The latest Western Europe OTT TV & Video Forecasts report from Digital TV Research has found that revenues from over-the-top (OTT) TV and video will see 129% growth between 2015 and 2021.
The study found that by 2021 OTT TV and video revenues in Western Europe will reach $14.64 billion, up from $6.40 billion in 2015. Yet growth rates in the 17 countries covered in the report are set to vary considerably. OTT adoption was found to be already high in Scandinavia, the Netherlands and the UK, but much more muted in other countries such as France, Spain and Portugal. The UK will remain the regional market leader by some distance. Of the $8.25 billion in revenues to be added between 2015 and 2021, the UK is set to contribute $2.30 billion, Germany $1.34 billion, France $1.13 billion and Italy $0.99 billion.
In terms of sources of revenue, Digital TV Research calculates that subscription video on-demand (SVOD) will become the region’s largest OTT revenue provider until 2018 and that by 2021 revenues will total $5.632 billion by 2021, up from $2,098 million in 2015. Nearly $1 billion will be added in 2016 alone. The UK’s SVOD revenues are forecast to rise by nearly $800 million between 2015 and 2021 to $1,507 million. This, despite what Brexit could mean, places the country as the SVOD revenue leader, generating as much as second-placed Germany and third-placed France combined in 2021.
Digital TV Research forecasts 53.71 million SVOD subscriptions by 2021, up from an expected 31.43 million by end-2016. More than eight million subscribers will be added in 2016 alone. Nearly a third (30.7%) of the region’s TV households will subscribe to an SVOD package by 2021; triple the 13.6% recorded by end-2015. Also outlining the huge regional variations, Sweden is set to have more SVOD subscribers than Spain in 2021, despite only having a quarter of the population. Despite this, the number of subscriptions will quadruple in France and Italy between 2015 and 2021 and will grow eight-fold in Spain.
Commenting on the findings in the SVOD sector, report author Simon Murray said: “The Spanish SVOD sector is stifled as Telefónica provides its Yomvi SVOD platform free to its pay-TV subscribers. Yomvi is no longer offered as a standalone service. This also degrades the perceived value of the other SVOD platforms. France’s relatively low take-up is harder to explain as there is a good selection of SVOD platforms on offer. However, Government-imposed release windows dictate that SVOD platforms can only screen movies well after they have appeared on other platforms.”
The report also showed that advertising on OTT sites (AVOD) will become the leading revenue source by 2020 boosted by the rapid expansion in mobile sales. AVOD is set to provide $5.79 billion by 2021, $3 billion up on 2015. Again the UK will be the regional leader, supplying $2.333 million of the 2021 advertising total, followed by Germany with $904 million.