Global Online TV, Video Revenue Forecast to Hit $51.1B by 2020

Netflix House of Cards United States - H 2013

Netflix House of Cards United States - H 2013

"SVOD has developed even faster than we expected," in part driven by Netflix’s global expansion, says Digital TV Research.

Worldwide over-the-top TV and video revenue will reach $51.1 billion in 2020, nearly doubling the $26.0 billion expected in 2015, according to a new forecast.

Research firm Digital TV Research cited the global expansion of Netflix as a key driver behind accelerated momentum and highlighted that the revenue growth would be "a massive increase" from the $4.2 billion recorded in 2010. The firm tracks‎ 64 countries.

According to its Global OTT TV & Video Forecasts report, the U.S. will remain the dominant market with OTT TV and video revenue rising by $16.6 billion between 2010 and 2020 to nearly $19.1 billion.

China will see growth from just $40 million in 2010 to $2.815 billion in 2020, elevating it to the fourth-largest OTT market by then, according to the research firm.

Overall, it predicts OTT revenue will exceed $1 billion in 11 countries by 2020. The top 5 countries in terms of revenue in 2014 were the U.S. (with $10.74 billion), U.K. ($1.73 billion), Japan ($1.67 billion), Canada ($713 million) and Germany ($701 million), according to Digital TV Research. In 2020, it predicts that the top 5 will be the U.S. ($19.09 billion), Japan ($4.07 billion), U.K. ($3.89 billion), China ($2.82 billion) and Germany ($2.30 billion).

Subscription VOD will become the largest revenue source in 2020, overtaking OTT advertising, it forecasts.‎ SVOD revenue will soar from $1.0 billion in 2010 to $7.6 billion in 2014 and $21.6 billion in 2020. The U.S. generated SVOD revenue of $753 million in 2010, which will jump to $6.516 billion in 2020, according to the forecast.

"SVOD has developed even faster than we expected in our last edition a year ago," said Simon Murray, principal analyst at Digital TV Research. "Some of this growth was spurred by Netflix’s aim to establish operations in 200 countries by end-2016. Not only has the launch of Netflix boosted each market, but the anticipation of its launch has galvanized local players into action — creating a whirlwind of promotional activity."

Digital TV Research now expects Netflix's international paying subscribers to grow to 26.36 million by the end of 2015.

Twitter: @georgszalai