OTT Market Maturing, but Opportunity for Growth Remains

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RESTON, Va. – comScore’s “State of OTT” report says the over-the-top (OTT) video market is showing signs of maturing, with a majority of WiFi-connected homes streaming video to their TV sets. But the report says there’s significant opportunity for device makers, content creators, and advertisers to add market share.

comScore says 59.5 million homes in the U.S. used OTT devices in April, meaning 63.5 percent of homes have WiFi. The number of homes that use OTT was up 17 percent compared to the same period last year, suggesting that user growth of these devices is slowing down.

comScore says there are two types of consumers who do not currently use OTT devices that are particularly ripe for shifting to the medium. "Of all the households that have an OTT device connected to the internet, 79 percent were active in April,” said Susan Engleson, senior director of emergent products for comScore. “There is still opportunity here, and certainly one of the lower-hanging fruits is the 21 percent of households that have an OTT device but aren’t using it to stream.”

comScore defines an OTT device as a streaming stick/box, game console, smart TV, and/or similar products. The researcher also estimates that 28 million households subscribe to cable or satellite service but do not use an OTT device or service.

Engleson says “the vast majority of the opportunity is with cable and satellite subscribers,” noting that streaming services like Netflix and Hulu have been making themselves available to cable subscribers through their cable boxes in an effort to get them on board.

comScore says Netflix, YouTube, Hulu, and Amazon dominate the space, but that virtual MVPDs (vMVPDs) like Sling TV and YouTube TV may be viewed as the places where young people are going to get their TV content, outside of the traditional bundle.

comScore’s data suggests that increasingly younger consumers are going elsewhere, and older consumers are embracing vMVPDs. “If you look at a year ago, 29 percent of households that were using these vMVPDs were age 18-34, now it is 21 percent,” Engleson says.