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ABI: OTT video market to reach US$51bn in 2022

The worldwide over-the-top (OTT) video market is due to increase at a compound annual growth rate (CAGR) of 10% to generate revenues of US$51.4 billion in 2022, according to ABI Research.

The report predicts global OTT subscriber numbers will reach 400 million in 2018 and said that growth in this sector is driving changing trends in the pay TV landscape.

In North America and Europe, in particular, pay TV operators have started to offer OTT-delivered Virtual Multichannel Video Programming Distributor (vMVPD) services, such as DirecTV Now, Dish Network’s Sling TV and Sky’s Now TV.

“vMVPD services offer live TV packages as low as US$10 and customised packages are attracting cost-sensitive customers,” said Khin Sandi Lynn, industry analyst at ABI Research.

“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 predicted that OTT video services will put more pressure on traditional pay TV services, especially in the developed markets with high broadband and pay TV penetration.

“As competition intensifies, content and quality of service are crucial to win the OTT war,” said Lynn, noting further rivalry in the US vMVPD market from players like Hulu and YouTube.