The Boston Consulting Group (BCG) has produced a report called “The Impact of OTT on Video Production Around the World” which shows that five global companies (including Google, Facebook and Netflix) capture 50% of the revenue, even though there are more than 500 providers globally. The group also believes that the global OTT market has added $25 billion in revenue to the video industry, representing ~5% of the ~$500 billion video business. In the US, the number of productions jumped to 400 from 200 in 2009.
In the US and Canada, production spending is growing at good rates of 7% and 5% respectively, while in non-English markets such as Germany and Sweden, growth is more muted at 1% and 3% respectively. Time shifting and binge watching have become big factors in market development. Producers in English-language markets around the world are benefiting the most from the shifts driven by OTT because content can travel across these countries. In Canada, for example, front-end co-production from foreign distributors is the biggest driver of content production increases, growing 14% per year from 2011 to 2015.
The other big factor is the growth of a huge content production ecosystem – BCG estimates that there are nearly 1 billion amateur and pro-am content creators with unimpeded consumer access.
Analyst Comment
Separately, Juniper Research said that it expects revenues from sVOD services to double from $14.6 billion in 2016 to $34.6 billion in 2021 and has pointed out that Netflix now has similar numbers of subscribers to DirectTV and Comcast in the US, which both have around 47 million. The company also said that UHD content will mean that the level of data delivered will go up by a factor of five over the next five years and that UltraHD VOD and pay content will be 13% of all OTT revenues by that time. Juniper believes that there will be more offers of ‘skinny bundles’ of content delivered over the internet. (BR)
