Popularity of OTT Services is Ushering in Major Changes in Consumer Viewing Habits

by Parks Associates | May. 4, 2015

In a recent article for D Magazine, Parks Associates research revealed the increasing popularity of on-demand video platforms such as Netflix, Hulu, and Amazon Prime. Author Phil Harvey cited the results of a recent Parks Associates customer study, which shows over 55% of U.S. broadband households subscribe to over-the-top (OTT) services. Additionally, the increasing popularity of these services is leading to major changes in the way that viewers watch television.

This popularity has expanded the viewing experience to include smart phones and Wi-Fi-ready smart TVs. Instead of being competition for OTT companies, Parks Associates research analyst Glenn Hower believes that device makers can help pay-TV providers extend their influence outside of their own geographical territories. 

Speaking before the 2015 Digital Hollywood conference, Hower remarked, “Consumers in key demographics have adopted OTT services in large numbers, and now both content companies and service providers need to develop the technologies and solutions to deliver high-quality video experiences to these subscribers.”

Last year, Samsung’s Milk Video launched on Galaxy smartphones and tablets. The service allows businesses to communicate ads to thousands of devices without having to buy a commercial spot on TV. Additionally, DISH Network has started to live stream TV channels such as CNN, Food Network, and ESPN. The service is about $10 more than Netflix or Amazon Prime, but the OTT providers offer only on-demand video services. 

While each company’s specialties have their advantages and disadvantages, Harvey highlights the trends in the market that have remained the same:

  • More bandwidth is being required because of high-resolution video, pictures, and screens on devices.
  • The options for obtaining superior videos will increase rapidly as more content is shared on web-based services and devices.
  • Mobile apps will play a key role in the future of TV because they have the potential to reach biggest audiences possible.

Harvey also quoted Parks Associates’ forecast that by the end of the year, pay-TV households will surpass one billion in number. He also notes that four of the five top pay-TV providers are currently negotiating mergers. That will leave only two providers, each with 25 million subscribers, alongside DISH Network with its 14 million subscribers. 

Digital entertainment will be a key focus of the 2015 CONNECTIONS Conference, taking place May 19-21, 2015 in San Francisco. Hosted by Parks Associates each year, this three-day executive conference brings together over 400 industry executives to discuss the convergence of entertainment, smart home devices and services, and the Internet of Things.

Key OTT and connected entertainment sessions this year include:

  • Explosion of OTT Services, Tuesday, May 19, with speakers from iStreamPlanet, Kaltura, Verizon Digital Media Services, and Roku
  • 4K UHD TVs: The TV Landscape and Next Market Opportunity, Tuesday, May 19, with speakers from LG, NeuLion, and Sony
  • Unlocking the Value of Personalization: Balancing Big Data and Privacy, Wednesday, May 20, with speakers from Ericsson, Irdeto, NAGRA, Rovi Corporation, and Viaccess-Orca
  • Streaming as Standard: The New User Experience, Wednesday, May 20, with speakers from Giraffic Technologies, MobiTV, Roku, and Sharp

For more information on CONNECTIONS speakers and sessions, visit www.connectionsus.com.

Further Reading:

Next: Explosion of New OTT Services Due in Part to Netflix's Expanding Reach
Previous: Parks Associates on HBO Now: Consumer OTT Analysis & Data


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