How Will Smart Device Penetration Help OTT Services Market Grow?

 A number of factors such as the increasing penetration of smart devices and the internet, rising internet speed, and burgeoning demand for video-on-demand services in developing countries are expected to contribute to the OTT services market growth during 2021–2030. In recent years, the surging adoption of 5G, to meet the high data speed demand, has become a major market trend. 

The increasing smart device and internet penetration is one of the key growth drivers for the market. In contemporary years, the availability of affordable smart devices has increased the consumption of online content, globally. The burgeoning demand for OTT content can also be credited to the ability of these devices to access high-speed internet and high internet penetration. For instance, in 2019, 56.727% of the global population used the internet, as per the World Bank.    

According to P&S Intelligence, the transaction-based category, within the monetization model, is expected to register the fastest growth in the OTT services industry in this decade. With this model, market players generate revenue by selling the license of a software product, which can be availed by an individual or a group of users. Nowadays, customers are purchasing the whole content, such as full-license video games, to avail the optimum benefits of online gaming.  

At present, the OTT services industry is fragmented in nature, with the presence of numerous players, such as Google LLC (YouTube), The Walt Disney Company, Amazon.com Inc., Roku Inc., Netflix Inc., Kakao Corp., Rakuten Inc., Telstra Corporation Ltd., Facebook Inc., and Apple Inc. Nowadays, these companies are engaging in the introduction of new services and platforms to consolidate their position. For instance, in February 2021, Hulu unveiled a free no-ad program with a 30-day trial. After the trial period, the company will charge $11.99 per month from its customers. 

Globally, the North American OTT services market generated the highest revenue in 2020. This was on account of the high penetration of the internet and smart devices, such as tablets, smart TVs, and smartphones in the U.S. and Canada. Additionally, the rapid digitalization in regional countries, owing to the ongoing technological advancements, will also support the market growth in the region. In addition, the availability of flexible packages and regional content, because of the presence of numerous market players, will also drive the demand for OTT services in North America.  

On the other hand, the APAC OTT services market is expected to showcase the fastest growth throughout this decade. This will be due to the booming population, soaring internet penetration, and expanding smartphone user base in developing countries, such as China and India. For instance, the population of India and China grew from 1.36 billion in 2019 to 1.38 billion in 2020 and 1.39 billion in 2019 to 1.40 billion in 2020, respectively, as per the World Bank.   

Thus, the surging internet and smart devices penetration and the soaring focus on 5G network will propel the global demand for OTT services in the future.  

SOURCE: P&S Intelligence