Over The Top (OTT) Services Market Size, Share & COVID-19 Impact Analysis, By OTT Service (Online Services, and Managed Services), By Type (OTT Communication services, OTT Media services, and OTT Applications services), By Platform (Smartphones, Smart TVs, Laptops Desktops & Tablets, and Others), and Regional Forecast, 2021-2028

The over the top services market size was USD 38.77 billion in 2020 and is projected to grow from USD 44.54 billion in 2021 to USD 139.00 billion in 2028 at a CAGR of 17.7% in the 2021-2028 period.

The global impact of COVID-19 has been unprecedented and staggering, with OTT services witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a significant growth of 13.9% in 2020 as compared to the average year-on-year growth during 2017-2019. The change in CAGR is attributable to this market’s demand and growth rate, returning to pre-pandemic levels once the pandemic is over.

Over the top services are the media and communication services to users over the internet connection. The growing internet penetration, smart TV, smartphone, 5G infrastructure, original media content, and more are set to boost the market opportunities. The surging adoption of internet-based communication applications is likely to fuel market growth. Similarly, a significant rise in the demand for online streaming content, such as movies, live news, and sports, among others, is expected to boost the market. For instance, in January 2021, Firstlight Media collaborated with the over the top service provider Struum to deploy a cloud-native streaming platform. This collaboration focused on offering multiple platforms’ content using a single Struum subscription.

COVID Impact

Lockdown Pushed High Consumption of OTT Media amid COVID-19 Pandemic

The temporary shutdown of multiplexes, box-office, and entertainment zones dramatically pushed the demand for over the top streaming platforms. The video-on-demand online services witnessed flux in the number of subscribers during the lockdown period worldwide. For instance, as per India Brand Equity Foundation, the paid subscription of video platforms grew by 31% in just four months in 2020. The drastic spike in viewership would fuel the OTT services market growth amid the COVID-19 pandemic.

Further, providers such as Netflix, Inc., Amazon Inc., Disney+, and HBO, among others, witnessed significant growth during and post lockdown. The availability of high-quality pictures through smartphones, smart TVs, and upgraded internet infrastructure helped these providers in maintaining high viewership post lockdown. For instance, as per the Parks Associates report, the viewership of two or more over the top services jumped to 61% in 2020 in the U.S. as compared to 45% in 2019.  Thus, the year 2020 witnessed a sudden spike in market growth, and it is expected to witness significant growth during the post-pandemic phase.

LATEST TRENDS

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Swiftly Growing Demand for Smart TV to Fuel Market Opportunities

The demand for smart TV is growing sharply across the globe owing to their possession of a wide range of features and functions. The high penetration of the internet facility and infrastructure is expected to boost the sales of smart TV in the future.  Also, considering the remarkable demand, manufacturers are introducing new and innovative smart TV models to uplift the consumer experience. For instance,

• In April 2021, Samsung Electronics, in collaboration with MediaTek, launched a Wi-Fi 6E and 8K TV-enabled smart TV.


• In April 2021, Xiaomi launched its premium smart TV in India, catering to the growing sales and demand for the same in the country.


• In June 2021, Roku Inc. and TCL Electronics together launched their smart TV model in the U.K., offering streaming channels, voice control assistance, enhanced picture quality, and more.

This remarkable demand for smart TV is expected to directly boost the adoption of online streaming services. Also, as the smart TV becomes advanced with the impressive 5G connectivity in upcoming years, the demand for more live and original content is likely to grow. Thus, the on-set of smart TV demand to surge these services in the future.

DRIVING FACTORS

Rapidly Increasing Over the top Platforms is Likely to Drive Market Growth

The growing online media and entertainment market is attracting new local and international players. These new players are emerging from different traditional media services, such as broadcasters, rights holders, network providers, connectivity providers, electronic device providers, and many more. The new providers are bypassing the traditional cable and pay-TV solution and are offering subscription-based content streaming services. Providers such as NBCUniversal Media, LLC are introducing a dedicated streaming platform for original content and live streaming. Similarly, rights holder providers such as Disney+, HBO, and others are reserving their original content for their own platform. These growing new platform launches are expected to drive the over the top services market share. For instance,

• In April 2021, ScreenHits TV, a content and platform aggregator of Netflix, Amazon Prime, and others, launched the first over the top application for tablets and smart TV.


• In January 2020, British Olympic Association and British Paralympic Association collaborated with the U.K. Sport to launch GB Sports Media, an Over the Top broadcast platform.


• In April 2021, the Fun Asia Network launched Big Fan TV, an OTT platform, the first free South Asian OTT service delivering the largest libraries with content in multiple languages.


• In March 2020, Viacom18 launched Voot Select, a subscription-based VOD service in India.

Thus, the new entries in the Over the Top platform market are expected to boost the market opportunities in the near future.

RESTRAINING FACTORS

High Subscription Rate Might Impact the Market Growth

Over the Top service providers have different subscription packages and deals to access the content. However, to have access to various platforms, the user is required to avail of all the platform services with an individual subscription cost. This increases the overall spending on the platform. With the rapid launches of new Over the Top platforms, users are shifting rapidly on each platform to view unique offers. Also, higher prices and low-quality content are resulting in subscription cancellations. For instance, as per Zemoga Survey, 55% of the U.K. and 64% of U.S. loyal subscribers were bound to the platform for quality content. However, 38% of Americans canceled one of the services owing to the price and original content. This is expected to hinder the market growth.

SEGMENTATION

By OTT Services Analysis

Increasing Demand for Online Content to Fuel Growth of This Segment

Based on services, the market is segmented into online services and managed services. The managed services refer to a service network, where service providers have major control over the network capacity to provide services, whereas online service depends on the public internet for the delivery of content. The managed services segment is likely to witness steady growth in the upcoming years owing to the availability of high-speed internet and the proliferation of electronic devices.

Online services are expected to upsurge the market growth in the upcoming years. The proliferation of smartphones, the increasing broadband penetration, and the increasing online original content are some of the prime factors that would drive the adoption of online OTT services. Also, huge investments by market players such as Netflix, Inc., Amazon.com, Inc., and others in network infrastructure and content providers are likely to contribute to the growth of online services.

By Type Analysis

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Growing Demand for Live-streaming to Boost Media Services Segment

Based on type, the market is categorized into OTT communication services, media services, and applications services. The OTT media services segment is expected to dominate in terms of share with a remarkable growth during the forecast period. The growing number of platforms offering live-streaming such as concerts, sports, online gaming, and music streaming, among others, along with the video-on-demand services, is likely to fuel the demand for media services. The prominent presence of video service providers such as Netflix, Amazon, Apple, Disney+, and HBO Max, among others, is expected to boost the market opportunities. For instance, by January 2020, key providers Netflix and Amazon Prime Video registered 158.3 million and 101 million subscribers globally. This is expected to surge the demand for Over the Top media services in the future.

The communication services segment is expected to gain significant growth during the forecast period. The advent of instant messaging services such as WhatsApp and i-message has led to a drastic shift from conventional messaging services to services. Similarly, the growing digital economy and telecom providers' interest in the OTT industry is likely to drive the communication services segment.

By Platform Analysis

Increasing 5G Capability to Boost Smartphone Adoption and Propel This Segment

Based on the platform, the market is categorized into smartphones, smart TVs, laptops and tablets, and others. The smartphone segment is expected to dominate the market owing to the increasing 5G capabilities and new launches of smartphones. As per the GSMA Mobile Economy Report, smartphones registered 65% of adoption in 2019 globally. This is likely to drive the demand for these services. Similarly, the increasing adoption of laptops and tablets for accessing online content is anticipated to boost this segment’s share. Also, various services providers are offering direct streaming on laptops and tablets, which, in turn, is driving its demand in the market.

The emergence of smart TV is likely to fuel the market growth during the forecast period. Various electronic device providers are offering new and advanced smart TV capabilities. Companies such as Oppo, Samsung Electronics, Sony Corporation, Realme, Nokia, and others are investing in offering new smart TVs. This is expected to surge the over the market opportunities.

REGIONAL INSIGHTS

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Geographically, the market is fragmented into five major regions such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

North America dominated the global over the top market with a share of 41.09% in 2020. The growing substantial funds and investment in the content creation sector are constantly pushing the market growth. For instance, as per the Telecom Advisory Services LLC, Amazon.com, Inc. and Netflix, Inc. were expected to invest in TV shows and film programming in 2019. The U.S. is set to dominate the North America market share. The newly entered platform providers in the U.S., such as Peacock, Disney+, Quibi, Apple TV, HBO Max, and others, are driving the market growth in the region.

Asia Pacific is expected to gain exponential growth during the forecast period. As per Capgemini’s OTT Study Report, the region has outnumbered the subscribers' list than the U.S. The significantly mature Telco and broadcaster sector is likely to drive the market growth. China is expected to dominate the region owing to the rapidly cannibalized pay-TV segment. India is set to experience the remarkable expansion of platforms. This is likely to fuel the growth opportunities in the region.

Europe is expected to showcase significant growth during the forecast period owing to emerging local joint ventures such as salto, Joyn, BritBox, lovesTV, and more. Broadcast media in Europe is also significantly implementing streaming options in countries such as Germany, Spain, and France. This is expected to increase the market expansion in the region.

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The Middle East and Africa (MEA) are projected to have steady growth during the forecast period. Some of the local players are taking initiatives towards developing OTT services. For instance, Showmax, a South African OTT platform launched in 2015, is operating in around 70 countries and is a leading producer of African-based content. This generates new market opportunities for key players. Similarly, Latin America is expected to witness steady growth owing to the increasing Over the Top service providers in the region. Brazil is likely to be the second-largest market for over the top services in Latin America, followed by Mexico.

KEY INDUSTRY PLAYERS

Strategic Partnership to Offer New Opportunities to Key Players for Market Expansion

Key players in the market are strategically collaborating with telecom providers, content providers, streaming partners, and more to expand the market reach. These players, through collaboration and partnership with local services providers, are expanding their businesses. These market players are also investing in launching new streaming services and platforms. Acquisitions are also one of the major growth strategies of leading market players.

April 2021 – Apple Inc. announced its partnership with the top wireless carrier of South Korea, SK Telecom Co., for online video streaming through Apple TV+.  

February 2020 – The Walt Disney Company collaborated with India’s HotStar services to launch streaming services. The company with the Disney+Hotstar partnership is aiming to increase its competition with Amazon Prime and Netflix.  

LIST OF KEY COMPANIES PROFILED:

• Amazon.com, Inc. (Washington, United States)


• Netflix, Inc. (California, United States)


• Hulu, LLC (California, United States)


• Google LLC (California, United States)


• Apple, Inc. (California, United States)


• Facebook, Inc. (California, United States)


• Telstra Corporation Ltd. (Melbourne, Australia)


• Rakuten, Inc. (Tokyo, Japan)


• Roku, Inc. (California, United States)


• Kakao Corp. (Jeju-si, South Korea)


• Vimeo Live (New York, United States)


• The Walt Disney Company (California, United States)


• Sling TV (Colorado, United States)


• AT&T TV (WarnerMedia HBO) (California, United States)

KEY INDUSTRY DEVELOPMENTS:

• May 2021 – Amazon, Inc. announced the launch of miniTV, a free video streaming app. Through this strategy, the company is moving towards mass customer acquisition, along with various services such as e-commerce, payment, food delivery, and more.  


• March 2020 – AT&T TV launched its OTT service with add-ons such as the on-demand library, live channels, and 500 hours of cloud storage, among others, to expand its global reach. Its live TV package is streaming content from HBO Max, Disney+, Netflix, and others.  

REPORT COVERAGE

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The global over the top services market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, it provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

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