The size of the global Over-The-Top (OTT) devices and services market was estimated at USD 35.22 billion in 2016. The growing adoption of OTT content across the world is being enabled by the increased affordability and expansion of personalized experience given to the customer.
The online communications platform is expanding with new innovative technologies and is enhancing personalized experiences. Companies operating in broadcast and digital media sectors worldwide are increasingly innovating new technologies to generate fresh revenue streams by shifting to online platforms that permit the downloading of content, such as music and films.
Germany OTT devices and services market, by content, 2014 - 2025 (USD Billion)
With the introduction of device-based computing, customers are now able to upload their data on the cloud, which can be easily accessed from various portable as well as stationary devices. This enables users to upload data and save photos on the cloud. Contemporary OTT services are now being widely used across various sectors, such as e-health, e-commerce, digital economy, and smart grids.
An emerging trend in the industry is the use of omni-channels that enables retailers to provide better shopping experiences through various retail channels, such as mobile internet, TV, direct mail, and catalogs. In addition to this, retailers are now able to easily operate internationally through the internet, thus eliminating the need to comply with various taxation laws present in different nations.
Initially, OTT service providers across the world adopted a penetration pricing strategy for customer acquisition by providing their offerings for free. This model has reached maturity, wherein the service providers have begun charging customers for their services, thereby building a sustainable revenue-generating model.
Telecom operators worldwide are now increasingly seeking to form strategic alliances and partnerships with OTT service providers to enhance their position in the market and extend their market reach, thereby providing enhanced customer experience and an improved service.
The political and legal environment is a vital aspect of the industry, as it plays a part in either banning or allowing operators to provide these facilities. Many countries, such as the UAE, have imposed a restriction on Voice over IP (VoIP) services across the region due to legal intercept issues. In fact, legal regulations for the approval and licensing of the internet television service possess a significant barrier as only a limited number of operators are allowed to broadcast content on the internet.
The three primary content types analyzed in the report include VoIP, text & images, and video. An emerging trend influencing the Over-The-Top content industry includes the integration of OTT voice with various other platforms such as websites, social media, and other applications.
The proliferation of broadcast technologies has led to the development of new and innovative products in different categories. Traditionally, set-top boxes were used as video streaming devices to deliver streaming videos and internet to the TV. However, plug-and-play video streaming devices, such as Google Chromecast, Roku Streaming Stick, and Amazon Fire TV, have already paved their way into the markets.
The increasing usage of YouTube is driving the growth of Over-The-Top services. The market is developing at a rapid pace by providing a new platform and personalized experience to customers. Moreover, Over-The-Top services are expected to gradually become affordable with cheaper smartphones and extended broadband availability.
The adoption of text-based communication by consumers is rapidly increasing with the rise of OTT. The various alternatives to the technology include OS-specific communication systems such as Blackberry Messenger and iMessage, as well as third-party applications such as Kakao Talk and WhatsApp.
Revenue Source Insights
The primary revenue source types analyzed in the report include Advertising VOD (AVOD), Subscription VOD (SVOD), and Transactional VOD (TVOD).AVOD is expected to emerge as the predominant revenue source segment over the next eight years. Although AVOD provides consumers with free access to content, consumers are compelled to watch advertisements along with the content, which in turn creates opportunities for automated advertising services, such as YouTube, PopSugar, Yahoo! View, Vevo, and Hulu.
The growing demand for SVOD services, such as Hulu and Netflix, particularly in developed countries, is reducing the number of active TVOD subscriptions. With a steep growth in SVOD offerings, pay-TV operators and service providers have now started collaborating with Over-The-Top device and service providers, representing a higher degree of horizontal integration within the value chain.
With the evolving trend of OTT, consumers across the world are increasingly adopting these services as they provide them with a platform to decide where, when, and what to watch, thereby eliminating linear TV programming. There has been a growing demand for TVOD services across developed economies. Apps such as Microsoft Movies & TV, Chili TV, Apple’s iTunes, and Rakuten TV, are witnessing a growing adoption amongst the masses.
The various devices analyzed in the report include mobile devices & computers, smart TVs & set-top boxes, and gaming consoles. The increasing preference for Over-The-Top content is driving the demand for smart TV and streaming media devices that provide access to on-demand content.
Various smart TV manufacturers such as Sony Corporation, Panasonic, Samsung Electronics Co. Ltd., and LG Electronics Inc., are developing apps in collaboration with streaming media device companies, such as Apple, Amazon, and Roku, to provide Over-The-Top content and services as part of their standard product package. Smart TVs provide seamless integration with internet content, personal content, broadcast programming, and virtual applications on TV through in-built apps for internet destinations such as YouTube, Facebook, Twitter, and Netflix.
The proliferation of mobile devices and computers have given rise to new apps and technologies that enable customers to access and download music and live videos, and stream live content, irrespective of the time and place, on their smartphones, tablets, laptops, and computers.
Smart streaming devices are overcoming various challenges faced by conventional set-top boxes by enhancing home entertainment solutions with internet-connected device platforms, which allow access to streaming online content to TV. A majority of these devices include a portable dongle format, namely Google Chromecast, Amazon Fire TV Stick, and Apple TV.
The two key deployment types analyzed in the report include on-premise and cloud. The increasing demand for high-quality content and the emergence of VR, 4K content, and HDR are transforming the broadband industry. Moreover, the television broadcast industry is witnessing a shift from the Capital Expenditures (CAPEX) to the Operating Expenses (OPEX) model by reforming operations.
Global Over-The-Top companies have now started focusing on revenue generation and enhancing cloud services. These companies provide various resources, such as infrastructure and platform, and bill customers for the same based on an hourly or monthly period. This revenue generation model, in some cases, leads to seasonal fluctuations in infrastructure requirements and unpredictable balancing.
Broadcasters are now increasingly seeking to adopt new and innovative technologies to address the rising demand for OTT platforms. The internet is expected to become a major source for streaming videos, primarily owing to the growth in broadband penetration. The benefits associated with the use of cloud-based content are leveraging the growth of real-time communication such as reduced costs and improved performance.
Global OTT devices and services market, by revenue source, 2016 (%)
The North America regional market accounted for the largest revenue share of the global OTT devices and services market in 2016 and is expected to retain its dominance over the forecast period. The rapid adoption of OTT across the U.S. is supported by various factors, such as increased broadband penetration, the success of Netflix in the regional market, higher levels of disposable income, and consumer willingness to pay for the content.
Netflix’s entry into the European market has improved investment and service launches by broadcasters, pay-TV operators, and OTT providers. Industry participants across the region are investing heavily in advertising and promotion and are creating awareness and understanding about streamed content to achieve rapid growth in the region.
The growth in the Latin American OTT platform has developed the regional pay-TV platforms. As a result of this development, international broadcast groups have introduced various “TV Everywhere” services, including Fox Sports Play, ESPN Play, Telecine Play, and Globosat Play, across Mexico, Chile, Brazil, and Colombia.
The global OTT market comprises both, regional as well as international service providers. While international players have a growing presence in many regions, regional vendors lag behind in terms of diverse content offerings, quality, price, and features. Various international OTT service providers are introducing innovative offerings and products in developing countries, such as India, Japan, Mexico, and Brazil, to leverage the rapid economic growth in these regions. The key players dominating the global market share include Google Inc., Apple Inc., Amazon.com, Hulu, Netflix, and Roku, Inc. Other companies gaining significant growth include Akamai Technologies, Tencent Holdings Limited, and Limelight Networks.
Base year for estimation
Actual estimates/Historical data
2014 & 2015
Revenue in USD Billion and CAGR from 2017 to 2025
North America, Europe, Asia Pacific, Latin America, Middle East & Africa (MEA)
U.S., Canada, Germany, UK, France, Italy, Netherlands, China, Japan, Southeast Asia, India, South Korea, Mexico, and Brazil
Revenue forecasts, company market share, competitive landscape, growth factors and trends
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Segments covered in the report
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global OTT devices and services market on the basis of content, revenue source, device, deployment, and region:
Content Outlook (USD Billion; 2014 - 2025)
Text & Images
Revenue Source Outlook (USD Billion; 2014 - 2025)
Device Outlook (USD Billion; 2014 - 2025)
Mobile Devices & Computers
Smart TVs & Set-Top Box
Deployment Outlook (USD Billion; 2014 - 2025)
Regional Outlook (USD Billion; 2014 - 2025)
Middle East & Africa (MEA)
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