Majority of US OTT services subscription-only | Media Analysis | Business
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Over-the-top was once regarded as heralding a wild-west in video but research from Parks Associates has found that in two key North American markets, the majority of services are available by subscription.

OTT busin models 20 JulyThe analyst’s OTT Video Market Tracker shows that the number of services with advertising-reliant models has also declined, due to low ad revenues and lack of viewership and that 55% of OTT services in the US currently have a subscription-only business model, such as Netflix or Hulu, while in Canada the figure is 50%.

The OTT Video Market Tracker shows other popular business models for the OTT space include transactional, freemium, advertising, and a mix of subscription and transactional. It notes that services such as Yahoo! Screen have dropped out of the market, and other services, such as DramaFever, have added subscription tiers to transition into the freemium category.

“Services are experimenting with a variety of business models in order to differentiate themselves in this crowded market dominated by Netflix, Hulu, and Amazon. Smaller OTT companies are experimenting with the freemium model in particular,” said Ruby-Ren Bond, Research Analyst, Parks Associates. “The subscription services with smaller bases are increasingly partnering with other players, such as Amazon, Hulu, and Roku, which allows them to remain viable in a crowded market dominated by the top players.”

Added Parks senior director of research Brett Sappington: “there is an enormous amount of change going on in the OTT space right now, with new OTT video services entering the market each month. Many of these services have subscription as at least part of their business model. The recent ruling of the U.S. Court of Appeals for the 9th Circuit is not likely to affect OTT video service business models. An OTT video service is unlikely to pursue legal action against someone who pays less than $10 per month unless they are doing something that disrupts the service.”