Revenue generated globally by over-the-top services is on pace to surpass $200 billion by the end of 2023, according to new data published by global tech market advisory firm ABI Research.
This represents revenue growth of more than 50% over 2019, during which OTT companies generated $129.4 billion in revenue, 90% of which came from subscriptions and advertising, the research company said.
The projection culminates a decade of growth for the domestic streaming business. In 2013, ABI Research said the OTT market only generated about $12.2 billion in revenue.
Study author Michael Inouye, principal analyst at ABI Research, credits the growth to new market entrants like Disney+ and Apple TV+, as well as “aggressive pricing and packaging, and continue expansion of incumbents pushing the subscription video on demand (SVOD) market to new heights.”
Growth in the Asia-Pacific region, specifically China, is also listed a factor, as is the expansion of new access technologies like 5G.
"Cord-cutting is often regarded as a consequence of expanding OTT consumption, but the market dynamics are more complex, particularly when one considers how the pay TV industry has embraced OTT as a complement and value-additive, rather than strict competition,” Inouye said in a statement. Over time, we expect the traditional pay TV offer to continue to evolve and become indistinguishable from a pure OTT package of services.”
The study also noted that even with over 700 million OTT SVOD subscriptions in 2019, the pay TV market, with over 1 billion subscriptions worldwide, is still larger.
And, while pay TV growth rates are slower (and declining in North America), the overall market is still expanding.
"Increasingly, we're seeing more solutions and conversations about bringing content and services together,” Inouye added. “This includes pay TV and OTT bundles and extends to cross-platform advertising, analytics, and customer/service management. Ultimately it makes the market more accessible to a wider range of companies and expands the potential video touchpoints, particularly as new technologies like 5G, smart home, and Augmented/Virtual Reality play larger roles.”
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