A new report forecasts the online video industry will reach $28.72 billion in 2017, soaring from the $3.79 billion recorded in 2010 and the $11.14 billion expected in 2012.
These numbers point out that the OTT sector is “on the brink of a tremendous take-off,” according to the firm Digital TV Research. While the U.S. is projected to lead in online video revenue — totalling $10.9 billion in 2017 — China is estimated to come in second with $2 billion.
The major driver for growth continues to be online advertising, which is estimated to bring in $6 billion in revenue in 2012. Advertising’s share of OTT revenues is predicted to fall from 65 percent in 2010 to 51 percent in 2017 as new forms of revenue rise. New video services make up about 3 percent of global video revenues. Another recent report by ABI Research suggests that over-the-top rentals will surpass subscription services by 2014, driven by an increase in connected and mobile devices. Not to mention, Parks Associated says there will be 87 million connected TV households by 2016 — something that’s music to advertisers’ ears since the majority of smart TV households (55 percent) have at least a $75,000 income and own 11 Web-enabled devices.
We’re inclined to agree with Digital TV Research’s assessment that online video is on the brink of something big.
By Greg Franzese