FAANG firms to continue to take deep bite of OTT arena | Media Analysis | Business
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Even though tech giants Facebook, Apple, Amazon, Netflix and Google are about to slug it out with Disney, Apple, HBO, Discovery and NBC for direct-to-consumer supremacy, the so called FAANG companies are still set to continue their market dominance says research from Ovum.

Ovum FAANG 6Nov2019The analyst calculates that Facebook, Apple, Amazon, Netflix and Google will account for 63% of global OTT subscription revenue this year, a total that it says will largely hold steady through 2023, when these companies will likely grab 60%.

In addition the research found that FAANG video services, predominantly Google’s YouTube and Facebook Video, will account for 43% of advertisement-based video on demand (AVOD) services in 2023, up from 39% in 2019.

“FAANGs include the most innovative, disruptive and largest companies ever to compete in entertainment distribution,” observed Ed Barton, chief analyst of Ovum’s consumer and entertainment team. “These companies have built dominant positions in the key growth segments of video distribution: OTT subscriptions and advertising. This situation is making life very hard for competing video services seeking to gain a foothold.”

The World Information Series –Service Provider (WIS-SP) research also showed that the next five years will see unprecedented competition with huge investments in OTT video technology, original and exclusive content and subscriber acquisition promotions which said Ovum will likely to accelerate declines in traditional pay-TV. Another effect will, said the analyst be life becoming unbearable for smaller video platforms that either cannot or will not sustain multi-year losses in order to survive.

“The FAANGs are feasting while entertainment giants prepare to lose billions of dollars establishing direct-to-consumer video platforms,” Barton added. “The entire OTT video industry is likely to be loss-making until the mid-2020s. The companies left standing in 2025 will have the opportunity to fashion the long-term future of visual entertainment distribution, but they will have paid a very high price.”