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OTT Video: Ripe for Saturation?

Consumers are gravitating to over-the-top video services at alarming rates, but that ongoing acceleration could create a big challenge for the leading providers in the years ahead — finding ways to keep those growth fires stoked.

While increases in OTT adoption threaten to saturate the market, there may still be some room for growth for some of the entrenched players and new ones that are trying to break into the sector, eMarketer found in a new forecast, Q4 2015 State of Video: Monetization, Audience, Platforms and Content.

Driven by YouTube, about 72.1% of U.S. Internet subs, or 199.6 million of them, will use OTT video services by 2019, up from 69.7% and 181 million, respectively, at the end of 2015, the firm predicts.

Looking ahead, eMarketer said it believes YouTube will have 187.8 million users in the U.S. by 2019, up from 170.7 million at the end of 2014. Likewise, the firm predicts Netflix will have 143.0 million users in the U.S. by 2019, up from 114.3 million in 2015. By 2019, there will be 88.6 Amazon OTT users (versus 65.2 million this year), and 82.2 million Hulu users (up from 59.9 million in 2015).

Of that batch, Hulu’s expected to see the most user growth (4.3%) by 2019, followed by Amazon (4.1%), Netflix (2.6%) and YouTube (1.6%). By 2019, YouTube is expected to maintain its wide lead from a user penetration standpoint (94.1%).

“There is little if any room for YouTube to grow beyond this near saturation, but other leading services will undergo significant growth over the next several years,” eMarketer noted in the report.

Among other predictions, eMarketer said 89.3% of U.S. digital viewers will watch video via OTT, up from 88.6% in 2015.

Per the firm, game consoles currently lead the connected TV category over smart TVs and Blu-ray players, but their share will continue to erode as streaming sticks — led by Google’s Chromecast adapter — become the second-most pervasive connected-TV device.