European OTT Video Revenue to Double By 2021, Despite the Advent of Converged Video Services: Frost & Sullivan

The media industry in Europe is undergoing rapid transformation with increasing popularity of over-the-top (OTT) video services, Frost & Sullivan noted in a recent report. Increasingly ubiquitous connectivity, progressive consumers, and regulatory initiatives around a ‘Digital Single Market (DSM)’ have intensified the competition among several international companies, local start-ups, pay TV operators and broadcasters who offer OTT video services.

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As the market moves towards maturity, keeping viewers engaged through personalized content delivery and targeted advertisements will be the key to minimizing churn, while pricing and technological innovation will play a key role in defining the market over the next five years.

The radically reshaped environment will not necessarily protect market incumbents, Frost & Sullivan researchers believe. “Despite having an early mover advantage, multi-country service providers such as Netflix, Amazon and Sky battle for viewership with regional service providers such as Maxdome in Germany, CanalPlay in France, Ziggo in the Netherlands, and new entrants such as Knippr, Molotov,” said Digital Transformation Research Analyst Swetha Ramachandran Krishnamoorthi. “The 450+ service provider ecosystem in the continent is expected to consolidate as price wars and content wars intensify, eventually forcing smaller participants to exit or be acquired by the bigger ones.”

The European market is not a homogeneous market. “Parts of the European market are approaching maturity in terms of OTT content viewership, Senior Research Director Vidya S Nath said. “OTT video is increasingly watched not just on handheld devices, but also on connected television. Such mainstream adoption presents challenges of a different sort -- content providers need to constantly innovate on user interface and content exclusivity to compete with service providers across all media”.

OTT video adoption is already high in Western European countries such as the UK, France and the Netherlands. Expected CAGR in these markets will be around 15 percent in viewership base. Newer market entrants are targeting a smaller percentage of population with niche offerings. In contrast, markets including Germany, Poland, Italy and the Nordic countries are at an early growth phase, as evident from the increasing number of new service launches and partnerships in the region, boosting the CAGR forecast to above 20 percent.

“While competition escalates, opportunities abound for stakeholders ready to invest OTT services while leveraging the excellent infrastructure the region has,” Ramachandran Krishnamoorthi says.

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