The total over-the-top (OTT) video revenue in Europe was up 51 percent in 2013 reaching $3.2 billion and is expected to grow a further 43 percent this year.
Strategy Analytics predicts that the majority of this new growth will occur within the online subscription VOD (SVOD) and ad-supported video business models, lifting the market above $9.45 billion by year-end 2018.
The growth of OTT video suggests that the audience is shifting towards streaming rather than actual ownership of downloads or home videos on DVD and Blu-ray discs.
The success or failure of OTT video services is heavily dependent upon the quality of their content library. According to the Strategy Analytics assessment, the expansion of global players like Netflix across Europe has been slowed due to complex content rights negotiations
Broadband internet access and faster speeds, the proliferation of connected devices, and easy extensive online video catalogs are the key drivers in driving adoption of OTT video consumption.
Key findings from the Strategy Analytics market study include:
- Led by Netflix, SVOD revenues to experience strong growth. SVOD revenues grew by 133 percent last year and are expected to double again in 2014.
- Ad-supported video makes up over 60 percent of total OTT video revenue in Central & Eastern Europe, but will represent less than 50 percent of Western Europe OTT video revenue by year-end 2014.
- Average OTT video spend per broadband user in Western Europe is about four times that of those in Central & Eastern European.
- From a user perspective, the European online video market is reaching maturity but from a consumption, and even more importantly, monetization perspective OTT video is just beginning to grow