Connected CE Devices Help Broadcasters Grow OTT RevenuesTuesday, August 21st, 2012
AUSTIN, Texas, US — Over-the-Top video service providers are keen to establish a strong presence on the variety of connected consumer electronic devices being installed in consumers’ homes, given the revenue opportunity that these devices present. IMS Research, recently acquired by IHS Inc. (NYSE: IHS), forecasts that in 2017, 27 percent of OTT video transactions will be initiated via fixed connected CE within the home, accounting for 46 percent of world OTT market revenues generated that year.
IMS Research has recently published a new study Business Model Evolution in OTT and On-demand Video Markets – 2012 Edition, which provides insight into different types of strategies employed by OTT service providers to extend their services into new devices. Geographic expansion of large OTT portals such as Amazon, Apple and Netflix is one of the main drivers behind the growing adoption of OTT video via connected CE, both fixed in-home devices and portable CE such as tablets and smartphones. Furthermore, platforms such as the UK’s YouView and HbbTV in mainland Europe are enabling broadcasters and pay-TV operators to extend the reach of their existing video assets. IMS Research forecasts that in 2017, broadcasters will account for 17 percent share of world OTT video market revenues, and pay-TV operators for 11 percent share.
Anna Hunt, principal analyst with IMS Research and author of the study, comments, “Broadcasters need to be innovative on how to effectively monetize their content beyond the traditional means because content such as movies and fictional TV series are expected to transition to on-demand delivery more rapidly. With OTT technologies, broadcasters are given an opportunity to complement their broadcast offerings, to improve sports and live events, and to monetize content that has passed the 7-day catch-up TV window.” The study estimates that broadcasters will generate $1.8 billion in OTT market revenues in 2012, mostly through advertising, and will grow this to $5.9 billion in 2017. Over the next five years, more broadcasters will attempt to monetize back catalog content via the pay-per or subscription model, as well as look to international expansion as a means of generating OTT revenues, as in the case of the BBC’s global iPlayer app.
Hunt adds, “Many of the major broadcasters in Europe are offering OTT apps for connected CE devices and supporting these services advertising revenues. Yet, these alternative efforts are never meant to replace the broadcast channel. A concern exists, particularly in emerging markets such as Russia, that these alternatives may affect typical channel performance and distract viewers away from the broadcasters’ core offerings.”