. Demand for mobile services is expected to rise as a consequence of this.
Market growth is being driven by rising mobile subscriptions and the usage of mobile-connected devices, notably smartphones. Smartphones and tablets are increasingly gaining popularity as the primary way of communication and information intake.
Furthermore, with the fast adoption of 4G services in emerging nations and the advancement of modern telecommunications technology in the developed world, mobile internet usage is expected to increase in the next few years.
Increased smartphone penetration in several regional consumer markets has resulted in a rise in demand for OTT content due to the optimal price of 4G-enabled phones.
Veqta is a live sports content OTT platform. Last August, it released a free test app, and in March, it will fully debut as a subscription-only platform. It has secured $500,000 from Chatsworth Management, a venture capital firm, and ITW Consulting, a sports management organization.
Which revenue model is driving the most OTT content streaming demand?
OTT content and services are now a viable and appealing alternative to conventional entertainment channels. The growing popularity of over-the-top (OTT) video channels may be ascribed to bigger content libraries and lower costs than traditional TV subscriptions.
The low price structure of subscription video on demand (SVOD) services like Netflix, Amazon, and Hulu has made them immensely popular among customers. Some OTT applications, in addition to offering messaging services, also give customers with the functionality that a broadcast channel provides.
Subscribers broadcast intriguing videos, music, and global news to a large number of other users, with strong adoption. This varied collection of applications will help SVOD services gain traction.
Impact of COVID-19 on the OTT Content Market
Because of the continued surge in demand for OTT services, the COVID-19 epidemic has a positive influence for over-the-top streaming industry growth.
The temporary shutdown of multiplexes, box offices, and entertainment zones dramatically increased demand for OTT streaming providers. To prevent the virus from spreading, several nations-imposed lockdown laws, ordering individuals to remain at home.
As people were compelled to remain at home, OTT services became a major source of entertainment. The fact that these streaming services can be accessed on smartphones, tablets, computers, and smart TVs is appealing to consumers.
Because an increasing number of viewers interact via different online platforms, this need was mostly attributable to the continuous increase in online communications services as a consequence of the mandated lockdowns.
Furthermore, since the demand for new OTT content has skyrocketed, an increasing number of OTT service providers are making part of their current material free and introducing new content on their platforms.
Mumbai-based Dekkho offers 22 content providers short videos ranging from 2 to 45 minutes. Vinay Pillai, the company's founder, has earned $2 million from angel investors after working in New York for Drama Fever, a video streaming platform for Korean dramas.
Competitive Landscape of the OTT Content Market
To expand their market reach, major over-the-top content providers are strategically collaborating with telecom providers, content producers, streaming partners, and others.
These corporations are working and partnering with local service providers to expand their operations. Market companies are focusing on product innovation as well as investing in the construction of new streaming services and platforms in order to attract customer attention.
Example-
• Amazon, Inc. introduced miniTV, a free internet streaming app, in May 2021.
With this strategy, the sector hopes to increase consumer interaction across a variety of services, including e-Commerce, billing, delivery, and more.