7% of U.S. households have broadband and OTT but no pay TV

New data from Parks Associates (www.parksassociates.com) finds global OTT [over-the-top] video service subscription revenues will increase from nearly US$9 billion in 2014 to over $19 billion in 2019.

Currently, 57% of U.S. broadband households subscribe to an OTT video service. Among European broadband households, 57% in the U.K., 29% in Spain, and 24% in Germany subscribe to an OTT service. The research group also finds that in 2015, approximately 7% of all U.S. households, or 8.4 million households, subscribe to broadband and at least one OTT video service but do not subscribe to pay TV.

This figure includes consumers who have discontinued pay-TV service and those who have never subscribed to pay TV. In other Western nations, this same figure is approximately 4% or less among all households. Operators are introducing their own OTT services to appeal to consumers who are not currently taking pay TV.

“The OTT video services marketplace continues its rapid rate of change, impacting the video ecosystem across world markets,” says Brett Sappington, Director of Research, Parks Associates. “While operator attempts at TV Everywhere have made little impact, OTT video services are experiencing a boom. A variety of new players are entering the market, and operators including DISH Networks, Rogers Communication, Bell Canada, and Sky are responding with OTT video services of their own. How the industry responds to this change will ultimately affect the fundamental structure of the video industry for years to come.”

The Parks Associates OTT report examines the current and future market environment for video services that provide consumers with access to TV and programming via Internet-connected devices. It examines the relationship between TV Everywhere and OTT services, consumer demand and habits, business models, emerging services, threats, success factors, and future growth.

“Avid video consumers are still taking pay-TV services if they can afford them. However, companies in the in the video ecosystem are eager to reach those consumers who are currently falling through the pay-TV cracks,” Sappington says.