One of the coolest business models, which is quietly multiplying during the last 6 months all over the world is the OTT business. For those of you who don’t know… OTT business is the newest form of Video Sharing business and a part of the ever-growing Entertainment Industry. As per the recent report, the global over the top (OTT) streaming market is expected to grow from US $104.11 billion in 2019 to US $161.37 billion in 2020 at a compound annual growth rate (CAGR) of a whopping 55%. The unexpected growth is mainly due to worldwide lockdown caused by the pandemic as we know, the COVID-19 outbreak, during these tough times for most businesses but this is the time when subscription to various Over The Top streaming channels in various countries and viewerships has increased phenomenally. As many industry reports say and predicted by industry experts, the market is then expected to stabilize and reach $169.4 billion in 2023 at CAGR of 14.0% from 2021. This is one of the industries which got benefited by the pandemic after the medical industry.
The ever increasing transformation in customer’s social patterns which is shifting from traditional subscriptions to broadcasting services and to over-the-top (OTT) on-demand video and music subscriptions every year, will drive this video streaming market in the next couple of years at an unexpected pace. Most of the segments of the population have started using video streaming services instead of regular television for entertainment, due to added benefits such as on-demand services and ease of access. Initially, it was said that this is for the Upper class or the High-income group of people and now it has reached the lower class or the lower-income people as well with the operators who have come out with interesting subscription models.
As this trend started to rise, some of the countries which entered the OTT segment recently like India and China are expected to see an exponential rise in the number of content streaming users in video-streaming and pay per view services. As many of us know in March 2018, the OTT content streaming service, Netflix, announced its plans to add 100 million users from India to their existing 125-million base worldwide. The increase in the customer base will boost the growth of the OTT streaming market.
Even though this industry is booming, many of the existing players are trying to change their offerings to attract more customers as well as getting updated frequently, before someone comes and disrupts them easily. As we all know Digital transformation is happening in every industry so the Media industry is no exception. The OTT industry has not tapped some of the interesting industries fully such as gaming, education, medical, sports etc. Looks like the post COVID era will boost the Video Streaming industry further-reaching various new segments, devices and age groups. As this pandemic is still continuing and film production companies across the globe are trying to release their projects through various OTT platforms. COVID has become a catalyst for the transformation of the Media industry.
The Indian market is still new for the OTT platforms and many corporate and other industry leaders are exploring opportunities in this industry to take a pie out of it. All the OTT players are coming out with new features, packages, and content to attract the never satisfying customer base from various countries. With the increasing speed of the internet and the reducing price of cloud storage will be a catalyst for the growth of this OTT business.
The OTT business has sunk video businesses including the traditional pay-TV revenues (cable, satellite, and telco-based services) dropping 5% to $76 billion in 2024 (from $99 billion in 2019; Likewise it has affected the traditional Cinema hall business as well were theatrical box office businesses are down by 3% to $8 billion (from $11 billion in 2019); and home video, losing 6% to $4 billion from $9 billion. To be frank we have been watching movies since the early 1900s, television since the 1940s, and the digital streaming platforms since 2010 in India. While I’m sure 2019 was a momentous year for India for many reasons, but to our surprise that this one phenomenon that has possibly gone unnoticed is – a four-year-old industry overtaking a 100-year-old industry in market size.
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