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If your idea of watching TV involves the terms “binge-watching” and “Netflix”, and if you’re completely baffled by the sight of ad break, then well done: you’re ahead of what is set to be a massive wave of people subscribing to over the top video services.
New data from Juniper Research has shown that subscriber numbers to ‘over-the-top’ (OTT) TV services such as Netflix and Amazon Prime will increase from 92.1-million in 2014, to 332.2-million globally by 2019.
Continued growth in the North American market will see it remain as the leading region in terms of subscriber numbers, but closely followed by the Far East, as this region emerges with new services and increased consumer interest.
People aren’t just using smart TVs to access these new digital services either. The research observed that with the long lifecycle of TV’s, previously ‘dumb’ TVs will see an upsurge in becoming ‘connected’ due to the cost-effectiveness of devices such as Chromecast, and Amazon’s Fire TV Stick, as well as the high uptake of games consoles and STBs which provide preloaded services.
In fact, the add-ons that make “dumb” TVs smart, can sometimes be preferable to actual to smart TVs, which currently offer poor operating systems and user interfaces.
Can the traditionals survive?
In such a disruptive space, any player resting on its laurels is doomed to failure. In the US, for instance, Verizon has begun bundling cheaper packages, minus sports channels. This has led to incumbents arguing amongst themselves, as well as enraging the sports TV providers ESPN and Fox Sports. Meanwhile, OTT players continue to strengthen their market position.
Another interesting insight to emerge from the research is that ad spend on ‘Video on Demand’ is to grow almost fourfold by 2019, with the Far East and China dominating the market by the end of the forecast period.