Netflix’s US market share ‘to drop to 50%’

NetflixBuilding41-620x413Netflix’s share of the US over-the-top video market is due to fall from 85% in 2014 to around 50% in 2018 as other online video providers gain traction, according to a new study.

The ‘Prospects for Premium OTT in the USA’ report – conducted by research firm MTM and sponsored by video technology company Ooyala and payment service provider Vindicia ­– claims that though the US online video market has so far been dominated by Netflix, Hulu and Amazon’s bundled offering, a “wide range of new services are expected to launch in 2015/16”.

According to the study, Netflix will remain the “largest single provider” in the US OTT space, but multichannel video programming distributors (MVPDs) will have a “major impact on the dynamics of the market”, while niche services are expected to grow strongly in the next few years.

“The SVOD market has been dominated until recently by Netflix, Hulu, and Amazon – but 2015/16 will see the launch of a wide range of new services, including Dish Network’s Sling TV, Sony Playstation’s Vue offering, HBO Now and CBS All Access. Numerous other studios, technology companies and MVPDs are believed to be planning to launch premium OTT offerings,” the report claimed.

Research respondents predicted that the rise of niche OTT services will create a more fragmented market with “different competitive characteristics”, and anticipated that 15-20 niche services will be able to attract more than 100,000 subscribers.

These will be focused around content such as sports, ex-pat and ethnic programming, music, kids and specialist film and TV content.

“The niche market is expected to grow strongly by 2018 compared to current market revenues. However, the niche market in 2014 is believed to be on the scale of a few hundred million dollars – even major market growth will only make a marginal impact on the overall market size,” according to the study.

The report said that the US OTT market is likely to “continue to grow strongly at a CAGR of 20-30%” and predicted premium OTT revenues will climb from US$4 billion in 2014 to between US$8 billion and US$12 billion in 2018.