The growth of virtual multichannel video programming distributor subscription OTT services shows no sign of stopping and is set to claim a subscriber base of 400 million at the end of 2018, a survey from ABI Research has found.
Due to their relatively low prices and lack of long-term contracts compared with pay-TV packages, these OTT video services have attracted hundreds of millions of subscribers worldwide, causing pressure on traditional operators to compete through offering their own versions. ABI cites DirecTV’s Now, Dish Network’s Sling TV, and Sky’s Now TV are among the operators which offer vMVPD services, linear channels via an internet connection. In addition, Hulu and YouTube launched live streaming packages in 2017 creating more competition in the vMVPD market.
“vMVPD services offer live TV packages as low as US$10 and customised packages are attracting cost-sensitive customers,” explained Khin Sandi Lynn, Industry Analyst at ABI Research and author of the Service Provider OTT Services and Set-Top Boxes Update report “Dish Network’s Sling has secured more than two million subscribers in the two years since it launched. Similarly, DirecTV Now has gained 1.2 million subscribers within one year of its launch, offsetting the subscriber loss of its satellite TV platform. Pay-TV operators recognise the consumer demand for vMVPD services and are trying to expand their OTT offering by providing more content choice to compete against other subscription OTT services such as Netflix.”
ABI added that despite the low cost of basic vMVPD packages, the availability of live sports packages and customisation features contribute the higher ARPU compared to other subscription OTT services. It calculated that the worldwide OTT video market is expected to grow at a CAGR of 10% to generate US$51.4 billion in 2022. “As competition intensifies, content and quality of service are crucial to win the OTT war,” concluded Lynn.
“vMVPD services offer live TV packages as low as US$10 and customised packages are attracting cost-sensitive customers,” explained Khin Sandi Lynn, Industry Analyst at ABI Research and author of the Service Provider OTT Services and Set-Top Boxes Update report “Dish Network’s Sling has secured more than two million subscribers in the two years since it launched. Similarly, DirecTV Now has gained 1.2 million subscribers within one year of its launch, offsetting the subscriber loss of its satellite TV platform. Pay-TV operators recognise the consumer demand for vMVPD services and are trying to expand their OTT offering by providing more content choice to compete against other subscription OTT services such as Netflix.”
ABI added that despite the low cost of basic vMVPD packages, the availability of live sports packages and customisation features contribute the higher ARPU compared to other subscription OTT services. It calculated that the worldwide OTT video market is expected to grow at a CAGR of 10% to generate US$51.4 billion in 2022. “As competition intensifies, content and quality of service are crucial to win the OTT war,” concluded Lynn.
