The global ‘over-the-top’ video market will grow from $22.6bn in 2018 to $30.6bn in 2022, according to the latest prediction from PricewaterhouseCoopers.
Its Global Entertainment and Media Outlook 2018-2022 report suggests that 79.6% of OTT revenues – over-the-top means video delivered outside the traditional cable/satellite/terrestrial broadcasting networks – last year came from subscription video-on-demand (SVOD) services like Netflix, Hulu and Amazon.
“Investment in original content, exclusive programming and marketing means this trend is set to grow, with the SVOD segment accounting for 81.6% of the total in 2022,” reckons PwC. “The challenge for OTT providers is to balance the high costs of original content production with pricing that continues to attract subscribers without squeezing margins.”
One interesting point though: the report suggests that cable and broadcast networks won’t see their advertising revenues fall just yet as a result of these trends: PwC predicts that cable networks’ ad revenues will grow by 2% to $21.5bn in 2018, then to $22.7bn by 2022, while broadcast networks will grow by 1.6% this year to $18.6bn, then to $20.4bn by 2022.