In the US, just four companies – Facebook, Amazon, Netflix, and Google – will harvest up to two-thirds of all new TV and video revenue in 2018. Their gains will be due partly to the saturation of traditional TV in the country, but also to their growing domination of the OTT video market. Amazon and Netflix will take 69 percent of OTT subscription revenue, while Google and Facebook will corner 45 percent of OTT in-stream video advertising (also known as advertising-funded video on demand) spend, claims Ovum.
Amazon will overtake Netflix to generate more OTT video revenue in 2018 thanks to its “growing array of ways to pay for video.” Amazon’s combination of subscriptions, digital rentals, electronic sell-through and bundles of TV apps will see it generate US $5.8 billion in video-related revenue next year. It forecasts Netflix will generate $5.3 billion in revenue through its subscription-only model.
Netflix still won’t have a majority of OTT video subscribers in at least 19 countries by the end of 2018, with local providers to hold the top spot in various markets – such as Ipla in Poland, Showmax in South Africa and Iflix in Indonesia.
Possibly adding another A to FANG, Apple will finally launch a new premium OTT service, initially in the US, as its share of US online video revenues via iTunes sales declines to less than 4 percent in 2018. Facebook’s ad-supported Watch video platform to go international next year, but to have “minimal” global impact.
OTT TV Everywhere is being monitored by our team for local markets and will certainly be part of media usage for our clients moving forward. For some, as early as April. For others, we will make recommendations to reallocate certain media spending by September 2018. More details to follow.