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ThE MaStEr

Video entertainment industry adapts to new OTT services


06th.10th.2010


The worldwide video entertainment industry is busy adapting to new Internet-based video services and on-demand viewing of TV and movies, which are having a growing impact on traditional revenues streams, although there is "no certainty of success", according to a new report from In-Stat.

“The decline of retail video disc sales, coupled with on-demand viewing of TV content and the threat of video cord cutting, points to enormous changes ahead for the video entertainment industry,” said Keith Nissen, Industry Analyst at In-Stat. “As new business models emerge, there will be winners and losers, with billions of dollars at stake.”

The report also states that pay-TV operators generated US$ 93bn in 2009 globally, but adds that as TV viewing becomes more splintered and TV monthly rates rise, TV operators are running the risk of subscribers cutting the cord on their pay-TV service. Premium channels such as HBO and Showtime are also described as being in competition with online video subscription services for both subscriber spending and movie licensing rights.

Broadcast TV advertising revenue is believed to be slowly declining as eyeballs shift from pay-TV to online content, the research firm states, while retail video disc sales are predicted to fall by US$ 4.6bn between 2009 and 2014.

The emergence of electronic sell-through for online video purchases and rentals will transform the digital entertainment industry over the next five years, according to the report, which forecasts that online video-on-demand subscription revenues will reach around US$ 3.5bn by 2014.

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Video entertainment industry adapts to new OTT services06


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