Western European OTT revenues, subscribers to double by 2021

OTT TV and video revenues in Western Europe will more than double to $14.6 billion in 2021, up from $8.2 billion this year and $6.4 billion in 2015, a new study says. The United Kingdom is expected to maintain its market-leader position, adding $2.3 billion in new revenue between 2015 and 2021.

Subscription video on-demand services (SVOD) are expected to make up 38% of OTT revenues by 2021, some $5.6 billion, but ad-supported video services (AVOD), driven by strong growth in mobile, will make up about 40% of revenues, or $5.8 billion, according to the report, Western Europe OTT TV & Video Forecasts, from Digital TV Research (DTVR).

OTT growth in the region will vary considerable, said Simon Murray. DTVR analyst, with Germany ($1.34 billion of new revenue), France ($1.13 billion) and Italy ($990 million) following on the heels of the U.K.

“OTT adoption is already high in Scandinavia, the Netherlands and the UK, but it has been much more muted in other countries such as France, Spain and Portugal,” Murray said. In fact, he said, at the start of the next decade Sweden will have more SVOD subscribers than Spain, a country with 4X its population. DTVR is forecasting that the number of subscriptions in both France and Italy will quadruple between 2015 and 2021 and will grow eightfold in Spain.

How operators position their own SVOD plays is key

Part of the slow SVOD growth in Spain is due to Telefonica offering its Yomvi SVOD platform free to pay-TV subscribers and not offering it as a standalone service, something Murray believes degrades the perceived value of the other SVOD platforms.

In contrast, a trio of Canadian operators have launched standalone SVOD services that they believe helps reduce churn among existing customers and also provides incremental revenue streams that have the added benefit of introducing new subscribers to their traditional offerings.

Shaw Communications and Rogers Communications partner in the shomi SVOD service and Bell Media offers CraveTV, which it is expanding by offering it to other operators, too.

In Western Europe, nearly $1 billion in new SVOD revenues will be added in 2016 alone, with subscription revenues forecast to top $5.63 billion by 2021 – up from $2.1 billion in 2015.

The U.K. will add nearly $800 million between 2015 and 2021 to reach nearly $1.51 billion, remaining the biggest SVOD player in the region.

DTVR expects SVOD to increase its subscriber base in the region more than 70% to 53.7 million, up 8 million in 2016 alone. More than 30% of the region’s TV households will subscribe to a SVOD package by 2021 up from the nearly 14% that did in 2015.

AVOD will add $5.79 billion to OTT revenues

DTVR believes AVOD will continue to be a major piece of the OTT pie through the beginning of the decade, increasing some $2.4 billion to $5.79 billion by 2021. Again, the U.K. will be atop the market with AVOD revenues in 2021 of $2.33 billion, more than double Germany’s $904 million.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn