Skinny bundles fail to dent OTT giants | OTT | News | Rapid TV News
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
Low ARPU at half the traditional TV average, lacklustre margins, programming gaps and technical issues are seeing live multichannel OTT services provide little competition to the likes of Netflix and Amazon says Convergence Research Group.
In the thirteenth version of its The Battle for the American Couch Potato: OTT and TV report, the analyst says that the TV and film industry is being reconstructed from the inside and by the outside, as programmers now directly compete against their traditional TV access and independent OTT buyers that rival in terms of content spend. Moreover it predicts that We believe a number of OTT plays, including large and niche, will fail due to insufficient subscriber traction, cost and competition.

Based on 66 OTT providers, led by Netflix, Hulu, Amazon, the survey estimates US OTT access revenue grew 37% to $16.3 billion in 2018. The research noted that fundamentally traditional TV access subscriptions continue to decline and that as subscribers pay higher prices due to ongoing programmer price increases while traditional TV advertising revenue plateaus. Indeed the analyst projects that 2020 revenue for the latter will beon par with 2016.

The firm calculated that 2018 US cable, satellite, telco TV access revenue, not including OTT, declined 3% to $103.4 billion and the year saw a decline of 4.013 million US TV subscribers, 2017 a decline of 3.661 million.

Attributing reasons for the falls, Convergence Research Group said being caught in the programmer versus independent OTT squeeze play hampers TV access provider margins, however as the majority of TV access providers are also Internet providers there are benefits to facilitating the rise of OTT. It said that 2.85 million US residential broadband subscribers were added in 2018 and revenue grew 7% to $61.6 billion.

Yet even with new OTT offers from Apple, Disney, NBCU, Quibi, Warner, and billions of OTT revenue added, and although US OTT subscriber household trajectory will well surpass US TV households, the Battle for the American Couch Potato: OTT and TV report warns that US TV subscriber ARPU will not hit the heights once forecast.