Just based on the popularity of services like YouTube and Netflix (Nasdaq: NFLX), the online video market should be worth $37 billion by 2017, researchers at Informa Telecoms & Media have said.
While this seems like a lot of money for a space that is still nascent, Informa, in its "OTT Video Revenue Forecasts" report, says it will still only be about 8 percent of total TV and ad revenues in five years. That number could climb to 10 percent by the end of the decade, especially as a new breed of players like pay TV providers and a new group of connected devices become part of the viewing norm.
"It's clear that online video today is worth much more than the digital cents and dimes of yore and is attracting real and growing revenues," Giles Cottle, the report's author and a principal analyst at Informa, said in a news release.
Today's value, though is "concentrated around a few select players," he added, noting that "Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG), Netflix and the global broadcasters (including Hulu), combined, account for about 70 percent of all online video revenue today."
For those who aren't part of that group, "chances are you aren't making a great deal of money from online video delivery today," Cottle continued, noting that this is what will change and what will drive the market's growth as publishers and operators take their content to devices that extend beyond the PC, including tablets and connected TVs, and add live video content to the mix.
Pay TV operators, the report said, will also "have a key role to play" and "[t]he big change to the OTT revenue mix will come when operators start to offer not just low-cost online services, like Sky's Now TV, but standalone online versions of their services that come close, in terms of content availability and price, to their core pay TV services today," Cottle concluded. "Even very modest take-up of these services will completely distort the online video market."
- Informa Telecoms & Media issued this press release
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