A new study from Juniper Research has found that consumer spend on digital content will reach $180 billion next year, up nearly 30% on last year’s figure of $140 billion. The research indicates that revenue growth will primarily be driven by continued migration to streaming video services, with broadcasters and telco operators increasingly deploying their own on-demand and IPTV offerings to compete with OTT players.
According to the study – Digital Content Business Models: OTT & Operator Strategies 2016-2021 – telcos also recognize the pressing need to invest in attractive, original content to compete with shows developed by Netflix and Amazon. It cited the example of Spain’s Telefónica, which is to produce 8 to 10 TV series per annum from 2017. Both BT and AT&T have indicated that they might commission original drama or entertainment in the near future.
Meanwhile, several telcos have partnered with OTTs to offer consumers bundled ‘zero-rated’ content that does not impact monthly data allowances. The study shows that more operators might consider enhancing the relationship through the acquisition of a strategic stake in the content provider, as with TeliaSonera’s investment in Spotify.
The research also highlighted Twitter’s recent acquisition of the online rights for the USA's NFL as the first move by an OTT player into the sporting arena, and said that other players could follow suit. However, according to research author Windsor Holden: “The spiraling cost of most premium sporting rights means that bidders for exclusive live rights for must now pay several hundred million dollars per season. With most streamed audiences well under a million, this is likely to deter online-only players in the short and medium term.”