Is OTT Becoming the New Norm?

By Roger Franklin  |  July 3, 2019

According to a recent study by Allied Market Research, the Over-the-top (OTT) video market is set to reach US$330 billion by 2025. This represents a compound annual growth rate (CAGR) of as much as 16.7% between 2017 and 2025. This growth is hardly surprising when you look at the huge variety of content being offered OTT, with more and more live streaming channels being launched and some great advancements in OTT technology.

In the US, a recent study by the National Telecommunications & Information Administration (NTIA) found that a clear majority of viewers do at least some of their video watching online. This is further substantiated by eMarketer which says that Americans are spending more time with mobile screens than television.

All of this is of course having an impact on the more traditional television providers, which have negative growth expectations for the first time, according to PwC’s Global Entertainment & Media Outlook 2019–2023 report. However, it also represents an opportunity for those traditional providers to deliver their own complimentary OTT services and tap into that growing demand. Indeed, across Europe, it would seem consumers are juggling multiple subscriptions to get all the content they want from different sources. Interestingly the survey, conducted by Gracenote and nScreenMedia found that pay TV currently remains the most popular source across Europe.

In emerging countries, there is a different picture where we are seeing rapid growth in OTT and SVOD services. This was cited as one of the biggest contributors to the overall OTT growth in the study by Allied Market Research. In many of those areas television connections have historically been challenging, with limited coverage. Better connections and a plethora of service offerings is having a big impact and being embraced by consumers who suddenly have more choice than ever before.

Despite this rapid growth, one of the biggest challenges that remains for OTT is enabling monetization. With so many services on offer, only exceptional content will be enough to drive consumers to pay for a service. What’s more, consumers are generally receptive to ad content on OTT offerings in exchange for free access to the content they want. A poll commissioned by OpenX backs that claim up. Hardly surprising therefore that many of the OTT services are ad-supported. This is in turn leading to a growth in programmatic video ad spending according to eMarketer.

All of these developments mean that all video content providers should be considering delivering content OTT, either as their entire offering or as a complement to more traditional services. Providers should also be looking to maximize their ad revenue to monetize those services effectively. At Crystal, we believe that enabling targeted ads is the most effective way to do that, but it comes with its own set of challenges. You can read about how we are solving those in our recent blog post about enabling frame accurate signalling for ad insertion.

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