Over-the-top (OTT) revenue will quadruple to $32 billion by 2017, up from the expected $8.2 billion in 2012, according to a new report from ABI Research.
Although subscription services such as Netflix have led the OTT markets for the past couple of years and helped propel the market, by 2014 the research firm expects OTT rentals to surpass subscription revenues.
“Connected CE and mobile devices continue to push consumer behavior toward newer forms of media distribution like OTT and multiscreen services,” said ABI Research practice director Sam Rosen.
Advertising also is expected to gain strength as the OTT market attracts ad dollars. Connected consumer electronics and mobile/portable devices are giving consumers touchpoints and enabling new ways to connect or interact with consumers.
“Although many consumers today claim to use mobile and portable devices while watching TV, most of us are in actuality poor at multitasking,” said senior analyst Michael Inouye. “In many cases, this means consumers are more acutely aware about the content on their portable device than the TV. Although second-screen advertising is not necessarily OTT content, it does speak to the importance of targeting these connected devices that extend the reach of content beyond the TV.”