OTT video numbers rising as consumers cut the cord, according to eMarketer’s latest forecast

Almost 765m people worldwide will use a subscription over-the-top (OTT) video service at least once per month in 2018, according to eMarketer’s latest forecast. This total will represent 10.2 per cent of the global population and 32.1 per cent of digital video viewers worldwide.

The analyst estimates the global subscription OTT market will grow by 24 per cent this year, thanks to increasing internet penetration, faster speeds and a broader shift toward internet entertainment.

The share of Netflix users among subscription OTT video service users worldwide will total nearly 44 per cent this year. The US, where Netflix is based, will account for 44.4 per cent of its global audience.

Netflix’s popularity in its home market is partly attributed to the growing cord-cutting trend and declining interest in cable TV packages in favour of paid OTT subscriptions. eMarketer expects that almost 13 per cent of US households will cut the cord in 2018. This is not an issue in Europe and Asia-Pacific, where cable services are considered much more affordable.

eMarketer notes that Netflix is particularly popular in Nordic countries, where the OTT markets are very advanced and there is a high concentration of broadband access. In Germany, viewership has experienced a strong increase in the past year since Netflix released its first original German-language series and debuted popular series like “House of Cards” and “Stranger Things” in the market. Furthermore, the lack of commercials on subscription OTT platforms has appealed to the privacy preferences of many consumers in Germany.

Australia has the highest Netflix usage in Asia-Pacific, with the country’s strong OTT market a key factor in adoption. In addition, Netflix’s strategy to partner with telco providers has helped grow its footprint among consumers in Australia.

Conversely, France has failed to adopt Netflix at a high level and ranks last in usage among countries in Western Europe. This could be attributed to consumer preference for dubbed rather than subtitled content, the former of which is more expensive and takes longer to create. In addition, French law mandates that films cannot appear on streaming services for 36 months after their theatrical release.

“Netflix is banking on an aggressive strategy to grow its international business,” said eMarketer forecasting director Shelleen Shum. “Plans to beef up local content and deals with telcos to include Netflix in unlimited streaming packages will help growth remain strong for the next two years. Amazon Prime Video, which extended its offering to many international markets in late 2016, will also be a strong competitor for Netflix in the coming years.”

The top five countries for Netflix user penetration, by percentage of digital video viewers are the US (65 per cent); Norway (62 per cent); Canada (56 per cent); Denmark (55 per cent); and Sweden (50 per cent). The UK is in tenth place on 34 per cent.

Source: Mobile Marketing Magazine

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