Over the Top Market

Over the Top Market Overview & Report Summary, Global Size

The global Over The Top Market size was worth approximately $202.5 billion in 2022 and is expected to generate revenue around $434.5 billion by the end of 2027, projecting a CAGR of 16.5% during 2022-2027.

Rise in demand of OTT during lockdown, global and local players offering freemium models in price-sensitive markets, internet proliferation with penetration of smart devices, and flexibility and ease-of-use to offer seamless customer experience are major factors for the over the top market growth.

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Over the Top Market Growth Dynamics

Driver: Flexibility and ease-of-use to offer seamless customer experience

Viewership dynamics have changed the way consumers watch videos and consume television content. There is a drift from traditional TV viewership to online content consumption, which acts as a major driver in the growth of Over the top players. Home entertainment has made its way via streaming services, enabling customers to consume the offered content depending on their preferred choice of genre, comfort, freedom, and flexibility. Viewers are further provided with a plethora of choices, with titles from diverse genres within the vast library to choose from at any given time. Owing to this ease of use and flexibility, viewers can have a seamless experience

Restraint: Disparity in opinion between producers and aggregators over licensed business model

Streaming licensed content can act as a major revenue contributor and as a major restraint for players in the Over the top Market. This is due to the presence of the same licensed content across competitive platforms. In terms of global players, the license fee paid to the foreign licensor would be considered royalty and the OTT service providers would have to comply with regional tax regulations while making payments to content producers or aggregators. The definition of royalty between artists and OTT players over content withholds the production of original content.

Opportunity: Partnership with national producers and film studios across regions on SVoD models

OTT players focus on generating content that is original and local, which is based on the concerned region to drive their Over the top Market growth. These players partner with national producers and directors for such content production. The main aim of such partnerships is to explore untapped markets to reach the unreached audience that is unable to consume content owing to language barriers. National producers and film studios are aware of the grip of viewers’ and their consuming patterns, creating an opportunity for the major Subscription VoD (SVoD) players to penetrate the market and increase the number of viewers and subscribers.

Challenge: Difficulty in retaining subscribers due to high competition

With many OTT services available to users, it is a challenge to attract new subscribers and, further, to retain them. Introductory offers are usually free for the customers or are at a reduced rate. Subscribers can opt for a free trial and then opt out when it ends; meanwhile, the lack of new content drives away subscribers, and the complex user interface can push customers to unsubscribe from the service. To prevent this, many service providers focus on creating high-quality content and a smooth user experience. Also, in the initial phase of using the OTT service, the content is original and new. However, after the content fails to justify the full price of the subscription, the viewers are able to unsubscribe from the service. There is also an emergence of free, ad-supported alternatives, creating immense competition for premium service providers.

Gaming service vertical to hold the largest market size during the forecast period

Online gaming companies need to reach out to a large number of global customers, avoiding the presence of limitations across the entire gaming experience. These companies aim at delivering a fast and secured online gaming experience, offering a rich media experience, and tracking the record of users that use various gaming applications. The consistent engagement of end users in the gaming sector enables companies to make notable developments across the segment in terms of High Quality (HQ) delivery over handheld devices, such as smartphones and tablets

Smartphones and tablets in gaming service vertical segment to record the fastest growth rate during the forecast period

Game streaming end users are mainly young viewers who aim for ease of accessibility of the content. Smartphones and tablets provide anytime and anywhere access to game streaming and therefore, these devices are expected to record the fastest growth rate during the forecast period. The streamers can record videos and live streams in impressive HD quality without the need of large equipment or a specific setup, saving money and time. Smartphones and tablets have dedicated apps for game streaming depending upon the operating system i.e. Android or iOS. Also, the upcoming 5G technology which can be accessed over these devices will help to increase the adoption rate of OTT services in the gaming service vertical.

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North America to hold the largest market size during the forecast period

North America consists of developed countries with well-established infrastructure, which generate a huge demand for OTT solutions in the region. Countries that contribute the most to the Over the top Market in North America are the US and Canada; the reason for the dominance of these countries is their well-established economies, which enable investments in new technologies. North America, the most developed region, is home to large verticals capable of investing in reliable and advanced IT infrastructure for growing data traffic, thereby opening new opportunities for adopting OTT solutions.

Key Market Players:

Key market players profiled in the Over the top Market report are Meta (US), Netflix (US), Amazon (US), Google (US), Apple (US), Home Box Office (US), Roku (US), Rakuten(Japan), IndieFlix (US), Tencent (China), and Kakao (South Korea).

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Scope of the Report

This research report categorizes the Over the Top (OTT) Market to forecast revenues and analyze trends in each of the following submarkets:

Based on type component: Type

• Game Streaming
• Audio Streaming
• Video Streaming
• Communication

Based on streaming devices: Streaming Devices

• Smartphones and Tablets
• Desktops and Laptops
• IPTV and Consoles

Based on monetization model: Monetization Model

• Subscription-based
• Advertising-based
• Transaction-based

Based on service verticals:

• Media and Entertainment
• Education and Learning
• Gaming
• Service Utilities

Based on region:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Nordic Region
  • Rest of Europe
• APAC
  • China
  • India
  • Japan
  • Australia and New Zealand
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • Kingdom of Saudi Arabia
  • United Arab Emirates
  • South Africa
  • Middle East & Africa

Recent Developments:

• In October 2021, Netflix made its biggest acquisition by buying Roald Dahl Story Co. The acquisition would build on the partnership to create a slate of animated TV series. The projects under these would promote more ambitious ventures of creating a unique universe across animated and live-action films and TV, publishing, games, immersive experiences, live theatre, consumer products, and more.
• In June 2022, Amazon partnered with American entertainment company AMC Networks to offer its content on Amazon Prime Video channels in India. As part of the partnership, Amazon Prime Video would offer ad-free subscription service AMC+ and AMC’s streaming service Acorn TV on Prime Video channels in India on a subscription basis.
• In April 2020, Synamedia, one of the world’s largest independent video software providers, partnered with Google Cloud to expand its video network portfolio with new over-the-top (OTT) offerings ‘as a service.’ With this partnership, Synamedia would be able to further address customer needs for high availability, increased scalability and maximized performance for OTT services while simultaneously reducing operational costs and complexity, particularly with live sports events. The tech innovators came together to maximize OTT service uptime and achieve broadcast quality latency.
• In May 2022, Mattel, Inc. announced a partnership with HBO Max on a pair of new live-action American Girl specials based on the hit doll and book line. The first special, American Girl: Corinne Tan (wt), focused on the brand’s 2022 Girl of the Year of the same name. Produced by MarVista Entertainment, a Fox Entertainment Company, American Girl: Corinne Tan would premiere in December on Cartoon Network and the following day on HBO Max. A second American Girl special would follow in 2023.
• In April 2021, The Walt Disney Company (DIS) and Sony Pictures Entertainment (SPE) announced a multi-year content licensing agreement for US streaming and TV rights to Sony Pictures’ new theatrical releases across Disney Media & Entertainment Distribution’s vast portfolio of platforms, including its streaming services Disney+ and Hulu, as well as linear entertainment networks including ABC, Disney Channels, Freeform, FX, and National Geographic. The deal covers theatrical releases from 2022 to 2026 and begins for each film following its Pay 1 TV window.
• In November 2022, AMC Networks and Roku announced an expanded partnership to feature AMC Networks’ high-quality content and targeted streaming services across The Roku Channel’s broad and growing ecosystem. The agreement included the addition of 11 free ad-supported streaming (FAST) channels created and programmed by AMC Networks to The Roku Channel, including an exclusive channel, AMC Showcase, which would feature many of AMC’s signature dramas, including Mad Men.
• In December 2021, Tencent partnered with Shiseido to build a D2C (Direct to Consumer) model and strengthen its social commerce business to provide new services to Chinese consumers globally. Applying the know-how learned from this partnership to the entire Shiseido group, the company would strengthen its global growth by accelerating its group-wide digital transformation and enhancing capability development in terms of digitalization.
• In September 2021, Amagi, a global leader in cloud-based SaaS technology for broadcast and connected TV, strengthens its partnership with Rakuten TV, one of the leading video-on-demand (VoD) platforms in Europe, for channel distribution and monetization. Rakuten TV was the first Video on Demand platform in Europe that combined transactional video-on-demand (TVoD), advertising video-on-demand (AVoD), Free Ad-Supported Streaming TV (FAST), and subscription video-on-demand (SVoD) services. For Rakuten TV, Amagi delivers a lineup of nearly 50 third-party linear channels, working alongside Rakuten TV’s primary monetization partner Rakuten Advertising. These included BITE, Bon Appétit, Brat TV, IMG EDGEsport, Insight TV, PopSugar Fitness, Qwest TV, Talk Radio TV, and XITE.

Frequently Asked Questions (FAQ):

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