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  • August 29, 2017

    Video Market Outlook – FY17: SVOD is driving growth of the mark [...]

    The Australian Video Market is plateauing, as growth continues for SVOD alongside losses for traditional media. We anticipate the market to reach A$5.3b by 2022. Streamed digital media (SVOD, TVOD and EST) are growing strongly at the expense of physical media (Blu-ray and DVDs). SVOD subscriptions are anticipated to reach over 6 million by 2020, driven predominantly by Netflix.
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    February 8, 2017

    Apple TV: Is video streaming taking the lead in TV consumption?

    The video streaming market continues to grow with a greater number of devices being sold year on year and the four big players in video streaming devices continue to compete for market share. We discuss the changes to consumer behaviour driving this growth and what impact this might have on the wider TV market and look further into Apple TV and how their new update has affected their position in the market.
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    January 27, 2017

    Netflix at 10: still growing, still spending

    Netflix celebrated the 10-year anniversary of its streaming service by posting its largest quarterly rate of subscriber growth, adding just over 7m new subscribers in Q4 2016, smashing its own forecast for the period of 5.2m.

    5.12m of the new subscribers were for its international services, attributed to acceptance of its growing suite of English language original programs. But growth is just as likely related to the bolstering of overseas offerings with acquired programming, after launching worldwide with relatively small libraries.

    While re-establishing confidence after a period of doubt when missing targets in Q2, challenges await; most notably concerns around net neutrality, diversifying content genres, and the open question as to how effectively original programming will be able to carry the service.

  • November 30, 2016

    The future of free-to-air television Part 2: Profiting from New F [...]

    The provision and consumption of on-demand video is exploding. FTA broadcasters must adapt to these new media and audience behaviour trends. They are well placed to exploit the significant opportunities that exists in redefined ‘TV’ and adjacent markets but the price of failure will be irrelevance and decline.
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    November 2, 2016

    Programmatic TV’s European Evolution

    Declining broadcast viewing to the TV set among younger demographics, fragmentation of video viewing across screens, the lack of robust measurement of viewing across screens and the development of online video advertising technology are altering the European TV landscape. Programmatic TV is at an early stage, but has shown its potential with increased audience targeting options and campaign automation: the roll-out of programmatic models and ad technology for European TV advertising have already prompted advertisers to see TV in new ways, beyond its core strengths in mass brand advertising. Automated ad technology can support the existing linear broadcast ad infrastructure; in addition we project a combined potential for annual increased TV ad revenue of €220-300m by 2018 in the seven markets of the study, driven by new advertiser spend on addressable TV advertising and programmatic broadcaster OTT.

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    June 1, 2016

    New VOD rules in the EU Digital Single Market

    The Commission proposes to require VOD services to implement a 20% share of EU works in catalogues, which Netflix already largely meets. More impactful is the EU’s proposal for OTT SVOD services to provide access to the home service when subscribers travel in the EU, benefitting the UK’s 14 million subscribers. TV broadcasters, which observe a 50% EU works threshold in their linear programming served on TV platforms and online players, will be able to opt-in to portability.
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    April 18, 2016

    Vivendi, Mediaset and the Latin strategy

    Vivendi is to acquire the main pay-TV division of Italy’s Mediaset in an all-share transaction, creating a ‘strategic alliance’ between the two groups. Each partner will own a 3.5% stake in the other. The deal is positive for Mediaset but the benefits for Vivendi can only accrue long term. Mediaset Premium claims two million subscribers and recorded €640 million revenue in 2015. However, EBIT losses amounted to €115 million and are likely to more than double through 2016 and beyond. The deal has no discernible impact on Premium’s bigger rival Sky. Vivendi and Mediaset will also jointly operate a ‘global’ online video platform and collectively develop content production and distribution. The pair’s respective assets are sizeable but domestically focused with little demonstrable international synergy.
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    March 10, 2016

    The sleeping giant wakes into DisneyLife

    Disney surprised few with the launch of the SVOD service DisneyLife in the UK in November 2015, unlike its subsequent push into China. This could be seen as a mitigating strategy in face of partner streaming services beginning to invest increasingly in original content. But it also provides Disney with a streaming presence from which to build, or add spice to future licensing negotiations. Despite finding itself behind in the SVOD audience race, global affection for Disney, a typically handsome platform and a targeted roll-out should see success.

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    February 1, 2016

    China OTT and SVOD

    China holds tremendous appeal to studios and OTT video services, boasting an audience of 460 million online video users in mid-2015 (69% of internet users), which could exceed 900 million by 2020 by our estimate.

    China’s OTT video marketplace generated estimated revenues of $5 billion in 2015, of which two-thirds was due to ad-supported streaming and the rest to paid video streaming.

    Netflix recently pledged to enter China, although the current regulatory environment presents substantial, perhaps insurmountable, challenges to a direct-to-consumer offering

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    September 30, 2015

    Video Market Outlook – Physical makes way for Digital

    We don’t expect the overall size of the video entertainment market to change materially but we do expect the platform share to change dramatically over the next five years. We expect xVOD services to represent 20% of the overall market from around 5% currently (replacing Physical Media and Premium Pay-TV).

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    July 1, 2014

    UK home video: digital switchover

    The British Video Association has released full year figures for 2013 for the UK home video market, which reveal that growth in digital video, especially in over-the-top subscription services e.g. Netflix, offset the fall in spend on physical media last year, reversing the previous downward trend. The bad news is that DVD's decline is set to quicken, as the number of households with stand-alone players has begun to fall, though there should be some respite this year from sales of huge box office hits such as Disney's Frozen and Warner Bros.' Gravity. Ultimately, we see rising penetration of high speed broadband and connected devices including the TV set as a net positive, as more people have more ways to spend money on video, but the shift from purchase to rental and subscription options will mitigate the benefits.

     

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    April 16, 2014

    Netflix extends its tightrope part 2: Abroad

    Netflix is making steady progress with the global expansion of its streaming business, which now makes up 20% of total revenues, but is still far short of its long term vision of 70-80% share. Building a large presence in Europe is vital to long term success. The signs are that Netflix is steadily growing its UK and Ireland base, and performing even more strongly in the Nordics and possibly also in the Netherlands. We are reaching the most critical point of Netflix's European journey, as it contemplates entry into the key markets of France and Germany. Germany looks the more obvious first choice, with rumours of a September launch, but ideally Netflix will want an autumn launch in France too, if it can handle the extra strain on budgets.

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    April 3, 2014

    Prime time: Amazon enters the living room

    Amazon has entered the increasingly crowded digital entertainment TV device marketplace, one which could be strategically more important for the ecommerce giant than tech rivals Apple and Google. The frictionless integration of entertainment and ecommerce on TV represents a bigger consumer milestone than competitor services are offering, and Amazon's brand has huge appeal, though at present it has less market traction for streaming than it does for other products. Content owners and broadcasters remain the real TV gatekeepers, with integration of TV and digital a service-level pipe dream for now, and so Amazon will likely have to accept being one of many, rather than the runaway winner as it is in books.

     

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    April 2, 2014

    Netflix extends its tightrope part 1: At home

    The core US long form streaming subscription business, so vital to Netflix prospects of long term global as well as domestic success as competition increases, shows no sign of slowing, while guidance points to Q1 2014 as another strong quarter Although market research indicates a positive brand image, boosted by Netflix's entry into original content commissions, Netflix cannot afford to slacken in its efforts to build its subscriber base due to strong upward competitive pressures on content obligations Content delivery is the other big cost challenge. There is no guarantee that the recent deal with Comcast will last, as the leading ISPs contend with conflicts of interest that arise from wishing to support the traditional model of linear TV but also to exploit the potential of long form online video.

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    September 10, 2013

    Virgin Media Netflix TTM OTT pact

    Virgin Media and Netflix have agreed on a ground breaking trial that blurs the traditional distinction between pay-TV platforms and OTT services by permitting TiVo customers direct access to Netflix via their set-top boxes The deal promises to benefit both parties as Netflix enhances the Virgin Media content offer to its TiVo customers with minimal risks of cord-shaving, while availability on Virgin Media TiVo offers Netflix the prospect of incremental subscription growth The question is whether other pay-TV platforms will follow suit, including Sky with its competitive interests in film rights acquisition, but where the Netflix value to UK viewers is increasingly seen to lie in its TV content

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    August 20, 2013

    YouTube MCNs: The New Networks

    Multichannel Networks (MCNs) operating on YouTube (YT) have seen a surge of interest from financial and strategic investors over the last year, mirroring their rapid growth on the platform and popularity among YT's core demographic of 13-35 year olds. As an extension of YT's partner programme, MCNs provide production, traffic, monetisation and rights management services to content creators and brands, thus closing a gap in YT's ecosystem by offering trusted environments with higher quality and monetisation standards. MCNs are a key element in the professionalisation of YT and hence attractive vehicles for third parties to gain exposure to YT's reach and potential. Looking ahead, for YT to continue its evolution and reach new levels of monetisation and content quality, structural and control issues need to be addressed that currently cap the upside.

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    August 20, 2013

    Channel Netflix

    Netflix H2 2013 results show continuing steady expansion in its domestic US and international streaming businesses, mostly towards the upper end of company guidance Netflix has always posed as a disruptor, yet there is nothing revolutionary in its business model or content origination strategy, while confidence in the future owes much to growing acceptance of Netflix as another channel outlet by incumbent content owners Although Netflix releases no international streaming data by country, there is some evidence to suggest it is edging towards two million in the UK; but is still on a tightrope as it races to add subscribers and revenues to cover its fast growing and somewhat shrouded content obligations

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    April 30, 2012

    The Netflix tightrope

    Netflix resumed strong growth in domestic US streaming subscriptions in Q1 2012, but weak Q2 guidance and high churn reinforce doubts about long term profit growth in an increasingly competitive market. Netflix has embarked on a global expansion strategy in the belief that achievement of global scale will improve its bargaining power, but the rationale is questionable and the prospects of incremental profits at best long term. The Netflix UK and Ireland streaming launch in January 2012 exceeded expectations; however, the importance of the US and interlocking of established content creation and TV distribution interests underscore the challenge facing Netflix and the thinness of the line between success and failure.

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    January 13, 2012

    Netflix faces uphill battle in the UK

    The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT. Unlike in the US, Netflix's UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free. The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US.

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    December 22, 2011

    Digital platform growth post analogue

    As Phase 1 digital shift from broadcast analogue to digital nears completion, individual platform growth trends have almost flattened out. The most likely area of change in platform trends over the next ten years concerns basic only subscription pay-TV, where we anticipate an overall increase in the total pay-TV base and change in platform balance arising from the introduction of low price basic packages. Phase 2 digital convergence between TV and the internet promises to take many years to reach maturity, and many questions need to be addressed in order to be able to assess its potential impact on the current broadcast TV marketplace over the next ten years.

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    December 6, 2011

    The Netflix whirlwind

    The spectacular growth of Netflix in the US has underlined the potential of online streaming subscription services offering films and other premium entertainment. As Netflix plans to enter the UK and Ireland in Q1 2012, its core US operations are in a critical phase of extremely rapid adoption, rising competition and escalating content costs, the successful outcome of which appears crucial to the international expansion of online streaming. The UK and Ireland possess features that make them an attractive first move into Europe; however, the competitive stakes are higher, while broadband download limits and traffic management present an added challenge – time will tell whether the UK and Ireland can sustain Netflix alongside LoveFilm and any other subscription online streamers.

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    September 27, 2011

    Video streaming and news online

    The UK is now entering a period of intense discussion of the regulation and ownership of news outlets. In this context it is revealing to look at a case study of news viewing online. Livestation is an online service which aggregates several dozen TV news channels and makes them available online. Two of the most prominent are Al Jazeera and Al Arabiya. These channels experienced explosive growth during the ‘Arab Spring' events, and this was reflected in the statistics for access to their online streams, which we analyse here. In the course of these events, the live video streams for Al Jazeera and Al Arabiya went from 150,000 and 50,000 monthly uniques to 3.3m and 1.3m. Their audience online switched from a tiny base of largely expatriate viewers outside the Arab world to millions of viewers in the Arab world. Even after the most dramatic events subsided, traffic remains 10 times what it was in late 2010.

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    September 21, 2011

    Google TV in the UK: friends with few benefits

    Nearly a year after rolling out Google TV in the US, Google has confirmed plans to launch its ‘smart TV' operating platform in Europe and the UK by early 2012. To date, Google TV in the US has been a disappointment, with little broadcaster support and, until recently, expensive devices, resulting in low adoption. The content issue is likely to dog Google TV, both here and in other European markets; access to key broadcaster TV and video programming will be a major challenge.

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    August 1, 2011

    UK video-on-demand forecasts to 2015

    This presentation details our assessment of the UK prospects for video-on-demand advertising through to 2015, covering through-the-middle and over-the-top services. While video-on-demand consumption is set to grow strongly, particularly to the TV, linear broadcast services, supported by PVR timeshift, will continue to account for over 90% of viewing to the TV and PC/ tablet over the next five years. As a result, we forecast that VOD advertising will equate to 7% of TV NAR by 2015, with current high prices for in-stream video ads falling as it becomes more integrated with TV airtime sales.