The increasing internet and smart device penetration, rising average internet speed, and surging usage of video on demand (VoD) services are the key factors driving the global over-the-top (OTT) services market. Due to the aforementioned factors, the revenue generated by the market was $91,881.6 million in 2020, and it is predicted to see significant growth during the forecast period (2021–2030).
In 2020, due to the COVID-19 pandemic, the OTT services market benefitted to a huge extent. The imposition of multiple lockdowns and other restrictions brought the cinema industry to a halt. This was because theatres across all countries were shut, which halted the release of upcoming movies. Similarly, major sports events were cancelled, postponed, or were not given the permission to allow spectators at the venue, which drastically reduced the revenue generation for sponsors. This gave OTT platforms an opportunity to show movies and sporting events under the pay-per-view model. Furthermore, the lockdowns imposed by the governments gave people more time and a bigger excuse to consume the content available online, and, hence, the viewership of major streaming platforms saw a significant increase.
Online Gaming to Witness Maximum Demand
The OTT services market is categorized into online gaming, music streaming, VoD, communication, and others, based on type. Among these, the online gaming category is projected to hold the largest market size during the forecast period. Internet-connected gaming consoles such as Sony Playstation 4, Xbox One, and Wii U, allow online gaming. Furthermore, the high cost associated with these games are contributing towards the high revenue generation in this category.
The increasing use of smartphones and tablets, combined with the rising internet penetration is driving the growth of the smartphones and tablets category, based on streaming devices. For example, according to the World Bank data, the percentage of people who use the internet has increased to 51.1% in 2019 from 34.2% in 2012. Furthermore, the portability and usage convenience of smartphones and tablets combined with apps with enhanced features such as the ability to download and stream high-quality content are boosting the usage of OTT services on these consumer electronics.
Geographically, North America was the largest consumer in the OTT services market in 2020. This is mainly attributed to the high disposable income of regional households which enables them to pay for the subscriptions of premium content. Furthermore, the high internet penetration in the region is contributing to the growth of the industry.
Asia-Pacific (APAC) is expected to be the fastest-growing market for OTT services during the forecast period. This will primarily be due to the large population, increasing smartphone user base, and siring internet penetration in developing countries such as India and China.
Mergers and Acquisitions and Service Launches are Most-Effective Strategic Measures Taken by Market Players
Players in the OTT services market are involved in mergers & acquisitions and service launches to gain a significant position. For instance, in July 2020, The Walt Disney Company acquired Indian OTT giant Hotstar and renamed it to Disney+ Hotstar. The deal took almost one year to materialize, and The Walt Disney Company expects to compete against regional video streaming platforms, such as Netflix and Amazon Prime Video.
Similarly in July 2020, telecom operator Jio announced that it will bring 12 OTT apps, such as Netflix, Amazon Prime, Disney+ Hotstar, Voot, SonyLiv, Zee5, JioCinema, JioSaavn, and YouTube, under its application Jio TV+, which will allow these services to be available on a single platform, which can be viewed on TVs.
The major players operating in the global OTT services market include Netflix Inc., Roku Inc., Amazon.com Inc., The Walt Disney Company, Google LLC (YouTube), Apple Inc., Facebook Inc., Telstra Corporation Ltd., Rakuten Inc., and Kakao Corp. PS Market Research