Global spending on consumer video media services will total $314 billion in 2017, seeing a 4.2 percent increase from 2016, according to the latest research by Gartner.
Pay-TV services will be the largest spending segment, which are on track to represent 90 percent of the total market, totalling $282 million in 2017.
In 2017, emerging Middle East and North Africa markets, which represent 17.4 percent of the global share, are forecast to record the highest growth in end-user spending on consumer video media services.
Transactional video on demand (T-VOD) 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.
“OTT-VOD sources are changing the landscape,” said Derek O’Donnell, senior research analyst at Gartner. “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.”
O’Donnell added that the availability of premium-priced 4K content will increase end-user spending on T-VOD content in mature regions, from $160 million in 2017 to $400 million by 2020.
In emerging regions, increased competition in the T-VOD marketplace from unmanaged providers and increased threats of piracy will put negative pressure on T-VOD prices. End-user spending on T-VOD services in emerging markets will decrease gradually each year, starting in 2017, by about $60 million to almost $445 million by 2020.
“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.
