According to a new report from The Diffusion Group, revenue from the delivery of Internet video to the TV will grow nearly six-fold in the next five years, from a meager $1 billion in 2009 to $5.7 billion in 2014. These forecasts are part of TDG's latest digital media analysis, Broadband-Enabled TV: Rise of the OTT Provider, authored by TDG senior partner and digital video expert, Colin Dixon..
Dixon posits that in 2009, pay-per-view services will account for 96% of global OTT revenue, leaving subscription revenue with only 4% of the revenue mix. By 2014, however, annual OTT subscription revenue will have grown 50-fold and account for 31% of global revenue.
Dixon points to current hardware trends as fueling this growth, specifically the ongoing shift to broadband-enabled TVs and the rapid diffusion of ancillary web-enabled platforms such as game consoles, Blu-ray players, and hybrid set-top boxes. Widespread penetration of such platforms will set the stage for a rapid uptake of Internet-to-TV video services, both pay-per-view and subscription-based.As these platforms more widely diffuse and consumers become more comfortable with using Internet-based TV services, the market will be primed for the arrival of full-fledged PayTV replacement services. Subsequently, TDG expects major OTT service announcements in virtually all global regions in 2010 and 2011, both in terms of stand-alone OTT and hybrid PayTV/OTT TV services, both of which will help fuel growth in OTT subscription revenue to $1.8 billion worldwide by 2014. At that time, North America will account for the vast majority of global OTT subscription revenue ($830 million) followed by Asia ($490 million), and Europe ($407 million). Other global regions will collectively account for only $60 million of this total.