Video services continue to skip ahead of revenue

CBT717 Video services continue to skip ahead of revenue

The global video media services market continues to accelerate with Gartner research forecasting spending will reachUS$314 billion in 2017.

The Asia Pacific  is poised to record the highest growth at 20.8 percent, with the Middle East and North Africa at 17.4 percent coming up next with big spending on video media services.

Meanwhile the report states that transactional video on demand (TVOD) which offers consumers the ability to access a wide variety of content, from either managed pay-TV providers or over-the-top (OTT) companies such as Amazon, Google or Apple is changing the landscape.

"OTT  VOD services are the fastest-growing segment in the VOD landscape and eroding pay-TV providers' share of revenue. OTT VOD sources began outperforming traditional pay-TV sources in 2016," said Derek O'Donnell, senior research analyst at Gartner.

Spending on TVOD content in mature regions, will grow from US$160 million dollar in 2017 to US$400 million dollar by 2020 due to the availability of premium-priced 4K content.

Meanwhile global spending on SVOD services is set to show double-digit increases over the next four years.  Global consumer spending on SVOD services will total US18.7 billion dollars in 2017, an increase of 28 percent from 2016.

The highest ARPUs are found in Japan ($12.10), Mature Asia Pacific ($10.84) and North America ($9.60).

"Consumers will not subscribe to more than three services," said  O'Donnell. "This is because of price and content discovery fatigue. Consumers are having to go through each application separately to find content, which can create fatigue."

The report found that universal search will be the key to driving further penetration, which will allow consumers to search for content across all their SVOD services. Yet this is some way away due to competitive pressure.

"Currently, there is a market for niche subscription video services and established streaming providers. However, as the market matures, we forecast more consolidation around the fewer companies that can innovate and set themselves apart from the juggernauts within the industry," concluded  O'Donnell.


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