The rapid development of the internet and digital technology has resulted into fast growing OTT (over-the-top) in emerging market. A report by Pyramid Research cumulative OTT revenue from subscription video on-demand and television video on-demand will reach nearly $19 billion between 2015 and 2019. More on OTT solution, visit: https://www.vindicia.com/solutions/ott-monetization-solutions/

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OTT Content
Growing Rapidly in
Emerging Markets
© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

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OTT Content Growing Rapidly in Emerging Markets
© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
Over-the-top content is growing fast thanks in part to the rapid development of the
Internet and digital technology. In the U.S., OTT is not a new capability. However, in
emerging markets around the world, OTT is a possible reality.
According to a recent Pyramid Research report, cumulative OTT revenue from
subscription video on-demand and television video on-demand will reach nearly $19
billion between 2015 and 2019, with 80 percent of the volume coming from the
emerging markets in Asia-Pacific and in Latin America. Across emerging markets in
general, Pyramid Research says SVoD accounts will increase more than five-fold
between 2014 and 2019.
Among all the emerging markets evaluated, China, Russia, Brazil and Mexico offered
the most scale and growth potential over the next five years, the study added.
Internet bolstering OTT and VoD
As broadcasting capabilities in developed countries continues to grow and innovate,
similar growth in emerging markets – whose broadband infrastructure is quickly
improving – will likely follow. Development in network speed, performance and security
have opened up new doors in both established and emerging economic landscapes
across the globe to provide streaming video content over the Web. While advertising is
helping fund current OTT and video on-demand services, subscription-based models
are quickly gaining traction and providing an alternative revenue stream for providers.

3. 3© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
These paid models are growing in popularity within hybrid business models, the study
found. These services offer free content with limited advertising, but also offer premium
services and the chance to subscribe to avoid video ads. In the past, OTT content
providers that have relied completely on advertising struggled due to the high price of
content.
Subscription-based services growing
Since advertising hasn't been able to sustain OTT and VoD content, subscription-based
services are growing in popularity. In fact, citing separate Pyramid data, Home Media
Magazine reported OTT video is projected to grow to 6.4 percent of emerging market
households, or close to 103 million in total, by the end of 2019. In 2014, SVoD services
were available to just 1.3 percent of emerging market households, with a user base of
19.4 million.
Popular subscription-based VoD provider Netflix plans to operate in 200 countries by
2017, Home Media Magazine added. The total paid OTT revenue is expected to
represent 7 percent of regional pay-TV revenue in the next five years due to rising
licensing costs for content. As a result, emerging markets are turning to ad- and
subscription based OTT video platforms.

4. 4© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
"We are witnessing the emergence of hybrid [business] models, whereby services offer
free content to expand the user base," Daniele Tricarico, senior analyst at Pyramid
Research, said in a statement. "But at the same time position premium SVOD and
transactional VOD services to generate additional revenue.“
While mobile technology is growing in importance, it looks as if Wi-Fi will remain a
primary driver for OTT growth in both emerging and developed economies, especially
as broadband infrastructure continues to develop and grow to meet fluid consumer
needs.

5. 5© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
About the Author: Bryta Schulz
Bryta joined Vindicia in 2013 and serves as Senior Vice
President of Marketing. She is responsible for building brand
awareness, creating go-to-market strategy and promotion, and
driving growth. With over a decade of executive level marketing,
product management and PR experience, Bryta has led
marketing teams in enterprise technology and SaaS companies.
Her experience includes heading product marketing at GoGrid,
PGP, RSA and Symantec and business development and
product management positions at Xcert, Thales, and
Persistence Software. Bryta holds a MA in Translation from the
Johannes Gutenberg University Mainz and an MBA from the
University of Reutlingen.
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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.