As physical media has become more antiquated, content companies are turning more and more to streaming and IPTV solutions. This has led to a relatively competitive streaming service market, at least for the portion of the market that Netflix does not dominate.
Market research firm ABI Research today released a report showing that Netflix now accounts for 40% of what it calls the OTT (over-the-top) market in the UK.
However great Netflix's market share currently is, ABI does not see the company controlling the streaming market forever. Instead, it predicts that OTT revenue will increasingly come from video-on-demand (VOD) services, digital sales, and advertising in the future, rather than subscription services. Digital rentals are expected to make up a major portion of those VOD services, which in turn will make up a larger portion of OTT revenue. Digital sales could be increasingly influenced by content holders' own DRM-laden platforms, attempting to mimic physical disc sales and collections.
“The pace of change within the video market has been remarkable," said Sam Rosen, Practice Director at ABI. "The next wave of disruptive services will be national OTT services from existing pay TV market participants, as indicated by Verizon’s acquisition of Intel Media and Sony’s cloud TV hopes. As more digital content becomes available, consumer’s perceptions of ownership will change - instead of moving from physical media to electronic purchases, video is looking increasingly like music where consumer’s access owned and subscribed libraries of content via services rather than personally amassing collections.”
Image via Netflix