2015 is proving to be a blockbuster year for over-the-top (OTT) video services, but we are a long way from peak OTT says a Parks Associates study.
Indeed the report, The OTT Playbook, Part II: Keys to Building Momentum, commissioned by Vindicia and Ooyala, found that the market now has more than 65 players — either currently offering video services or announcing plans to do so in the coming months. In addition to current OTT leaders Netflix, Hulu Plus, HBO and Amazon Prime, the report identified a number of up and coming players across major markets who have stated their intentions to introduce OTT services, including SingTel, Sony, Warner Bros, Overstock.com and Samsung.
Moreover, Parks Associates calculated that approximately 1.6 billion people worldwide actively watch online video on a variety of connected devices, representing just over a fifth of the planet's population. In addition, it estimated 900 million access TV programming and movies online today, and predicts this number will rise to over 1.3 billion video viewers by 2019.
Parks Associates believes that OTT consumers' first priority is content, with 70% of consumers subscribing to services like Netflix and Hulu Plus due to specific titles available through the service, and over a third of consumers doing so in order to access original content. The size of the video library and the amount of recent content were also important factors.
Right after content, service availability was another critical consideration and even though in-home viewing of content with a mobile device is common, and consumers also expected an OTT service to be available on multiple platforms, most consumers still wanted to watch on the largest screen available. Generally speaking, television-based viewing is still preferred to viewing on a computer, which is itself more popular than tablet-based viewing. Yet almost half of consumers who watch video on connected devices want to be able to use four or more different connected platforms to access OTT video content.
That said, the report also identified areas in which it felt providers in general needed to up their game; namely, differentiation, accurate targeting, service discovery, availability and monetisation. As regards the latter, Parks noted that several business model and promotional options beyond free trial periods were emerging for OTT services that can encourage greater and/or recurring revenues. These currently include ad-free subscriptions, restricted content subscriptions, bundling of linear channels online, limited subscriptions with premium transactional use and loyalty programmes.
"OTT services face a race for content and a race to reach consumers on all of their connected devices," commented Vindicia SVP marketing Bryta Schulz. "However, with so many players entering the market, interesting content and widespread availability alone are not enough to guarantee survival. Players must be able to look beyond their own services and establish strategies to achieve success in the context of heightened competition."