OTT To Overtake Broadcast in Five Years: Survey Report

When it comes to over-the-top (OTT) viewership, the streaming media industry as a whole has a surprising prediction for the traditional broadcast and cable industries: OTT viewership will exceed traditional viewing before 2020.

This is just one of the findings reported in the annual OTT Video Services report jointly released today by Level 3 Communications and Unisphere Research. The report, titled "OTT Video Services—Innovation, Opportunity, Maturation & Technology Trends in OTT Delivery," highlights responses from almost 500 industry leaders.

When the viewership question was asked "When will live-linear OTT viewing exceed typical broadcast TV viewing?," responses were consistent across the board. More than 50% of respondents indicated the tipping point will be reached by 2020 and a full 70% of respondents expected it to occur by 2022.

The twelve-page report, available for download here, also highlights several other key trends, including further analysis of the business and technical challenges facing those companies already offering OTT services—whether as a pure-play OTT provider or, in a growing trend, hybrid OTT delivery providers, offering OTT alongside a traditional form of media distribution—versus those that are only in the planning stages of OTT delivery.

"In the 2016 survey, we introduced a four-stage ranking system, from which each respondent could choose the closest match," said Timothy Siglin, survey and report author and Streaming Media contributing editor. "The 2017 survey continues with this methodology, which let us parse out responses against type of OTT delivery and maturity level of companies already offering OTT services."

One area of difference between the maturing players and those only planning to offer OTT services was their emphasis on an overall mix of OTT content types.

Traditionally OTT has been broken down as on-demand (VOD) and live, but Siglin says that live is diverging in to two separate categories: live-event (also known as pay-per-event or pay-per-view) and live-linear distribution (offering traditional broadcast channels via OTT delivery).

"VOD has always been the dominant OTT content type," said Siglin, "but over the past two years we've seen that live OTT—both live-event or live-linear distribution—have risen for those who already offer OTT services. Those still in the planning stages and not yet offering OTT services, though, continue to place more emphasis on VOD for their business plans."

The report notes that 2018 projected monetization strategies may place a bit more emphasis on growing pay-per-event transaction revenues over advertising and subscription revenues—referred to in another recent survey as T-VOD, A-VOD, and S-VOD, respectively—but the overall balance of monetization remains squarely behind a subscription approach.

Regardless of whether companies offer OTT or are planning for OTT services, and which monetization strategy they choose, there's strong agreement on how hot the OTT industry is in terms of anticipated year-over-year revenue growth.

"Only 16% of respondents said they anticipated no OTT revenue growth this year," said Siglin, "while over half said they expect to see between revenue growth of up to 25% year over year. What's even more impressive is that the remaining third of respondents are expecting revenue growth rates above 26% year over year, a clear sign that the OTT market is hotter than it’s ever been.”

Three final areas of interest for OTT services planning revolve around the fate of streaming technologies: 4K streaming, high-dynamic range (HDR) 1080p content, and virtual reality video (VR video). Each of these is highlighted in the report, with a set of results around VR video that show a shift in thinking from last year's report.

“User measurement and analytics also saw significant divergence between those in planning stages (stage 1) and those already offering OTT services,” said Siglin, highlighting the move away from homegrown measurement tools and toward CDN analytics and third-party tools as companies enter a maturing OTT delivery process.

"OTT Video Services—Innovation, Opportunity, Maturation & Technology Trends in OTT Delivery" is available to be downloaded today.

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