The premium over-the-top video market is on-track to grow at a trajectory of 80% over the next three years, according to research commissioned by subscription billing firm Vindicia and video streaming platform provider Ooyala.
The research, which was carried out by UK consultancy MTM and focuses on the UK, Dutch and German OTT markets, claims there will be “rapid growth” in this space despite a number of barrier to entry.
The UK OTT market is expected to grow from £110-130 million in 2013 to £390 million in 2017. Over the same time period the Dutch market is expected to grow from €15-20 to €190 million, while Germany will increase from €30-35 million to €117 million, according to the research.
“The next three years will be a real turning point for the premium OTT market. Broadband penetration levels are rising, connected devices are becoming increasingly accessible and favourable regulations are being introduced, which is paving the way for OTT providers,” said Gene Hoffman, chief executive officer and chairman at Vindicia.
“The emergence of leading players, such as Netflix, is also fuelling competition and investment in premium OTT business models, while at the same time driving consumer awareness and adoption.”
In Germany, lower broadband penetration was named as a contributing factor to the region’s slower growth rate. Other named “barriers” were exclusivity of access to high-quality content, consumer consciousness and cultural factors.
“Exclusivity in particular is a primary battlefield for mass-market services, with content licensing costs inflating as large OTT businesses, including Netflix and Amazon, invest in long-term, exclusive and global studio licensing deals,” said the research.