Published July 10th, 2017
There is a high level of activity in the European over-the-top (OTT) / Video-on-Demand (VOD) services market in terms of financial investments, new features, and service launches. The fragmented ecosystem, with over 450+ unique video on demand service providers in the region, is transforming as partnerships between various stakeholders in the value chain increase to capture market share.
About EUR150 million was invested in 2016 in content and technology firms to drive expansion of connected video services. However, intense competition, price sensitivity among consumers, regulatory uncertainty due to Brexit policies, and the digital single market strategy of the European commission, are some of the challenges that could restrain the growth of the market in the near term.
Content personalization and customization strategies are crucial for growth, finds Frost & Sullivan’s Digital Transformation team
“Various events in the media industry in 2016 and early 2017 reflect that the OTT video industry in Europe is undergoing major transformation,” states Frost & Sullivan Digital Transformation Analysts Vidya S Nath and Swetha R K. “Despite being a highly fragmented market, there have been several new launches with innovative features and services.”
“Despite intense competition, a fragmented structure and regulatory pressure, the diversity of the population and changing subscriber preferences ensures that there is still space for everyone,” notes Swetha R K. “Strong content strategy and technological innovation will be the key to differentiation.”
Key factors fuelling growth in the European OTT market include:
• OTT/ VOD services being offered by the entire ecosystem of media companies including, Pay TV providers, broadcast networks, OTT portals, and
social media companies
• Expanding Internet penetration levels and demand for travel-friendly options to watch TV that promote online multimedia consumption;
• Innovation in the form of several advanced value-added features and novel business models;
• Diverse international and local content and attractive bundling offers from TV providers that fuel OTT service adoption among a tech-savvy
• Low penetration in Central and Eastern Europe, where demand for local content is booming; and
• Need for an assortment of service providers for different requirements of an OTT video operator, including compression, streaming, real-time
video analytics, user experience, and payment options.
“While the next 12 months hold a promising market outlook for OTT growth, the key to survival and sustenance of growth will depend on how various service providers are able to drive personalization and customization while differentiating their service value proposition, ” reveals Nath.
Nordic TV Summit – exploring Content personalization and customization strategies
According to the new research from Frost & Sullivan, content personalization and customization strategies are crucial for growth. At the annual Nordic TV Summit in Copenhagen, Sept. 28th, we’ll talk more about the need for content personalization and customization strategies, get insight from industry pioneers, share best practice and much more. Visit www.nordictvsummit.com for more details about this must attend event.
Oct 26, 2018
Ad-funded VOD (AVOD) is outpacing other paid media with spend set to double to $47 billion (€41.2bn) by 2023 worldwide, according to WARC’s latest Global Ad Trends report.
More broadly, both consumer and advertiser investment in OTT platforms is rising: globally, spend is projected to reach $129.3 billion in the next five years.
As a medium, AVOD is still young, though notable examples of Hulu, HBO Now, and Sony’s Crackle, as well as reported interest from Amazon, hint at its future power.
Compared to other paid media in WARC’s International Ad Forecast, AVoD is growing faster. The expected $23.8 billion in brand investment that AVoD will receive this year equates to a 5.2 per cent share of global adspend, but spend has increased year-on-year. As a percentage of total OTT spend (estimated by Digital TV Research at $68.7 billion this year – up 29 per cent from 2017), AVoD will account for 34.7 per cent.
“Consumers’ voracious appetite for video content anywhere, on any device, has been propelled by SVoD services such as Netflix. But it is AVoD platforms which present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content,” says James McDonald, Data Editor, WARC. “This is why AT&T and Amazon are exploring moves into the AVOD sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47 billion by 2023.”
At the strategic level, consumers’ appetite for cross-device streaming is creating an impact. A full 81 per cent of consumers now say it is important that they can watch TV programmes whenever they want.
The wide array of publisher specs, insufficient lead time required to track down all creative assets and a lack of standardised measurement when buying cross-channel audience-based inventory are cited as major concerns by practitioners.
As a result, OTT is not currently front of mind when building media strategies; just a quarter (26 per cent) of US CMOs regard OTT as either very or extremely important to their plans. This despite evidence showing integrated campaigns are 31 per cent more effective at brand building.
Source: Report: AVOD spend to double in next 5 years
Apr 22, 2017
Jun 23, 2017