Over the last decade, the way we engage with entertainment, especially video content, has undergone a significant transformation. More and more people are turning to the internet not only for entertainment but also for information and education. This change has been largely driven by the rise of Over-The-Top (OTT) video technologies. The OTT service market, specifically for video, is on a growth trajectory and is expected to reach a remarkable $247 billion by the year 2027.
Gone are the days when unlimited entertainment from a handheld device was a mere fantasy. Thanks to rapid technological progress, this is now a reality. In today’s competitive landscape, it’s crucial for businesses to deliver the highest value to their customers, and OTT platforms have emerged as the most effective and practical method for consuming content.
The widespread popularity of OTT platforms is quite understandable. Reports suggest that an overwhelming 98 percent of Americans are subscribed to at least one streaming service. This high level of engagement is a testament to the effectiveness of OTT as a content delivery method. Furthermore, the COVID-19 pandemic has played a significant role in accelerating this trend. With more people staying at home, there has been a surge in streaming content on OTT platforms, leading to increased demand for these services. This shift underscores the resilience and adaptability of OTT platforms in meeting the evolving needs of consumers in a rapidly changing world.
What is OTT?
OTT, short for “Over-the-Top,” represents a modern method of media distribution that challenges traditional television formats, such as cable or satellite. This technology enables users to stream video content directly over the internet to various devices, bypassing conventional broadcasting methods. There are three primary types of OTT services:
- Subscription-Based Services (SVOD):
These are premium platforms where users pay for access to a wide range of content. Examples include Netflix, Disney+ Hotstar, and MAX, where viewers subscribe to enjoy movies, TV shows, and documentaries.
- Ad-Supported Streaming (AVOD):
Services like Pluto TV and Amazon Free provide free access to content, supported by advertisements. These platforms do not have premium levels and are accessible to anyone with an internet connection.
- Virtual Multichannel Video Programming Distributors (vMVPDs):
These are companies that offer live and on-demand video content over the internet, through multiple channels. YouTube, Hulu +Live TV, and Sling TV are examples of this type, offering a range of channels and content choices similar to traditional cable TV but delivered over the internet.
OTT platforms have become immensely popular due to their convenience and flexibility. They provide viewers with the freedom to watch a diverse range of shows, movies, and documentaries anytime, anywhere, without the need for satellite or cable connections. This flexibility, combined with the option of free and subscription-based content, allows users to trial different OTT apps before deciding on a subscription. Furthermore, many OTT platforms enhance user experience by offering personalized recommendations and a vast library of content, including exclusive original productions, to maintain user engagement and satisfaction.
Different Types of OTT Platforms
The different types of OTT platforms cater to various entertainment needs:
- Video Streaming Platforms:
These are perhaps the most recognized OTT services. They allow users to watch a wide variety of video content, including movies, TV shows, documentaries, and other on-demand videos. Mostly available through subscription-based models, popular examples include Disney+, Hulu, and Netflix.
- Music Streaming Platforms:
Services like Spotify and YouTube Music fall under this category. They enable users to stream music, create and listen to playlists, enjoy podcasts, and more, all online. This has significantly reduced the reliance on traditional physical mediums like CDs or cassettes. These platforms often offer personalized music experiences with custom playlists and recommendations.
- Live TV Streaming:
This type of OTT service focuses on live content. Users can watch events as they happen in real-time, such as live news broadcasts, sports events like football games, and various live entertainment shows. This brings the immediacy and excitement of live TV to the internet.
- Gaming OTT Platforms:
A relatively new addition to the OTT space, these platforms combine traditional entertainment content with interactive gaming experiences. Users can both watch shows and play games within the same service. An example of this innovation is Netflix, which in 2021 introduced Netflix Games, specifically catering to mobile users.
The growth and diversification of OTT platforms indicate a significant shift in entertainment consumption, offering users more flexibility, variety, and personalized content across different types of media.
OTT Market Size and Share
The Over-the-Top (OTT) streaming market is primarily driven by the increasing popularity of subscription-based video on demand (SVOD) services and the widespread use of smartphones, coupled with faster internet speeds. Key players in this market, particularly in North America, include major services like Netflix and Amazon Prime Video.
Looking at the market size, the Global OTT Market is expected to surge from USD 0.45 trillion in 2023 to an impressive USD 1.56 trillion by 2028, growing at an annual rate of 28.19% over this period. In 2022, the global OTT market size was around $202.5 billion, and it’s projected to reach approximately $434.5 billion by the end of 2027.
In the United States, OTT streaming is becoming increasingly popular. It’s estimated that by 2023, 245.3 million Americans, or 72.2% of the population, will use OTT streaming services at least once a month. Netflix, which introduced a new ad-supported tier in 2022, reported gaining over 5 million customers by May 2023. In terms of advertising, US sub-OTT video advertising spending is expected to reach nearly $10 billion in 2023, accounting for a significant portion of digital and video advertising.
Moreover, Connected TV (CTV) advertising in the US is also on the rise, with an expected increase of 49.6% in 2023, reaching $8.04 billion. According to Statista, the number of OTT video users was 3.26 billion in 2022 and is anticipated to climb to 3.51 billion in 2023, and further to 4.22 billion by 2027. User penetration is expected to grow from 45.7% in 2023 to 53.0% in 2027, with an average revenue per user (ARPU) projected to be around US$90.14 in 2023.
North America accounted for a substantial portion of the overall market. Within the US 64 million houses are utilizing OTT and a typical monthly view is greater than 80 hours of OTT data. Additionally, OTT content types mostly associated with games, education, and entertainment are seeing an increase in popularity, with over 60% access to homes that have WIFI.
The”Over-the-Top” (OTT) market is streaming audio, video, and other media content via the Internet directly to the user without the need for traditional distribution channels such as satellite or cable television. OTT platforms offer streaming access to a broad variety of content, such as television shows, movies live events, as well original programming.
The Over-the-Top (OTT) can be described as a movie and television content platform accessible through a high-speed internet connection, not a satellite or cable provider-based platform. OTT adoption has significantly helped music, video, podcast, and audio streaming. The rise in adoption is due to the limited genre options and flexibility in packaging, as well as access to devices, greater internet penetration, and lower cost. In addition, the increasing demand for personalized content has resulted in significant growth in the adoption rate of OTT devices.
The COVID-19 virus has profoundly affected the Over-the-Top (OTT) industry. This global epidemic as well as the measures to lock down the population caused an increase in stream services. It also led to the rapid expansion of the OTT industry in many ways. With many people staying in their homes because of restrictions and looking for entertainment alternatives and streaming options, demand for these services increased dramatically.
The above figures show the proportion of population in each region in percent, global 2018, and 2023.
We can see that globally 66% of people are Internet users. Asia Pacific is 72% and the population in Central as well as Eastern Europe is 78%
Latin American internet users are approximately 70 70%.
Middle East and African populations utilize only 35% of the internet, which is among the lowest of all.
North American and Western European populations have the highest use of the internet, with 92% and 87 percent respectively.
General OTT Platform Statistics
- The revenue generated by OTT platforms within India is expected to be $2.53 billion before the end of 2022.
- The largest market is video streaming (SVoD) with an estimated market worth $1.07 billion by 2022.
- In the year to come, the average amount of revenue per user for OTT platforms is estimated at $6.38 billion.
- Revenues of the Indian segment of OTT platforms have been estimated to be $2.53 billion for 2022.
- Based on the top 10 Indian OTT platforms Statistics user participation on OTT platforms by the end of 2022 is
estimated to be 28.2 percent, which is expected to increase to 36% by 2027.
- The projected market for video OTT market size in 2030 stands at $12.5 billion.
- According to Top Ten Indian OTT Platforms Statistics in 2021, the recorded total number of digital-only content users was around twelve million.
- The most favored OTT platform for watching television and movies that are available in Indian local languages can be found on Amazon Prime Video.
- The estimated audio OTT market to 2030 stands at $2.5 billion.
- The digital segment of India ranks second in the top spot for the highest percentage of industry and media that will dominate the market for television in the near future.
- The top 10 Indian OTT platforms. Statistics indicate that the number of people who have made it through OTT platforms at the time of February 2022 is 658 million people in India.
- In 2027, the number of customers of video on demand in India will be projected to grow up to 178.4 million.
- In 2020, the revenue generated by the OTT market in India was $2.01 billion, which grew to $2.95 billion by 2021.
- In 2026, it is anticipated that the revenues will grow up to $6.73 billion.
- In those years, Disney+ Hotstar, Amazon Prime Video, and Netflix played an important part.
- On average, Indian people spend around 70 minutes per day using OTT platforms, with a frequency of use of 12.5 times per week.
- It is estimated that there exist approximately 45 OTT providers operating within India.
- According to the Top 10 Indian OTT Platforms Statistics, India currently has approximately 45 million over-the-top (OTT) users on platforms, which include diverse platforms and services.
- In 2023 by 2023, the OTT market will be the size of Rs12,000 crore with an increase of 36 percent.
- For India, 55 percent of viewers reside in the top five metro cities, and 34% of users reside in the tier one cities.
Enterprise Apps Today