The new year is right around the corner, and with that comes more change – and growth – in OTT or “over-the-top” streaming services and content. As Opera TV continues to make strides in a number of areas, we anticipate several key trends across the industry in 2017.
The most evident trend we will see is that next-generation broadcasting will revolutionize the living room viewing experience driven by consumer’s change in OTT consumption habits by trading off bundled packaged for more flexible OTT subscriptions. This change has started to get major pay-TV operators attention and the need to adapt immediately. Service providers like Comcast, AT&T and TiVo among others have included must-have OTT services such as YouTube and Netflix as part of their offering Moreover, current and new OTT consumers alike will have growing expectations and standards for their OTT experience.
We know that today’s consumers want easy and effortless access to OTT content from the devices and services they already have in their homes, and they want access quickly. We believe we are going to start seeing OTT platforms being integrated into connected devices all the way down to the chip level. This will positively influence cost savings and reduce the time-to-market for connected device manufacturers and content providers alike, and will ensure immediate access to premium OTT content for consumers.
Standards for hybrid broadcasting will evolve, too, both in the U.S. and in Europe. In fact, it’s already happening. Hybrid broadcast broadband TV (HbbTV) recently released HbbTV 2, building on the success of the previous version with unique features such as media synchronization and companion screen integration that bring value to customers, broadcasters, pay-TV operators and OTT providers alike.
In the U.S., ATSC 3.0 is combining the licensing agreements behind pay-TV and the software behind OTT platforms to create a new IP-based standard of Broadcasting TV, providing consumers with both live and OTT experiences in one single service that is easy to manage. More importantly, ATSC 3.0 is a complete living room revelation. Last year approximately 76 percent of U.S. households subscribed to cable, satellite or fiber for TV, while 21 percent relied on antenna reception for at least one TV in the home. That antenna number went up four points compared to 2014, according to the Consumer Technology Association.
Pay-TV providers know the OTT era has arrived, and they will look for more ways to adapt and accelerate the integration of live and OTT into one experience. It’s no secret that many consumers are unbundling themselves and switching to a less expensive combination of broadband and subscription OTT services over pure Pay TV subscriptions, while some others are choosing to spend more in total, to complement their existing Pay TV subscription. In fact, more than half of the TVs shipped in Q1 of 2016 were smart. In North America, 56 percent of TV shipments were smart TVs in the quarter, according to IHS. Pay-TV providers have already started to make moves to heed this trend, particularly with mergers and acquisitions that bring them closer to content ownership, like AT&T’s acquisition of Time Warner in October 2016. This type of activity will only continue.
What this means for subscription OTT services is more growth, not just in 2017, but in the years going forward. According to RnR Research, the global OTT market is expected to reach $62 billion by 2020, growing at an estimated CAGR of 17.2%. The adoption of subscription OTT services varies around the world, but we expect it to only grow across the globe.
Finally, we expect to see increased participation in certification programs enabling app developers to easily develop and deploy the same HTML5 applications across certified platforms and devices. This will reverse the current lack of a unified approach among OTT app developers to develop, test, verify and certify their HTML5 apps across connected TV devices spanning multiple vendors and industries, due to each having different flavors of video streaming and HTML5 capabilities. Having a pre-defined process of verification and certifications on apps and devices will increase efficiency in the time-to-market and significantly reduce development costs. We at Opera TV are seeing solid growth with our own certification program, and we look forward to sharing more details in the weeks to come.
It’s going to be a big year for OTT and that excites us at Opera TV. We hope you will continue to join us advance this industry.