Netflix to help OTT revenues almost double in next five years

Global over-the-top (OTT) TV and video revenues are set to almost double in the next five years, from US$26 billion (€23 billion) in 2015 to US$51.1 billion in 2020, according to new research.

Digital TV Research’s ‘Global OTT TV and Video Forecasts’ report claims that subscription video-on-demand (SVOD) revenues, spurred by firms like Netflix, will become the largest source of revenue in 2020, overtaking OTT advertising.

SVOD revenues will climb from just US$1.0 billion in 2010 to US$21.6 billion in 2020, according to the research, with the US market account for US$6.5 billion of these revenues.

“SVOD has developed even faster than we expected in our last edition a year ago. Some of this growth was spurred by Netflix’s aim to establish operations in 200 countries by end- 2016,” said Digital TV Research’s principal analyst, Simon Murray.

“Not only has the launch of Netflix boosted each market, but the anticipation of its launch has galvanised local players into action – creating a whirlwind of promotional activity.”

The research predicts Netflix’s global paying subscriber-base will reach 69.9 million by the end of the year – with 43.54 million subscribers in the US and 26.36 million internationally. Announcing its Q1 results in April, Netflix said it ended the quarter with 62.3 million global streaming members.

Overall, in the ten years from 2010, Digital TV Research tips total OTT revenues to increase more than 12-times over, having stood at just US$4.2 billion five years ago.

The US is expected to remain the “dominant territory” accounting for US$19.1 billion of OTT revenues in 2020, while China will climb to fourth place with OTT revenues of US$2.8 billion. A total of 11 countries are expected to have OTT revenues in excess of US$1 billion by 2020.