According to new research from The Diffusion Group (TDG), by 2014 more than 360 million households worldwide will own the components necessary to enjoy Over-the-Top (OTT) video services on their TV, with more than half actively receiving OTT services.
The number of broadband-enabled TV households (those with the basic infrastructure to watch OTT video services) will grow from 130 million in 2009 to more than 360 million in 2014, according to TDG’s latest digital media analysis, "Broadband-Enabled TV: Evolution of OTT Hardware Platforms." And the number of active OTT households (those that put this infrastructure to use), will grow from 40 million in 2009 to 170 million in 2014.
"A key reason why many OTT efforts have failed (and will continue to do so) is their dependence on proprietary single-function hardware paid for by consumers," said Colin Dixon, managing partner at TDG, in a statement. "In order to grow a profitable base of service users, OTT operators must either give the hardware away for little to nothing – something upstarts cannot afford to do – or leverage other Internet-enabled platforms as a conduit to the living room. The latter approach is preferable, yet its success hinges on the rate at which these Internet-enabled platforms diffuse – a factor over which OTT providers have little control."
Dixon said that a number of companies including Netflix and the BBC have been embedding their service software in a variety of retail video platforms and are enjoying early success. As normal replacement cycles unfold over the next five years, and as manufacturers accelerate their shift to embedded solutions, the number of households with at least one Internet-enabled living room video platform will grow.