Premium OTT Market to Experience Rapid Growth by 2017 Despite Barriers to Entry, New Study Reveals

REDWOOD CITY, California, November 25, 2014 /PRNewswire/ --

Pan-European OTT Study conducted by MTM for Vindicia and Ooyala indicates growth trajectory of 80% in the next 3 years 

Vindicia, a leader in enterprise-class subscription billing, and Ooyala, the leading innovator in video streaming, personalisation and analytics, have today announced the results of a qualitative pan-European study that looks at the current premium service OTT market and its projected growth in the UK, Dutch and German regions by 2017. The study revealed that, while industry leaders are aware of the challenges when targeting the mass market with film and TV content, premium OTT technology continues to advance in Western markets. It also indicates that in addition to the subscription business model, there will be significant opportunities for content providers to increase monetisation of video content, in the form of transactional services, ad-supported offerings and hybrid bundles.

Conducted by MTM, one of the United Kingdom's top research and strategy consultancies, and involving 30 OTT service providers in the UK, Dutch and German markets, the research revealed that despite a number of barriers to entry, industry participants expect to see steady growth of premium OTT service in all three European regions. In fact, the UK market is expected to grow from £110-130 million in 2013 to £390 million in 2017, while the Dutch market is expected to grow from €15-20 million in 2013 to €190 million in 2017. Industry participants expect to see slower growth in Germany, with the premium OTT market expected to increase from €30-35 million in 2013 to €117 million in 2017. Lower broadband penetration in Germany is a contributor to the region's slower growth rate.

"The next three years will be a real turning point for the premium OTT market," said Gene Hoffman, chief executive officer and chairman at Vindicia. "Broadband penetration levels are rising, connected devices are becoming increasingly accessible and favourable regulations are being introduced, which is paving the way for OTT providers. The emergence of leading players, such as Netflix, is also fuelling competition and investment in premium OTT business models, while at the same time driving consumer awareness and adoption."

According to premium OTT service providers, other barriers include exclusivity of access to high-quality, high-appeal content, consumer consciousness and cultural factors. Exclusivity in particular is a primary battlefield for mass-market services, with content licensing costs inflating as large OTT businesses, including Netflix and Amazon, invest in long-term, exclusive and global studio licensing deals. At the other end of the market, those building out niche subscription businesses will need access to high-value, high-volume specialist content.

With regards to consumer barriers, industry participants state that while awareness is growing, consumers are slowly migrating from free VOD services and pirated content to premium paid-for video content.

"OTT providers and new entrants face daunting challenges, however with the right approach and level of investment, the rewards will be substantial," said Jay Fulcher, president and chief executive officer of Ooyala. "Technology itself is becoming less and less of a barrier and as time goes on, we will start to see providers throw large amounts of money at OTT in a bid to differentiate themselves from the competition. Because of this, consumers will have higher expectations when it comes to user experience and quality of service, which will put significant pressure on providers to discover the most cutting edge technology. In effect, demand and innovation will go hand in hand."

The study finally addressed the ways providers can monetise their OTT services, with industry participants stating that, in order to succeed, premium subscription OTT must be regarded as one of many ways to profit from video content.

The full report can be downloaded here: http://go.ooyala.com/wf-mtm-vod.html

About Vindicia 

Vindicia brings enterprise-class innovation to consumer-facing subscription billing to help digital companies acquire and retain more customers by making payments seamless, secure and easy. Vindicia keeps customers connected to the subscription services they love, and companies connected to the subscription revenues they need. Vindicia has processed more than $6 billion globally and generates over $90 million in annual incremental revenue for clients. Clients include TransUnion Interactive, Intuit, Activision, Blizzard, IAC, Bloomberg, Vimeo, Next Issue Media and more. Vindicia was recently ranked the number one billing software solution on the market by Business-Software.com, and recognized as a "Top 100 Promising Tech Companies" by CIOReview magazine. For more information visit http://www.vindicia.com.

About Ooyala 

Ooyala, a subsidiary of Telstra Corporation Limited, delivers personalized video experiences across all screens and is a leader in online video management, publishing, analytics and monetization. Ooyala's integrated suite of technologies and services gives content owners the power to expand audiences through deep insights that drive increased viewer engagement and revenue from video.

Companies using Ooyala technology include Univision, Foxtel, Comedy Central, NBC Universal, Telstra, ESPN, Telegraph Media Group, Telefonica, The North Face, Rolling Stone, Dell and Sephora. Headquartered in Silicon Valley, Ooyala has offices in New York City, London, Sydney, Tokyo and Guadalajara, Mexico. The company works with premier reseller and technology partners throughout the Americas, Europe, Africa, Japan and the Asia-Pacific region.

For more information, visit http://www.ooyala.com .

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