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Netflix, the US-based online film and video service, made headlines when it launched in six European countries this September. But it’s just one of many players hoping to take advantage of increasing video consumption in the region. Total revenues generated by over-the-top (OTT) video—that is, video content streamed via the internet, rather than broadcast—in Western, Central and Eastern Europe rose 51% in 2013, to $3.2 billion, according to recent research by Strategy Analytics. Its “2014 European OTT Video Market Forecast” predicted further growth of 43% this year. In Western Europe, subscription video-on-demand (SVOD) services were expected to see the most dramatic leap: an estimated 103% in 2014 alone.
More widespread broadband provision, the explosion in connected devices and the growing range of video content on offer have all contributed to the rapid rise of OTT video viewing—and will continue to drive even broader adoption. An early 2014 “Socialogue” survey by Ipsos OTX and Ipsos Global @dvisor found that substantial numbers of internet users ages 16 to 64 across Europe were watching video in a variety of ways. Live TV was still the most popular, but in most countries monitored, streaming or downloading to a computer or watching VOD were the second and third most common behaviors.
Most of the revenue growth in Europe will be associated with online SVOD and ad-supported video, Strategy Analytics predicted. Ad-funded video services will generate less than half of OTT revenues in Western Europe in 2014, according to the report, but more than 60% of OTT income in Central and Eastern Europe.
Researchers emphasized that while consumers across Europe are embracing online video, “from a consumption, and even more importantly, monetization perspective, OTT video is just beginning to hit its stride.”
The report also pointed out that consumers are increasingly unconcerned about actually possessing video content in the form of a DVD or a paid-for download that they can own. Instead, having desired content on tap is more important—meaning that “accessibility and availability will trump ownership,” as one analyst noted.
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