Over-the-top video providers are poised to generate $5.8 billion in revenues this year, representing a growing threat to traditional pay-TV models that’s just starting to get rolling, Infonetics Research said in a new forecast on the video marketplace.
OTT pay-TV revenues will eclipse $10 billion in 2018, Infonetics forecasted, noting that the global pay-TV market totaled $117 billion in the first half of 2014, up 3.9% from the first half of 2013.
So, OTT isn’t taking over the world yet, but it’s on a steep growth path.
"Subscription-based over-the-top (OTT) providers like Netflix, Hulu Plus, and Amazon have seen phenomenal growth over the last couple of years. With a combination of wide availability across end devices, user-friendly interfaces, and access to vast content libraries, these providers continue to challenge traditional pay-TV providers and are in the early stages of siphoning off revenue," Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research, said in a statement.
He also pointed out that OTT providers are encroaching onto the turf of traditional pay-TV players by integrating apps on leased set-tops, a move that gives them access to a larger pool of current pay-TV subscribers. In the U.S. several MSOs, including WideOpenWest, Suddenlink Communications, Grande Communications, Atlantic Broadband, and RCN, have already integrated Netflix with their leased STB platforms or have plans underway to do so.