OTT Video in Emerging Markets : Monetization Strategies and 5-Year Revenue Opportunity


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Pyramid Research

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OTT Video in Emerging Markets: Monetization Strategies and 5-Year Revenue Opportunity,” a Research Report by Pyramid Research, analyzes the revenue potential of OTT video services across emerging markets in Africa and the Middle East, Asia Pacific, Central and Eastern Europe, and Latin America, identifying and mapping key OTT video players from local telcos and payTV providers to pure-play OTTs, and best practices for differentiation and OTT video monetization. The report provides 5-year projections for SVoD and TVoD accounts and revenue by region and for key countries including Brazil, China, Mexico, Russia, Saudi Arabia and South Africa. The analysis is built upon in-depth case studies of Netflix Latin America, Clarovideo, OSN Go, iRokoTV, Ivi Russia and LeTV.

 

Key Findings

 

  • The growing investment in broadband infrastructure, with the improvement in network speed and performance, has opened up new opportunities to provide video over IP, not only in more advanced, developed economies but also in emerging markets.
  • OTT video is mostly advertising-funded across emerging markets, but paid models are gaining traction within hybrid business models, whereby services offer free content to expand the user base, but at the same time position premium transactional video on demand (TVoD) and subscription video on demand (SVoD) content to generate additional revenue. In recent years, OTT business models entirely relying on advertising revenue streams have become difficult to sustain, given the high cost of content. 
  • Across emerging markets, we expect SVoD accounts will increase more than five-fold between 2014 and 2019; the proliferation in China of hybrid models combining AVoD and SVoD will be a major driver for growth. The cumulative paid OTT revenue from SVoD and TVoD services is projected to be as much as US$18.8bn for the 2015-2019 period, over 80% of which will come from the emerging markets in Asia Pacific and Latin America. Among all emerging markets examined, China, Russia, Brazil and Mexico offer the most scale and growth potential over the next five years.
  • The opportunity to position SVoD and TVoD services successfully is stronger for local companies, provided that they have enough funding to invest in attractive content, and that they can deploy sustainable business models for paid content.
  • In spite of the growing importance of mobile, with increasing 4G take up, the bulk of OTT video usage will remain over fixed broadband networks, with WiFi representing a key enabler technology for nomadic usage on secondary screens.
  • In order to reinforce their market position, all pay-TV operators should consider aggregating third-party OTT services within the main service portfolio in addition to standalone OTT propositions.

 

Synopsis

 

The “OTT Video in Emerging Markets: Monetization Strategies and 5-Year Revenue Opportunity” report offers an in-depth examination of the OTT video market trends, ecosystems and business models in emerging regions, highlighting unique challenges to such market environments and best practices for effectively positioning OTT video propositions. The report provides demand and revenue forecast for subscription video on demand (SVoD) and transactional video on demand (TVoD) for Africa and the Middle East, Emerging Asia Pacific, Central and Eastern Europe and Latin America. Country-level forecasts are included for key markets including Brazil, China, Mexico, Russia, Saudi Arabia and South Africa. 

 

The report is structured as follows:

 

Section 1: OTT Video Market Trends and Monetization Strategies in Emerging Markets ? Challenges and opportunities for OTT service providers, positioning strategies for pay-TV operators and effective business models for OTT video provisioning.

 

Section 2: SVoD and TVoD Demand and Revenue Outlook Across Emerging Markets ? Overview of forecast assumptions and covered countries and regions, review of SVoD accounts and paid OTT video revenue per region.

 

Section 3: OTT Video Opportunity, Competitive Landscape and Keys to Success in Latin America; including region-level market overview and trends as well as deep-dive analysis of the region’s largest markets Brazil and Mexico and key players Netflix Latin America and Clarovideo.

 

Section 4: OTT Video Opportunity, Competitive Landscape and Keys to Success in Africa and the Middle East; including region-level market overview and trends as well as deep-dive analysis of Saudi Arabia and South Africa and key players OSN Go and iRokoTV.

 

Section 5: OTT Video Opportunity, Competitive Landscape and Keys to Success in Central and Eastern Europe; including region-level market overview and trends as well as deep-dive analysis of the region’s largest market Russia and a key player Ivi Russia.

 

Section 6: OTT Video Opportunity, Competitive Landscape and Keys to Success in Emerging Asia Pacific; including region-level market overview and trends as well as deep-dive analysis of the region’s largest market China and a key player LeTV.

 

Section 7: Key Takeaways and Strategic Recommendations for OTT Video Service Providers.

 

Reasons To Buy

 

  • The “OTT Video in Emerging Markets: Monetization Strategies and 5-Year Revenue Opportunity” report provides a comprehensive examination the nascent OTT video market opportunity to help executives make informed investment decisions, develop effective partnerships and optimize return on investment.
  • This report provides a five-year forecast of SVoD accounts and SVoD and TVoD revenues by region and for key countries across emerging regions to enable executives effectively position their companies for emerging trends in demand for OTT video and growth opportunities.
  • The report incorporates in-depth overview of key challenges and business model trends in the OTT video market across emerging markets and best practices for monetizing OTT video for stakeholders to develop competitive strategies as well as differentiation. 

Table of Contents

 

Executive summary

 

Section 1: OTT Video Market Trends and Monetization Strategies in Emerging Markets

Definitions: OTT video pricing and models 

Definitions: OTT service providers

Definitions: Content provision in the connected era

Challenges and opportunities for OTT service providers

Content procurement

Piracy and payments 

The role of legacy broadband and the mobile opportunity

Positioning strategies for pay-TV operators

Monetizing OTT video

 

Section 2: SVoD and TVoD Demand and Revenue Outlook Across Emerging Markets

Key forecast assumptions

Regions and countries covered

Emerging markets: SVoD accounts by region

Emerging markets: SVoD penetration of households by region

Emerging markets: Paid OTT video revenue forecast by region

Emerging markets: Paid OTT revenue relative to pay-TV revenue

 

Section 3: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Latin America

OTT video market overview

SVoD accounts forecast 

Paid OTT video revenue forecast 

Key market trends 

Mexico: OTT video market overview

Mexico: Paid OTT video accounts and revenue forecast

Mexico: Key market trends

Brazil: OTT video market overview

Brazil: Paid OTT video accounts and revenue forecast

Brazil: Key market trends

Case studies: 

Netflix LATAM: Content and partnerships and business outlook 

Clarovideo: Content and partnerships and business outlook 

 

Section 4: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Africa and the Middle East

OTT video market overview

SVoD accounts forecast 

Paid OTT video revenue forecast 

Key market trends 

South Africa: OTT video market overview

South Africa: Paid OTT video accounts and revenue forecast

South Africa: Key market trends

Saudi Arabia: OTT video market overview

Saudi Arabia: Paid OTT video accounts and revenue forecast

Saudi Arabia: Key market trends

Case studies: 

OSN Go: Content and partnerships and business outlook 

iRokoTV: Content and partnerships and business outlook 

 

Section 5: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Central and Eastern Europe

OTT video market overview

SVoD accounts forecast 

Paid OTT video revenue forecast 

Key market trends 

South Africa: OTT video market overview

Paid OTT video accounts and revenue forecast

Russia: OTT video market overview

Russia: Paid OTT video accounts and revenue forecast

Russia: Key market trends

Case study: 

Ivi Russia: Content and partnerships and business outlook 

 

Section 6: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Emerging Asia Pacific

OTT video market overview

SVoD accounts forecast 

Paid OTT video revenue forecast 

Key market trends 

South Africa: OTT video market overview

Paid OTT video accounts and revenue forecast

Key market trends

China: OTT video market overview

China: Paid OTT video accounts and revenue forecast

China: Key market trends

Case study: 

LeTV: Content and partnerships and business outlook 

 

Section 7: Key Takeaways and Strategic Recommendations for OTT Video Service Providers

Appendices

Companies mentioned

Sources and related research

About Pyramid Research

Ex 1: OTT Video Business Models 

Ex 2: OTT Content Providers 

Ex 3: OTT Content Provision for the Connected Household 

Ex 4: OTT Video Challenges and Opportunities In Emerging Markets 

Ex 5: OTT Video, Cost and Revenue Scenario (MGs) 

Ex 6: Cost & Revenue Scenario (MGs Diluted, CPS) 

Ex 7: Converging Content Propositions 

Ex 8: Major Types of Streaming Content on Netflix 

Ex 9: Home Video Content, Legal and Illegal in Emerging Markets 

Ex 10: Broadband Penetration in Emerging Market Regions 

Ex 11: Applications and Bandwidth Requirements 

Ex 12: Key LTE Services for the Consumer Segment 

Ex 13: LTE Subscribers by Region, 2013-2019 

Ex 14: OTT/VoD Growing Usage, UK Benchmark 

Ex 15: Telefonica, Unified Multi-Technology Global Video Delivery Platform (GVP) 

Ex 16: OTT Strategic Options for Pay-TV Operators 

Ex 17: SVoD Accounts by Region 

Ex 18: SVoD Penetration of Households by Region 

Ex 19: Paid OTT Video Revenue (SVoD and TVoD) By Region 

Ex 20: Paid OTT Revenue (SVoD and TVoD) As a Percentage of Pay-TV Revenue 

Ex 21: LATAM, Selected OTT Services 

Ex 22: SVoD Growth in LATAM 

Ex 23: OTT Revenue Opportunity in LATAM 

Ex 24: Share of Paid OTT SVoD/TVoD Revenue, Brazil, Mexico and Rest of LATAM 

Ex 25: Main OTT Video Service Providers in Mexico 

Ex 26: Share of Paid OTT by Accounts 

Ex 27: Mexico Paid OTT Accounts 

Ex 28: Mexico OTT Revenue Opportunity 

Ex 29: Cinepolis and Vudu Prepaid Cards in Mexico 

Ex 30: Main OTT Video Service Providers in Brazil 

Ex 31: Broadband Video Opportunity in Brazil 

Ex 32: Brazil Paid OTT Accounts 

Ex 33: Brazil OTT Revenue Opportunity 

Ex 34: 4G Opportunity in Brazil 

Ex 35: Netflix SVoD Service Pricing Across Markets, December 2014 

Ex 36: Netflix Marketing Spend As % of Revenue 

Ex 37: Netflix Partnership with Antel Uruguay 

Ex 38: Netflix Prepaid Card in the US 

Ex 39: Netflix Subscribers by Region 2014 

Ex 40: Broadband Penetration of Households, 2013-2019 

Ex 41: Clarovideo, Monthly Subscription Pricing 

Ex 42: Clarovideo Footprint, December 2014 

Ex 43: Clarovideo Smart TV Advertising 

Ex 44: Clarovideo Colombia Discount Offer 

Ex 45: Clarovideo Telmex Promotion, 2012 

Ex 46: AME, Selected OTT/SVoDs 

Ex 47: SVoD Growth in AME 

Ex 48: OTT Revenue Opportunity in AME 

Ex 49: AME OTT Market Potential, 2014 & 2019 

Ex 50: South Africa OTT Video Service Providers

Ex 51: South Africa Paid OTT Accounts 

Ex 52: South Africa OTT Revenue Opportunity 

Ex 53: Fixed and Mobile Broadband Opportunity In South Africa

Ex 54: Saudi Arabia OTT Video Service Providers 

Ex 55: Saudi Arabia Paid OTT Accounts 

Ex 56: Saudi Arabia OTT Revenue Opportunity 

Ex 57: Piracy Workarounds by Expat Segments 

Ex 58: Wherever TV Channel Line Up 

Ex 59: OSN Go by OSN Market, 2014 

Ex 60: Promotional Material, OSN Go Partnership with Vodafone Qatar 4G 

Ex 61: AME Smartphone Sales, 2014-2019 

Ex 62: Film Production by Content Hub In 2013 

Ex 63: iRokoTV Pricing (US$) 

Ex 64: Nollywood Content on iRokoTV 

Ex 65: Nigeria Android Smartphone Sales, 2014-2019 

Ex 66: CEE, Selected OTTs 

Ex 67: SVoD Growth in CEE 

Ex 68: OTT Revenue Opportunity in CEE 

Ex 69: Fiber Broadband in CEE 

Ex 70: Fixed Broadband Download Speed, CEE Global Rankings 

Ex 71: Russia OTT Video Service Providers 

Ex 72: 2014 Share of Registered OTT Accounts 

Ex 73: Russia Paid OTT Accounts 

Ex 74: Russia OTT Revenue Opportunity 

Ex 75: ARPU of Paid OTT Services

Ex 76: The OTT/Telco Partnership Value 

Ex 77: Ivi Unique Monthly Viewers by Platform 

Ex 78: Ivi TVoD Vs SVoD Pricing 

Ex 79: Ivi’s Main Content Partners 

Ex 80: Smartphone Shipments in Russia, 2010-2014 

Ex 81: Monthly Views on Non-Pc Devices, 2011-2013 

Ex 82: Emerging APAC, Selected OTT/SVoDs 

Ex 83: SVoD Growth in Emerging APAC 

Ex 84: OTT Revenue Opportunity in Emerging APAC 

Ex 85: LTE in Emerging APAC 

Ex 86: China, Content Partnerships of Top 5 OTT Video Service Providers 

Ex 87: China Paid OTT Accounts 

Ex 88: China OTT Revenue Opportunity 

Ex 89: Challenges and Opportunities for Paid OTT Video in China 

Ex 90: LeTV Subscription Pricing 

Ex 91: Hours of Video Viewed, Jul-Aug 2014 

Ex 92: NBA on LeTV 

Ex 93: LeTV SmarTV 84

Ex 94: LeTV Profit & Revenue, 2012-2013 

Ex 95: LeTV Month-End Stock Price, 2014