Connected CE devices in the home will account for 27 percent of all OTT video transactions in 2016, up from 6 percent last year, according to a new study from IMS Research.
The study, “Over-the-Top Video – Service Delivery & Business Models – 2011 edition,” finds that a key driver in this growth is the geographic expansion of OTT services, such as those from Netflix and Amazon.
“Netflix’s aggressive pursuit of increasing the geographic reach of its OTT service illustrates the need for OTT service providers to expand their serviceable target market if they want to grow revenues,” says Anna Hunt, who authored the study.
“OTT service providers will need to be flexible with their strategies once they expand into new markets, considering market dynamics such as broadband availability, competition and content licensing,” she adds.
IMS Research forecasts that by the end of 2016, more than 133 million TV households worldwide will be accessing OTT content via their pay-TV set-top box.
The Latin American market, for example, is ripe for growth in digital and OTT entertainment services, according to IMS Research. Although Internet bandwidth and quality of service limitations are still an issue in many Latin American territories, especially outside major metropolitan areas, penetration of connected CE devices and PCs is growing rapidly. IMS Research forecast a compounded annual growth rate of 88 percent in OTT transactions via connected in-home CE devices in Latin America from 2011 to 2016.