The battle for web TV: Can Disney and Apple topple YouTube and Netflix?

Nov 11, 2019 | Content marketing, E-commerce, Video

The battle for web TV: Can Disney and Apple topple YouTube and Netflix?
The global battle for direct-to-consumer video supremacy is shaking up, with big new players such as Disney and Apple TV+ entering the fray. New research looks into the global landscape for the future of video.

The study, from IHS Markit, indicates that Facebook, Apple, Amazon, Netflix and Google (FAANG) are set to account for 63% of global OTT subscription revenue this year, a total that will largely hold steady through 2023, when these companies will represent 60 percent of the market, according to the World Information Series–Service Provider (WIS-SP) service from Ovum.

Moreover, FAANG video services, predominantly Google’s YouTube and Facebook Video, will account for 43 percent of advertisement-based video on demand (AVOD) services in 2023, up from 39 percent in 2019.

“FAANGs include the most innovative, disruptive and largest companies ever to compete in entertainment distribution,” said Ed Barton, chief analyst of Ovum’s Consumer and Entertainment team. “These companies have built dominant positions in the key growth segments of video distribution: OTT subscriptions and advertising. This situation is making life very hard for competing video services seeking to gain a foothold.”

Studio giants and broadcasters are launching a slew of significant OTT video services heading into 2020, including Disney, Warner Bros., NBC, ITV and Discovery. The next five years will see unprecedented competition with huge investments in OTT video technology, original and exclusive content and subscriber acquisition promotions. These promotions include Verizon’s offer of 12 months of free Disney+ to around 50 million U.S. mobile subscribers.

This is likely to accelerate declines in traditional pay TV while making life unbearable for smaller video platforms that either cannot or will not sustain multi-year losses in order to survive.

PlayStation’s Vue has announced it will close in January 2020 after failing to find a buyer, and failing to top 1 million subscribers in its four-year lifespan. Meanwhile, Walmart is seeking buyers for its transactional video service, Vudu.

“The FAANGs are feasting while entertainment giants prepare to lose billions of dollars establishing direct-to-consumer video platforms,” Barton said. “The entire OTT video industry is likely to be loss-making until the mid-2020s. The companies left standing in 2025 will have the opportunity to fashion the long-term future of visual entertainment distribution, but they will have paid a very high price.”


The Ovum World Information Series–Service Provider service

Enabling in-depth analysis of service provider markets, the World Information Series –Service Provider (WIS-SP) is home to Ovum’s strategic datasets addressing the mobile, fixed, TV and video markets. The WIS-SP is the industry’s most powerful data and forecasting service, providing comprehensive historical market data and five-year forecasts, with detailed service provider metrics and KPIs.

All topics

Previous editions

Get email edition