European OTT Boom Spreads South

Migration from linear to on-demand viewing is in full swing across Europe with the one big exception of premium live sports, which is booming across all video outlets. This has been confirmed by various surveys, with a report from UK media regulator Ofcom finding that overall TV viewing in the UK has dropped dramatically among all viewers.

This trend is strongest among those under 25, who are watching 25% less TV per day than they were in 2010. The decline also continued to accelerate among 16-24 year olds, according to the report, dropping 10.5% between 2012 and 2014.

As part of this trend, younger viewers are abandoning linear TV, with the under 35s saying they now spend just 36% of their viewing time watching live TV, according to the Ofcom report. There is a corresponding increase in uptake of on-demand services, with 6 in 10 adults now using them, and 7 in 10 15 to 34 year olds.

Such trends are reflected more widely across Europe amid expectations of booming OTT video revenues, which are forecast to more than double to $14.6 billion in 2021 from $8.2 billion in 2016 and $6.4 billion in 2015, according to a study just published by Digital TV Research (DTVR). Called Western Europe OTT TV & Video Forecasts this predicts that SVoD will account for 38% of OTT revenues by 2021, around $5.6 billion, but ad-supported video services (AVOD), driven by strong growth in mobile, will make up ground to take about 40% of revenues, or $5.8 billion, by then. Latin countries which have been slowest to adopt OTT, such as France, Spain, Portugal and Italy, will start to make up some ground on the UK, Netherlands and Nordic countries, which have been well in front. However the UK will account for the biggest share of new OTT revenues at $.2.34 billion of the $8.25 billion total added in the region between 2015 and 2021, followed by Germany at $1.34 billion, France $1.13 billion and Italy $0.99 billion.

The DTVR study identified SVoD from the likes of Netflix, Amazon as a major source of OTT revenue growth, but other reports have identified live sports emerging as a crucial service differentiator. The ability to watch premium live events anywhere combined with the escalating value of sports rights is making that a potent combination with OTT. All the leading OTT providers are now looking at how they can exploit the global online sports viewing boom in some way, with even Netflix considering sponsorship of single one off events where it believes it can add value.

Meanwhile Amazon has recruited veteran sports media executive James DeLorenzo to head its newly formed sports group, as part of plans to invest much more heavily on sports programming for its streaming service in a bid to gain a competitive edge on Netflix and Hulu. This has sparked rumors that Hulu will launch a live streaming service in response, in that case providing online access to US TV networks such as ESPN and Fox news.

The same trend is evident in leading European markets, with BT in the UK having offered premium sports content including EFL football free to top tier broadband subscribers in a bid to increase its share of that. What we are seeing overall then is indeed a switch away from linear to on-demand, especially OTT, but mostly only for shows that were already pre-recorded. Events that are broadcast live, as opposed to just linear, are enjoying increased viewing across both broadcast and especially OTT services, above all sports but also to an extent front line news. 

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