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Global OTT subscriptions will triple in five years: study

Connected televisions and the Asian market will be key factors in the global surge of OTT subscriptions, according to a new report from UK-based Juniper Research.
May 25, 2015

By Bree Rhody-Mantha

Mobile and online research firm Juniper Research predicts subscriptions to OTT services such as Netflix and Hulu will grow to 332.2 million in 2019, up from 92.1 million in 2014.

According to Juniper’s recent study, one of the biggest factors in the growth of OTT subscriptions is the availability, affordability and variety of devices connecting TVs to services including Chromecast, AppleTV and Amazon’s Fire. Juniper also predicts television sets will reign as the primary viewing screen for OTT content.

Sam Smith, analyst at Juniper, said in an email the information was gathered by looking at current and historical subscription data, as well as sales of supplementary TV devices.

“We believe demand for high-quality video delivery and viewing experiences will drive the uptake of large screen sizes, as well as the cost-effective methods of turning ‘dumb TVs’ smart via USB sticks and the like,” said Smith.

He also noted customers likely won’t stay loyal to just one OTT service. “As the market becomes more saturated, we will see consumers making more than one subscription per household.”

The research also concluded that ad dollars spent on VOD would nearly quadruple by 2019, with Asia dominating that market, and that IPTV subscriptions would grow by more than 70% by 2019.

The Hampshire, England-based company also concluded that while the North American OTT market will continue to lead globally in subscriptions, Asia will not be too far behind.

These findings come shortly after rumors began swirling that Netflix has set its sights on a Chinese expansion. However, Smith explained that due to various circumstances surrounding streaming in China, the country was not included in their forecasts.

However, even without data from China, Smith noted that South Korea and Japan would be major players in that growth.

“Japan and South Korea have some of the best broadband deployments in the world,” said Smith. 

Historically, OTT services have taken several years to break a profit in international markets (Netflix took about four years to break even on its move to Canada in 2011), but Smith said services have learned from previous mistakes when it comes to international expansion.

“We believe Netflix (has) delayed their expansion into Japan, whilst they were assessing the billing and payments mechanism,” said Smith. “(Hulu’s) expansion into South America resulted in much slower growth than anticipated, and this was largely due to the lack of billing infrastructure.”

Other analysts add that expansion is more of a grab for subscribers than just cash.

“The more international subscribers they have, even if they don’t turn a profit, gives them a bigger scale, which helps them to acquire more content, and so forth,” said Eric Jhonsa, a tech news analyst with the stock-market analysis site Seeking Alpha.

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