Global Over the Top (OTT) Market is projected to be worth USD 490.13 Billion by 2028, growing at a CAGR of 15.72%: Bonafide Research

Clifton, New Jersey, May 31, 2023 (GLOBE NEWSWIRE) -- The over-the-top (OTT) industry has revolutionized the way we consume entertainment and media content. With their rapid growth and widespread adoption, OTT platforms have become a dominant force in the entertainment landscape. These platforms deliver content directly to viewers via the Internet, bypassing traditional cable or satellite television providers. From streaming services like Netflix and Amazon Prime Video to video-sharing platforms like YouTube, the OTT industry offers a vast array of on-demand content, catering to diverse audience preferences. With its convenience, flexibility, and personalized viewing experiences, the OTT industry has redefined how we access and enjoy entertainment in the digital age. The potential of the over-the-top devices and services market is to grow and witness continuous growth on account of the widespread application of smartphones, smart TVs, and gaming consoles by service providers. OTT services were previously used for the distribution of audio and video content over the Internet. However, technological advances have contributed to the use of technology for video and game console applications. The adoption of OTT services with the adoption of cloud services and cloud technology has enabled service portability for OTT service providers. These service providers allow uploading data and accessing the content available online from anywhere and on any device. The new entrants for the adoption of OTT technology are Google LLC, Microsoft Corporation, and Apple Inc., among others.

The increasing adoption of OTT can be attributed to its narrow genre choices, flexibility, wider device availability, internet penetration, and overall lower costs. Furthermore, the rising demand for customized content led to significant adoption rates of OTT devices. This offered the users the flexibility to view varied content. Also, affordable rates of high-speed internet across emerging economies led to a massive increase in the adoption rates of subscription services, according to user convenience. This reflects key consumer behavior in terms of the smaller size and narrower content of OTT services, leading to wallet fragmentation (flexible payment models), thereby pushing buying decisions flexibly from the household level to the individual level. Furthermore, OTT streaming media firms are attempting to provide subtitles in additional languages so that any consumer anywhere in the world can access and enjoy the content. Additionally, Netflix, Inc. acquired Animal Logic Group of Companies, an animation studio, in 2022; with this acquisition, the company looks forward to strengthening its market in the animation business. The rise of OTT platforms has contributed to a significant "cord-cutting" trend, where consumers are canceling their traditional cable or satellite TV subscriptions in favor of OTT services. This shift is driven by the desire for more control over content choices and the flexibility of watching on-demand.

Key Takeaways:

• North America is dominating 41.84% of the market due to its substantial population and high level of internet penetration.
• SVOD (subscription video-on-demand) is expected to occupy 54.19% of the market share by 2028 due to increasing demand.
• Gaming consoles and streaming devices are expected to grow at a prominent CAGR of 16.49% by 2023–2028 owing to the increasing emergence of game streaming.
• OTT platforms are majorly emerging on the basis of media and entertainment service verticals, with a 73.43% share in 2022.
• The solution component is leading the overall OTT market with more than USD 160 billion in market size.

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OTT platforms have expanded their reach beyond their home markets. Streaming services like Netflix, Amazon Prime Video, and Disney+ are now available in numerous countries, allowing them to tap into a global audience and cater to diverse cultural preferences. They are not only distributing content but also producing their own original series and movies. This has led to an increased focus on high-quality productions and has given rise to acclaimed shows like "Stranger Things" (Netflix) and "The Handmaid's Tale" (Hulu), among many others. OTT platforms have also started to venture into live sports streaming, offering viewers the ability to watch their favorite sports events and matches online. This trend has disrupted the traditional sports broadcasting industry and allowed fans to access sporting events from anywhere, anytime. The availability of live sports streaming on OTT platforms has attracted sports enthusiasts and fans who seek more convenient and accessible ways to watch their favorite games. OTT platforms have secured rights to major sporting events, enabling viewers to watch matches and tournaments online. While subscription-based models dominate the OTT landscape, ad-supported streaming services have gained traction. Platforms like Hulu and Peacock offer free access to content supported by advertisements, providing an alternative option for viewers who are hesitant to pay for subscriptions. Consumer preferences have shifted from traditional television viewing to on-demand and personalized content consumption. Viewers now prefer the flexibility of choosing what they want to watch and when they want to watch it, which is provided by OTT platforms.

There are three major types of over-the-top (OTT) markets: AVOD (advertising-based video on demand), SVOD (subscription video on demand), TVOD (transactional video on demand), and others. Subscription video-on-demand (SVOD) stands for subscription video-on-demand. SVOD, like standard pay-TV packages, allows customers to access an entire catalog of programming for a fixed monthly fee. The main factor responsible for the surge in popularity of SVOD streaming platforms like Netflix, Amazon Prime Video, Hulu, HBO, and Disney+ is that users get unlimited access to original and high-quality content on the go. Further, the price innovation, bundling, and availability of original premium content for users in the country have increased the adoption of subscription video-on-demand (SVOD) services offered by the OTT platforms. Secondly, free and ad-supported services include Roku Channel, Crackle, and YouTube. Lastly, transactional services include Google Play, iTunes, Amazon Instant Video, and Vimeo, which enable users to pay for individual pieces of content. There’s a wide range of OTT platforms that provide OTT media services, including Netflix, Disney+, Hulu, HBO Max, Amazon Prime Video, Peacock, CuriosityStream, Pluto TV, and so many more.

The increased penetration of mobile phones and digital device networks, which fuels demand for OTT services, is the primary driver of the industry. There are more than 5 billion mobile phone users in the world today, which accounts for approximately 62.5% of the world population. By simply connecting their smart devices with the subscribed OTT services, viewers gain access to content anytime, anywhere, and on their device of choice. This is also helped by the fact that mobile network operators (MNOs), particularly in emerging countries, have accelerated the rollout of mobile broadband and LTE. At the same time, MNO partnerships and bundling of packages have made it affordable for consumers to gain access to even more content on their mobile devices. Therefore, the mobile channel is quickly emerging as the most preferred video delivery platform as well as the predominant service distribution channel for accelerated growth. Internet penetration and the proliferation of smart devices, along with an increase in disposable income, have enabled users to avail themselves of OTT services at the click of their fingertips.

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Platforms are investing in technologies and features to enhance the viewing experience. This includes improvements in video quality, faster load times, and support for higher resolutions such as 4K and HDR. Additionally, advancements in virtual reality (VR) and augmented reality (AR) might play a role in creating more immersive experiences for viewers. Also, with the rise of smart home devices, there is a growing opportunity for OTT platforms to integrate and offer seamless streaming experiences across various devices, including smart TVs, voice assistants, and connected speakers. Ad-supported OTT platforms are exploring innovative advertising formats and targeting capabilities. This includes interactive and personalized ads, as well as leveraging viewer data to deliver more relevant and engaging advertisements. OTT platforms have contributed to the rise of binge-watching culture, where viewers consume multiple episodes or even entire seasons of a TV series in one sitting. The availability of entire seasons at once and the absence of traditional airing schedules have fueled this behavior. The rollout of 5G networks will significantly enhance streaming capabilities, enabling faster download and upload speeds, reduced latency, and more reliable connections. This will facilitate the streaming of high-quality, high-resolution content on mobile devices and open up new possibilities for real-time streaming experiences.

Video streaming has experienced significant growth in recent years. OTT platforms have been investing heavily in original content production. Netflix, for example, has allocated billions of dollars to create original TV shows and movies. This has led to increased competition among streaming services to produce unique and high-quality content to attract and retain subscribers. Game streaming platforms like Twitch and YouTube Gaming have gained a massive following. Viewers can watch live gameplay, interact with streamers through chat, and even participate in esports events. The emergence of cloud gaming services like Google Stadia and Microsoft xCloud has further expanded the gaming experience on OTT platforms. OTT platforms have integrated with smart devices and voice assistants, allowing users to control their streaming experience through voice commands. Services like Amazon Alexa and Google Assistant enable users to search for content, play specific shows or movies, and control playback using voice control. In addition to that, the popularity of eSports has soared in recent years, and live game streaming platforms have played a significant role in its growth. Platforms like Twitch have become the go-to destinations for watching professional gamers compete, attracting millions of viewers and creating a dedicated eSports community.

"The future of the OTT market is expected to see further growth and innovation, with advancements in technologies like 5G, augmented reality (AR), and virtual reality (VR) poised to enhance the streaming experience and create new avenues for immersive content delivery," says Mr. Dhwipal Shah, Research Director with Bonafide Research. While OTT platforms have experienced significant growth, achieving profitability can be a challenge. High content acquisition costs, heavy investments in original programming, and intense competition can make it difficult to generate sustainable revenue streams. With the growing use of ad-blocking software and users' aversion to excessive advertising, striking the right balance between ad monetization and providing a positive user experience becomes crucial. TT platforms collect and analyze user data to personalize recommendations and improve their services. However, ensuring user privacy and data security is a significant concern. Leading OTT platforms have amassed massive subscriber bases. As of 2021, Netflix reported over 209 million paid subscribers worldwide, followed by Amazon Prime Video with over 200 million subscribers and Disney+ with over 100 million subscribers within just a year and a half of its launch. Original Content Investment: OTT platforms have been investing heavily in original content production. In 2020, Netflix spent an estimated USD 17 billion on content, while Amazon Prime Video and Disney+ allocated substantial budgets for original programming to attract and retain subscribers. OTT platforms have expanded their reach to various countries and regions worldwide. Netflix, for instance, operates in over 190 countries, while Amazon Prime Video is available in more than 240 countries and territories. This global expansion has led to increased content diversity and localization efforts.

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OTT platforms are not limited to entertainment content; they also offer educational and entertainment programming. Educational platforms like Khan Academy and TED-Ed provide educational videos, while edutainment platforms like Discovery+ and National Geographic offer a combination of educational and entertaining content. Furthermore, streaming on 4K televisions is a key trend in the OTT (over-the-top) streaming market. A 4K resolution is typically 3,840 x 2,160 pixels and is also known as UHD or ultra-high definition. This is the highest level of high-definition video quality available to film, television, and sports viewers these days. Nowadays, most of the latest TVs are 4K-compliant. Major streaming services such as Netflix, Disney+, and Amazon Prime Video have included premium 4K and 4K content in their services. FuboTV debuted its first live TV broadcast in 4K with HDR. The only sports that took advantage of this improved visual quality were World Cup matches, but later the company added some NCAA football matches in 4K. In November 2021, Fubo TV, a US-based television streaming company, acquired Molotov for an undisclosed amount. The acquisition would provide the company with an extended footprint in the European market. Molotov is a French television streaming company. Younger generations, such as Millennials and Gen Z, are driving the growth in OTT viewership. These demographics have grown up in the digital age and prefer the flexibility, convenience, and personalized content offerings of OTT platforms over traditional TV.

In the year 2022, North America held the largest market share with over 40% in the over-the-top (OTT) market, and is also expected to retain its dominance throughout the forecast period. Netflix is one of the major players in the North American OTT market and has a significant subscriber base in the region. It pioneered the OTT streaming model and continues to be a leading provider of on-demand video content. While Netflix has been a dominant player, the North American OTT market has become increasingly competitive with the entry of other major players. Companies like Amazon Prime Video, Hulu, and Disney+ have gained traction and have been successful in attracting subscribers. OTT platforms have been investing heavily in original content production to attract and retain subscribers. Netflix, in particular, has been known for its extensive library of original series and films, including popular shows like "Stranger Things" and "House of Cards." The use of streaming devices, such as Roku, Apple TV, and Amazon Fire TV, has grown in North America. These devices provide an easy way to access multiple OTT platforms on a television screen, further fueling the growth of the OTT market.

The European OTT market offers a wide range of content across various genres, including movies, TV shows, documentaries, sports, and original productions. Both local and international content providers are actively participating in the market, offering viewers a diverse selection of entertainment options. The OTT market in Europe has contributed to the cord-cutting trend, where viewers are increasingly opting for streaming services over traditional cable or satellite TV subscriptions. This shift is driven by the convenience, flexibility, and on-demand nature of OTT platforms. The European OTT market is highly competitive, with major global players like Netflix, Amazon Prime Video, and Disney+ vying for market share. In addition to these international players, several regional and local OTT platforms have emerged, catering to specific countries or language preferences. Some European OTT platforms have adopted hybrid models that combine subscription-based services with advertising-supported free content. This allows them to cater to a wider audience while generating revenue from both subscription fees and advertising. Along with international giants, several European OTT platforms have achieved notable success in their respective markets. Examples include Sky Go (United Kingdom), MyCanal (France), Viaplay (Nordic countries), and Now TV (Italy), among others.

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Asia-Pacific is anticipated to make significant contributions to the overall market expansion in the coming years. This dominance is backed by the massive population and their growing inclination toward entertainment, leaving no age bracket out of the loop. Besides, the prevalence of Bollywood and the constant release of new movies and web series, especially across countries like India, are also fuelling the demand for OTT platforms and generating lucrative opportunities for the leading players in the industry through 2027. While global OTT giants like Netflix, Amazon Prime Video, and Disney+ are present in the region, there is also a significant presence of regional and local players. Platforms like iQIYI, Tencent Video, Viu, ZEE5, Hotstar, and Iflix have gained prominence by offering localized content and understanding the preferences of Asian viewers. Asia-Pacific has a strong mobile culture, with a significant portion of the population accessing the internet primarily through smartphones. As a result, mobile streaming dominates the OTT market in the region, and many platforms have developed mobile-friendly interfaces and apps to cater to this trend. While urban areas have high OTT penetration, platforms are increasingly focusing on expanding into rural and semi-urban areas. Efforts include providing affordable data plans, partnering with local content producers, and offering content in regional languages to tap into the untapped potential of these markets. The increased popularity of Korean dramas is part of the broader Hallyu Wave, or the Korean Wave, which refers to the global popularity of Korean culture, including music, TV shows, movies, and fashion. The Hallyu Wave has helped promote Korean dramas and contributed to the growth of the OTT market in the Asia-Pacific region.

The over-the-top (OTT) media market in South America has been growing in recent years due to increased internet penetration and growing demand for online content. The use of OTT services like streaming video, social media, and online gaming has become increasingly popular in the region, with major players like Netflix and Amazon Prime having a strong presence in the market. However, the OTT market in South America also faces several challenges, such as limited broadband infrastructure in some areas, low levels of internet penetration in rural areas, and a lack of local content production. However, in the Middle East and Africa, the OTT video market is still evolving in terms of content and business models. Companies like GloboPlay (Brazil), Movistar Play (multiple countries), and Claro Video (multiple countries) have established themselves as prominent players in the market. However, the population and demographics across the region are highly attractive as a market for existing and new market participants. Internet penetration, supplemented by the explosion of smartphones, has altered the way the Middle East and Africa watch television. This growth is augmented by government initiatives on internet proliferation and large-scale digital transformation. Along with pricing, customization and personalization with data analytics will play a key role in defining the market leader over the next five years. The internet penetration rate in the Middle East and Africa (MEA) region varies widely among countries, but overall, the region has lower internet penetration compared to other regions such as Europe and North America. According to recent data, the average internet penetration rate in the MEA region is around 50%, but this can range from over 90% in countries like the United Arab Emirates to less than 30% in countries such as Yemen. Factors contributing to low internet penetration in the region include limited access to high-speed internet, affordability issues, and limited infrastructure development in rural areas.

Considered in the Report

• Geography: Global
• Historic Year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Table of Content

1.    Executive Summary
2.    Market Dynamics
2.1.  Market Drivers
2.2.  Challenges
2.3.  Opportunity
2.4.  Restraints
2.5.  Market Trends
2.6.  Covid-19 Effect
2.7.  Supply chain Analysis
2.8.  Policy & Regulatory Framework
2.9.  Industry Expert's Views
3.    Research Methodology
3.1.  Secondary Research
3.2.  Primary Data Collection
3.3.  Market Formation & Validation
3.4.  Report Writing, Quality Check & Delivery
4.    Market Structure
4.1.  Market Considerate
4.2.  Assumptions
4.3.  Limitations
4.4.  Abbreviations
4.5.  Sources
4.6.  Definitions
5.    Economic /Demographic Snapshot
6.    Competitive Landscape
6.1.  Competitive Dashboard
6.2.  Business Strategies Adopted by Key Players
6.3.  Key Players Market Share Insights and Analysis, 2022
6.4.  Key Players Market Positioning Matrix
6.5.  Consolidated SWOT Analysis of Key Players
6.6.  Porter's Five Forces
7.    Global Over The Top (OTT) Market Outlook
7.1.  Market Size By Value
7.2.  Market Size and Forecast, By Geography
7.3.  Market Size and Forecast, By Type
7.4.  Market Size and Forecast, By Device Type
7.5.  Market Size and Forecast, By Content Type
7.6.  Market Size and Forecast, By Service Verticals
7.7.  Market Size and Forecast, By User Type
7.8.  Market Size and Forecast, By Component Type
8.    North America Over The Top (OTT) Market Outlook
8.1.  Market Size By Value
8.2.  Market Share By Country
8.3.  Market Size and Forecast By Type
8.4.  Market Size and Forecast By Device Type
8.5.  Market Size and Forecast By Content Type
8.6.  Market Size and Forecast By Service Verticals
8.7.  Market Size and Forecast By User Type
8.8.  Market Size and Forecast By Component Type
8.9.  US Over The Top (OTT) Market Outlook
8.9.1.    Market Size By Value
8.9.2.    Market Size and Forecast By Type
8.9.3.    Market Size and Forecast By Device Type
8.9.4.    Market Size and Forecast By Content Type
8.9.5.    Market Size and Forecast By Service Verticals
8.9.6.    Market Size and Forecast By User Type
8.9.7.    Market Size and Forecast By Component Type

For detailed TOC

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