European OTT video revenue was up 51% in 2013, reaching US$3.2 billion, and it is expected to grow another 43% this year, according to a new report by Strategy Analytics.
The company’s 2014 European OTT Video Market Forecast predicts the majority of this growth will occur in SVOD and ad-supported video sectors, taking revenue past $9.45 billion by the end of 2018.
In a statement accompanying the report, Strategy Analytics digital media analyst Leika Kawasaki explains that the expansion of global streaming services like Netflix across Europe has been slowed due to complex content negotiation impacting the quantity and quality of available video in the region. Simultaneously, broadband expansion, the proliferation of connected devices, and easy access to extensive online video catalogs have worked together to drive the adoption of OTT video.
All these factors work in concert to decrease the market for physical media, such as DVDs and blu ray.
“Over time, consumers will shift from content ownership to lower cost means of consuming media,” Kawasaki writes. “As long as OTT services providers continue to offer attractive video catalogues at a reasonable price, accessibility and availability will trump ownership.”
Other key findings from the report include:
- Led by Netflix, European SVOD revenues were up 133% in 2013 and are expected to nearly double by the end 2014.
- Ad-supported video makes up over 60% of total OTT video revenue in Central and Eastern Europe, but will represent less than 50% of Western Europe OTT video revenue for 2014.
- Average OTT video spend per broadband user in Western Europe is about four times that of those in Central & Eastern Europe.
Strategy Analytics is a consulting and market intelligence service for emerging technology, mobile and wireless, digital consumer and automotive electronics companies with offices in North America, Europe and Asia.