Think the world’s OTT market has hit its peak? Think again. A new report forecasts Global OTT revenue from TV episodes and movies will grow more than 98% by 2026. Globally, OTT revenue is expected to pass $210 billion in 2026, an increase of $104 billion from the $106 billion in revenue seen globally in 2020.
Digital TV Research, in its Global OTT TV and Video Forecasts report, said it expects more than 22% of that growth – $23 billion – will occur in 2021 alone.
Most of the growth will come from the “Big 5” OTT economies, the United States, China, the United Kingdom, Japan, and Germany. China, the world’s second-largest OTT market is expected to see the smallest growth among the top five markets, 54%. Here’s the forecast 2026 revenues for the five leaders and the change over that period:
- US OTT revenue: $88.27 billion (+$42.25 billion, or 92%)
- China OTT revenue: $25.85 billion (+$8.38 billion, or 54%)
- UK OTT revenue: $9.92 billion (+$4.41 billion, or 80%)
- Japan OTT revenue: $9.19 billion (+$4.54 billion, or 97%)
- Germany OTT revenue: $7.36 billion (+$3.72 billion, or 102%)
Global OTT revenue growth will accelerate most in smaller markets
While the US is expected to see the largest growth in terms of overall dollars, the second biggest growth is expected to come from the 133 “other” countries in the study, none of them with revenues in 2026 expected to top German’s $7.36 billion. Those countries are expected to reach a combined $71.71 billion in revenues by 2026, a $40.52 billion increase from 2020. India, meanwhile, is forecast to see revenues increase by $4.7 billion by 2026, growing more than 3X to $6.7 billion.
That’s among the biggest changes we’ll see over the next 5 years.
“Others” currently have just 7% more revenues than China, UK, Japan and Germany. By 2021, the figure increases to 21% and jumps to more than 43% in 2026.
That doesn’t mean China, or the UK, or Japan, or Germany’s OTT revenue growth is slowing down, but rather that the rest of the world (ROW) is accelerating. Even against the US. Revenues in ROW in 2020 were 68% of those in the US. By 2026, they grow to 81% of the US total.
SVOD, AVOD and consumer choice
We’ve seen a surge of growth in revenues in the ad-supported video on-demand segment, and that growth will continue through 2026.
AVOD revenues will increase by $39 billion between 2020 and 2026 to $66 billion, a jump of more than 144%.
Subscriber-supported video services, meanwhile, will see amore sizeable increase – in terms of revenue – of $59 billion between 2020 and 2026 to $126 billion, an increase of 88%.
AVOD will close the gap on SVOD income, making up 32% of the total OTT market by 2026, up from 26% today.
But it’s far to early to predict a decline, or even a pause in SVOD expansion.
The bottom line
“Saturation” is a word you’ll hear tossed around by some pundits who contend the SVOD market has hit a wall, or that the iteration of ad-supported services and hybrid services have given consumers too many services from which to choose.
The reality is, as my friend Simon Murray, principal analyst at Digital TV Research points out, the OTT market isn’t a mature one – there’s plenty of room for growth. Even in the US, the “grand daddy” of the OTT space.
The key, of course, is differentiating your service, of filling the content vacuums that continue to exist or by bringing content into the market that’s simply better than that already there.
Part of that differentiation also has to be your technology. Being able to reliably – and securely – deliver your product to your customers is as basic as business gets. And it’s something that too often is overlooked in the race to get a service launched.
Take care, do your market (and vendor) research, and launch when the time is right (which really is now).
Stay tuned and stay well.