Revenue from OTT services is set to nearly double to $51.1 billion globally during the next five years, according to the latest Digital TV Research report, which covers 64 countries. That growth is largely being driven by SVOD services like Netflix (NASDAQ: NFLX), which are capturing subscribers at a faster pace than many industry analysts expected.
Digital TV Research's new report found that revenues from the OTT industry grew from just $4.2 billion in 2010 to a projected level of $26 billion by the end of 2015, with the U.S. being the dominant territory for this expansion. OTT revenues in the U.S. are expected to grow to $19.1 billion by 2020.
China's OTT market, meanwhile, is forecast to grow from just $40 million in 2010 to $2.8 billion by 2020.
SVOD will remain the largest generator of OTT revenue over the next five years, Digital TV Research said, generating $21.6 billion in 2020, up from $7.6 billion in 2014. The report predicts there will be 249 million SVOD-subscribing homes worldwide by 2020, up from a current level of 117 million.
"SVOD has developed even faster than we expected in our last edition a year ago," said Simon Murray, principal analyst at Digital TV Research. "Some of this growth was spurred by Netflix's aim to establish operations in 200 countries by end-2016. Not only has the launch of Netflix boosted each market, but the anticipation of its launch has galvanized local players into action--creating a whirlwind of promotional activity."
Indeed, Netflix in the first quarter of this year set another subscriber record, chalking up 4.9 million new members worldwide to bring its total to 62.3 million subs. The company's total revenues from streaming hit around $1.4 billion for the period, which Netflix predicted would rise to around $1.47 billion in the current quarter.
- read this Digital TV Research press release
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