Streaming content providers like Netflix and Stan look destined to entrench their positions as the primary mediums through which consumers get their entertainment fix, according to research from analyst firm Ovum.
According to Ovum, almost seven million Australian will be subscribing to an Over-the-Top video service like Netflix by 2020 — a 170 per cent increase compared to the number of end users last year.
The flood of users also translates into a torrent of dollars. The Australian OTT market is expected to generate annual revenues of $1 billion by 2022, more than doubling the 2016 revenues of $460 million.
At a global level, the market for OTT video subscriptions will generate $78bn per year by 2022, when more than 800 million subscribers will buy OTT video.
The opportunity will put demands on telecom operators, established media giants and wholesale broadband networks like the National Broadband Network, in what Ovum analyst Ed Baker said was the best time to “be a viewer”.
“It’s not just the raw subscriber growth that’s impressive. It’s also incredible to see how accessible these services have become,” he told The Australian
“The involvement of network operators is likely to become a growing trend because they see all this video data and most of it’s coming from someone else and they just get the revenue to transport it.”
In Australia, the impact of the OTT appetite is already visible on the NBN: the company’s general manager of product and pricing Sarah Palmer says video content is now a much bigger part of an average user’s diet.
According to NBN, the average end user premises is using 148GB of data per month — a 32 per cent increase on last year.
Before OTT video services arrived in Australia in March 2015, the average monthly usage for NBN end users was about 70GB per month.
“This shows just how important the fast delivery of the NBN is for consumers,” Ms Palmer said.
Ms Palmer rejected claims mixed-technology NBN was not up to the task of meeting the burgeoning demand and said the immediate need was to deliver a reliable, high-quality broadband connection.
“OTT content has a lot of features to be delivered as long as customers have a minimum standard of high-quality broadband and the NBN also has upgrade paths for all of the access technology.”
She said customers needed to work out with their retail service providers what plan suited their viewing habits the best and for the time being the majority of streaming action was likely to be in the fixed broadband space.
“You certainly can’t say the same thing about mobile networks, where we are seeing operators advertise ever faster speeds but still keeping a tight cap on how much data can be consumed.
“Even on a more generous 10GB plan, an end-user couldn’t watch very much streaming video before they have to start worrying about bill shock,” she said.
Reader comments on this site are moderated before publication to promote lively and civil debate. We encourage your comments but submitting one does not guarantee publication. We publish hundreds of comments daily, and if a comment is rejected it is likely because it does not meet with our comment guidelines, which you can read here. No correspondence will be entered into if a comment is declined.
