cc William Iven

Video OTT market explained

There is not a single week or day we hear in the news a company announcing to go after the video OTT market space, merging, acquired(ing) etc.

Why the rush in the video OTT market?

Basically for 2 reasons:

source: Ooyala video index Q4 2015
source: Adobe Digital index, Q1 2016, noteTV connected devices are apple tv, roku type of OTT devices, NAM only, authenticated is subscribed paid service)
Spend Allocation by types 2014–2016

What are the companies going after the video market?

Before digging into the winners and losers of the video market, it is important to take a snapshot of the video OTT market players with this 2x2 matrix. On the x-axis you have video content format, live or recorded/on demand. On the y-axis you have the video content type, either labelled or not (user generated content/broadcasted).

Global Video OTT Market players overview (not exhaustive lists)
  1. Pay-Tv broadcasters like BeIn Sport (Europe and Middle East), Canal+ (France) or Comcast in the USA etc.
  2. New entrants that can be sub divided into 3 groups:
  • Internet players: Google/YouTube, Amazon, Facebook, Netflix and others
  • Telcos: Telefonica/moviestar (Spain), Globe (Philippines), Astro (Malaysia) and America Movil (Latin America) and many others.

How they position themselves?

If we look at the market dynamics, we observe 3 big shifts:

  • Facebook users watch 100 million hours of video on mobile everyday
  • Facebook daily views have gone from 1 billion early 2015 to 8 billion video views over the year.

What will happen next?

The battle is raging in the Video OTT markets with traditional broadcaster and Pay-tv pressurized from all sides. Internet players are aggressively pursuing the opportunity in the Video ad market reconfiguration. But there are not alone, Telcos want to enter and take a piece of the 74,1bn TV/video ad market expected in 2017, with digital video ad spending rising at 28% CAGR 2013–17 and programmatic video ad 150% CAGR in the same period while traditional TV/video ad spend in declining slowly (source: eMarketer, Luma).

TV/Video ad spending forecast 2013–2017 by segment (source: emarketer and luma)
Internet players and Telco convergence in the video OTT market
  • Independent broadcaster days are ending soon. Either partner or acquired by any firm from both groups
  • Big is getting bigger. It applies for Telcos (i.e. NBC/Comcast) or internet players though consolidation, audience and ad tech acquisitions to strengthen their TV/Video platform attractiveness to advertisers (i.e. NBC UX or Telstra)
  • Expect Apple to make a bold move in acquiring content firm(s). Some rumors about Apple discussing with Time Warner. That could boost Apple in the video OTT market with CNN and HBO making the Cupertino firm a leading video OTT market players in all segments.
  • Expect leading entertainment players in Media adjacent markets like video gaming or sports betting sites or publishers making moves in the video OTT market. Sony with PlayStation (i.e ps4 vue), Microsoft with Xbox but also Nintendo (with their coming gaming console to be announce end of 2016).
  • Expect leading devices manufacturers and OTT software vendors moving in the video OTT market with vertical acquisitions to provide UX, Video back end, tools and services to Telcos and media & entertainment firms (i.e Rovi/TiVo)

Product Lead II Startup advisor II Researcher II Prof. (^_^)

Product Lead II Startup advisor II Researcher II Prof. (^_^)