Factors such as the rising internet speed, surging penetration of smart devices and the internet, and burgeoning demand for video-on-demand (VoD) services in developing countries are expected to steer the over-the-top (OTT) services market growth during the forecast period (2021–2030). Currently, the deployment of the 5G network, to offer increased data speed at low cost, is becoming a prominent market trend. Countries such as the U.S., the U.K., Australia, Japan, Taiwan, Germany, and South Korea have already started deploying 5G networks.
The increasing penetration of the internet and smart devices is one of the key growth drivers for the market globally. Customers can access OTT content through smart TVs, internet-connected phones, tablets, laptops, desktops, gaming consoles, and set-top boxes. Moreover, the increasing amount of time being spent on these smart devices, owing to their escalating use for work and entertainment purposes, will augment the demand for OTT services. Additionally, the growing penetration of high-speed internet and advanced network technologies, such as optical fiber, 4G/LTE, and 5G, will facilitate the market growth.
At present, the OTT services market is fragmented in nature due to the presence of numerous players, such as Netflix Inc., Facebook Inc., Roku Inc., Apple Inc., Amazon.com Inc., Rakuten Inc., The Walt Disney Company, Telstra Corporation Ltd., Google LLC (YouTube), and Kakao Corp. Nowadays, these players are introducing OTT platforms and services to gain a competitive edge. For instance, in March 2021, Netflix Inc. started testing mobile+, a new plan in India for INR 299 per month. This plan will enable subscribers to stream content in 720 HD quality on computers and smartphones. However, this plan will not be accessible on TVs or multiple devices simultaneously.
The monetization model of the OTT services market is classified into advertising-based, subscription-based, and transaction-based. Under this segment, the transaction-based model is expected to witness the fastest growth throughout the forecast period as it enables market players to generate revenue by selling the license of a software product that can be utilized by a group of users or a single user. Moreover, the increasing tendency of users to purchase entire content, such as a full-license video game, with all the features will drive the growth of this category.
Furthermore, the streaming device segment of the OTT services market is categorized into smartphones and tablets, laptops and desktops, gaming consoles, and others. Under this segment, the smartphones and tablets category accounted for the largest market share in 2020 due to the rising technological advancements and growing internet penetration. According to the International Telecommunication Union (ITU), there were 4 billion internet users across the world in 2019. Additionally, this number accounted for over 51% of the global population.
Geographically, North America held the largest share in the OTT services market in 2020 due to the burgeoning internet penetration in the region. As per the ITU, nearly 88.49% of the North American population used the internet in 2018. Whereas, the Asia-Pacific (APAC) market is expected to observe the fastest growth during the forecast period as a result of the booming population, expanding smartphone user base, and increasing internet penetration in developing countries, such as China and India.
Thus, the expanding smartphone customer base and rising internet penetration will supplement the market growth.
