Over The Top Devices And Services Market Size, Share & Trends Analysis Report By Content (VoIP, Text & Images, Video), By Revenue Source (AVOD, SVOD), By Platform, By Deployment, By Device Type, And Segment Forecasts, 2020 - 2027

Report Overview

The global over the top devices and services market size was valued at USD 56.40 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 18.6% from 2020 to 2027. The substantial growth of the media and entertainment industry and the increasing demand for high-quality streaming content over smart devices are some of the critical factors driving the industry. The OTT media services offer higher accessibility, connectivity, convenience, and portability compared to traditional cable and satellite services. Additionally, the deployment of advanced technologies by service providers and the provision of customized content has created immense attractiveness for the industry and is expected to accelerate the revenue generation over the next seven years.

The implementation of Artificial Intelligence (AI) by various service providers is a prominent trend inducing immense market growth potential. Utilization of such enhanced technologies for analyzing customer preferences as well as offering customized and premium content has been the prime focus of the industry participants over the past few years. Moreover, continued innovations in the communication infrastructure and the rising internet penetration globally have resulted in enormous demand for such services. This is expected to augment the industry growth over the forecast period.

Numerous conventional media houses, which own vast archives of television content and legacy movies, are amplifying and reinvigorating their growth via OTT-based distribution models. Additionally, several pay-TV operators have started offering their individual subscription-based services. Dish’s Sling TV and AT&T’s DirecTV are some of the popular examples of standalone and affordable services in the U.S. Similarly, the launch of OTT services by Sky across the European countries has promoted the industry’s regional penetration at a broader level, ultimately contributing to the revenue generation.

The increasing willingness of subscribers to pay for premium content has encouraged OTT service providers to introduce “fremium” models, which provide free access to the selected content for acquiring new subscribers.  They are also offering premium services and content to the paying subscribers for increasing their average revenue per user. Several market players, such as Hulu, are launching lite pay-tv services to offer linear channels at lower prices compared to the traditional ones. Such efforts by the industry participants have led to considerable expansion of the OTT subscriber base in recent years.

Content Insights

The OTT video segment accounted for the largest revenue share of 49.4% in 2019 and is projected to maintain its lead over the forecast period. The increasing number of OTT subscriptions have majorly driven the segment’s revenue. Breakthroughs in broadcast technologies have resulted in the development of innovative video streaming devices. The addition of features such as adaptive bitrate streaming has resulted in the creation of immense attractiveness for the video streaming platform providers, including Netflix and Hulu. The regional OTT video providers are penetrating the local markets and collaborating with Mobile Network Operators (MNOs) to create constantly evolving product offerings and capture maximum market shares.

The VoIP segment is expected to exhibit the highest CAGR of 20.4% from 2020 to 2027. A significant upsurge in smartphone users globally has led to the increased popularity of mobile VoIP, with users across the globe subscribing to VoIP services and apps offered by OTT service providers. VoIP has witnessed substantial growth in developed economies or specific sectors as well as in emerging economies, such as India. VoIP's cost-saving advantages and capabilities over conventional telecom are driving its prompt acceptance as a modern standard for voice communications.

Revenue Source Insights

The Ad-based Video on Demand (AVOD) segment accounted for the largest revenue share of 38.8% in 2019. AVOD OTT platforms have attracted substantial attention over the past years, which has supported the revenue generation. Additionally, developed economies, such as the U.S., are expected to witness several significant AVOD platform launches over the coming years. However, the popularity of Subscription-based Video on Demand (SVOD) platforms is expected to overshadow the segment’s growth, resulting in a relatively sluggish growth over the forecast period.

SVOD is expected to emerge as the fastest-growing segment over the forecast period. It is expected to surpass the AVOD counterpart and dominate the overall industry by the end of 2027. The segment’s growth is primarily attributed to the provision of an optimal balance of value to both the customer and the company. As per the estimates, three-fourth of the total OTT consumers in the U.S. have a subscription to at least one SVOD platform. A dramatic upsurge in the number of subscriptions to video streaming platforms, such as Netflix, Amazon Prime Video, and Disney+ Hotstar, has been a critical factor supporting the growth of SVOD. Additionally, the implementation of a fixed price model by the key SVOD platforms has attracted a humongous customer base, especially during the ongoing COVID-19 pandemic, as individuals are engaged in watching more streaming content now compared to the pre-pandemic situation.

Deployment Insights

The on-premise deployment segment accounted for the largest revenue share of 57.8% in 2019 owing to the high dependency on streaming infrastructure and equipment over the past decades. However, cloud deployment is expected to outgrow the on-premise segment and dominate the industry by 2027. Complexity in OTT services is one of the primary factors responsible for this paradigm shift as the implementation of cloud-based workflow enables video service providers to effectively hand over the responsibility of networking and infrastructure supporting their OTT services. The television broadcast industry is switching from CAPEX to an OPEX model by reforming its internal operations and scaling costs and associated services, along with its changing requirements.

The cloud platform is also gaining global acceptance as it offers efficient maintenance of databases and helps reduce time and cost. On the contrary, on-premise deployment requires more investment and is a time-consuming procedure, hence is expected to grow at a comparatively slower rate from 2020 to 2027. The broadcasting companies are continuously focusing on adopting innovative technologies to address the rising demand for cloud-based streaming content and deliver improved services. Such enhanced services have resulted in an increase in the number of customers, thereby accelerating the segment growth.

Device Type Insights

Streaming sticks accounted for the largest demand share of 53.4% in 2019 and is expected to maintain its lead over the forecast timeframe. Streaming sticks have gained immense popularity over the past few years due to their compact size and cost-effectiveness. The manufacturers are focusing on introducing products of their own, with unique features, at a lower cost, in an attempt to strengthen their foothold in the market. Such features cater to the rapidly changing consumer needs globally, consequently broadening the customer base and accelerating the product demand.

Streaming media players emerged as a dominating segment, in terms of revenue, with over 60.0% share in 2019. The demand for streaming media players has witnessed a significant surge over the past few years. An increasing number of product innovations are expected to induce immense potential to the segment growth over the forecast timeframe. The North American and European countries were among the first adopters of these devices due to well-established high-speed internet infrastructure. As per the estimates, more than 50% of internet users in Europe possess a streaming media player in their households. Consumers are benefitting from lower prices on these devices to equip their older television units with access to online streaming content. However, the rise in smart TV demand and the popularity of streaming sticks are expected to challenge the segment growth over the coming years.

Platform Insights

The mobile devices and computers segment accounted for the largest revenue share of 55.7% in 2019 and is expected to maintain its lead over the forecast period. Continuous innovations in mobile devices and computers have resulted in the development of advanced apps that allow easy downloads, access to live videos and music, and streaming of live content on laptops, tablets, smartphones, and computers, irrespective of the location and time. Due to the significant growth in mobile video viewership across the globe, service providers, such as Netflix, are increasingly prioritizing mobile features for their customers and have introduced mobile-only subscription tiers in countries with high viewership, such as India. Additionally, OTT video providers are constantly adding enhanced features to improve the in-app experience, resulting in an increase in subscriptions, ultimately fueling the segment growth.

The gaming console segment is expected to emerge as the fastest-growing segment, exhibiting a CAGR of 21.6% from 2020 to 2027. A rising number of connected gaming consoles globally is one of the key factors fueling the segment growth. Additionally, these devices are increasingly being preferred by the younger demographic for streaming online video content. As per the estimates, in 2018, more than 85% of gaming console owners subscribed to at least one OTT service. As a result, console providers have been opening their platforms for third-party applications, enabling the online video streaming functionality like that of dedicated media streaming devices, such as Amazon Firestick and Apple TV. This trend has significantly increased the OTT subscriptions in recent years, thereby positively impacting the overall market growth.

Regional Insights

North America accounted for the largest revenue share of 46.2% in 2019 and is expected to maintain its lead over the forecast period. Well-established economies, such as the U.S., are making significant investments in new technologies. The region is home to prominent verticals capable of making necessary investments in advanced and reliable IT infrastructure for the continuously growing data traffic. Moreover, due to higher disposable income levels, the consumer willingness to pay for premium content or a subscription is much higher in the region, which is supporting the regional market growth.

Asia Pacific is expected to emerge as the fastest-growing regional market, exhibiting a CAGR of 23.8% from 2020 to 2027. The region has witnessed an influx of international service providers capitalizing on the increasing traction of subscription OTT. Countries such as China and India are some of the major contributors to the regional revenue owing to the continuously growing number of subscribers. The leading service providers are also implementing mobile-based subscription models due to the rising mobile video viewership in emerging countries, ultimately accelerating the regional market growth. Additionally, the growing localization initiatives across the Southeast Asian countries are playing a vital role in retaining the paying subscribers.

Key Companies & Market Share Insights

The adoption of a customer-centric approach has significantly helped the companies in gaining a broad customer base. In 2019, Hotstar initiated cricket streaming, which made it India’s leading digital streaming platform. The industry rivalry is intensifying owing to the rising initiatives by the companies to upgrade their services, with every player focusing on capturing maximum market share. The companies are engaging in partnerships with telecom operators to further expand their reach to the masses. Additionally, the industry faces fierce competition from pay-TV operators, where companies are trying to get ahead within content development and video distribution. Some prominent players in the global OTT devices and services market include:

• Netflix

• Amazon.com

• Hulu LLC

• Apple Inc.

• Facebook Inc.

• Roku Inc.

Impact of COVID-19 on the Industry

The imposition of lockdown due to coronavirus has brought about a paradigm shift across the media and entertainment industry, with OTT platforms increasingly seizing the opportunity. The digitally-driven industry is becoming more consumer-centric and is emerging as one of those sections of the entertainment arena that has performed exceptionally well even in the current situation. The viewership of major streaming platforms has witnessed an exponential surge owing to the extension of nationwide lockdown in some countries and the intensifying need for social distancing. This is also supported by the shutdown of shoots of TV shows, multiplexes, and other entertainment avenues.

The OTT platform providers have taken charge of catering to the increasing entertainment needs of the audience. They are focusing on meeting the demand of the viewers, who have been deprived of new movie releases, by relentlessly offering fresh streaming content on their devices without violating the social distancing norms. Watching web series and shows has become an escape point for consumers to preclude the monotony of being confined within their houses. Additionally, the companies are extending a sigh of relief to the filmmakers by offering them enormous reach and allowing them to keep their business running even in these adversities.

Over The Top Devices And Services Market Report Scope

Segments Covered in the Report

This report forecasts revenue and demand growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global over the top devices and services market report on the basis of content, revenue source, platform, deployment, device type, and region: 

• Content Outlook (Revenue, USD Billion, 2016 - 2027)

  • VoIP

  • Text & Images

  • Video

• Revenue Source Outlook (Revenue, USD Billion, 2016 - 2027)

  • AVOD

  • SVOD

  • TVOD

  • Others

• Platform Outlook (Revenue, USD Billion, 2016 - 2027)

  • Mobile Devices & Computers

  • Smart TVs & Set-top Box

  • Gaming Console

• Deployment Outlook (Revenue, USD Billion, 2016 - 2027)

  • On-premise

  • Cloud

• Device Type Outlook (Demand, Thousand Units; Revenue, USD Million, 2016 - 2027)

  • Streaming Media Players

    • Streaming Box

    • Connected Gaming Console

    • OTT Set-top Box

    • Others

  • Streaming Sticks

• Regional Outlook (Demand, Thousand Units; Revenue, USD Billion, 2016 - 2027)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Netherlands

  • Asia Pacific

    • China

    • Japan

    • Southeast Asia

    • South Korea

    • India

  • Latin America

    • Mexico

    • Brazil

  • Middle East & Africa