Premium OTT Market in the US to Reach $21B by 2020, Report Says

Netflix, Amazon and Hulu expected to drive a majority of growth, but niche streamers like Crunchyroll will also contribute

Premium OTT
Credit: Flickr / Mike MackKenzie

Surprise, surprise — the adoption of over-the-top (OTT) video platforms is on the rise. More consumers are opting out of their cable contracts in favor of more affordable streaming options like Netflix and Hulu. And this increase of adoption is poised to put the premium OTT market in the US at $21 billion by 2020, according to a new report, “The Prospects for Premium OTT,” produced by the research firm MTM and released Thursday. That’s up from $16.4 billion in 2017.

The study, which conducted research and in-depth interviews with a cross-section of senior industry participants in the U.S., suggests that Netflix, Amazon, and Hulu will dominate in terms of subscriber numbers, but growth is also expected to come from direct-to-consumer offerings from the likes of Disney and HBO, as well as niche services such as Ellation-owned Crunchyroll.

The study estimates that OTT TV services like YouTube TV, SlingTV, and DirecTV Now will play a large role in the growth of the premium OTT market, especially considering the increasing amount of consumers who are ditching their cable packages. It is estimated that this year alone, 33 million adults will cut the cord, according to estimates from research firm eMarketer.

“OTT linear is going to make a very big appearance towards the end of 2018,” the report notes. “When you talk about disruption, it is going to happen via a linear channel. There is going to be innovation to help elevate linear channels – it’s going to be a new type of linear experience.”

Live sports delivered via OTT are also expected to drive further growth in premium OTT revenues by 2020, the study notes.

MTM is an international research and strategy consulting firm. In Q2 2018, Vindicia commissioned MTM to explore the development of premium OTT services across four regions: Western Europe, USA, Latin America and Asia Pacific. “The Prospects for Premium OTT” was a follow-up to a series of regional reports published between 2014 and 2016 with a similar focus. View the full report here.