Consumers spent $3.5bn on online video services in 2011- report


Global consumer spend on online video has exploded in 2011, reaching $3.5bn in total for the year, according to new research. The study, entitled Global OTT Video Forecast: Q4 2011, from Strategy Analytics, found that subscriptions rather than one-off transactions will drive the growth over the next few years.

While transactional revenue growth is slowing in maturing territories, subscription revenues driven by specialists – such as Netflix, Lovefilm and Hulu – will grow as service providers target new markets.

The Netflix entry into the UK in 2012 will sharpen an already competitive market as OTT services ramp up availability across a range of connected devices. Movie studios and other content owners are also likely to benefit as competition to secure the best movie and TV content intensifies.

“Despite healthy growth in 2011 across most major markets, online video revenues will still struggle to compensate for long-term declines in packaged video spending for years to come,” said Ed Barton, Director of Digital Media at Strategy Analytics. “Online retail growth in particular is flattening in maturing markets. In what is becoming a recurring theme, consumers do not value ownership of digital media to the same extent they did for packaged media.”

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