Paid OTT revenue in emerging markets will increase from $1.9 billion in 2014 to $6 billion in 2019, said Pyramid Research.
Subscription video on demand (SVoD) services such as Netflix will have user base of 102.7 million in 2019 in emerging markets from 19.4 million in 2014.
Such video services will be available to 19.4 million in 2019 from 1.3 percent of emerging market households in 2014.
“In many emerging markets, we are witnessing the emergence of hybrid models, whereby services offer free content to expand the user base. At the same time premium SVoD and transactional video on demand (TVoD) services will generate additional revenue,” said Daniele Tricarico, senior analyst at Pyramid Research.
Emerging Asia Pacific and Latin America accounted for 90 percent of paid OTT revenue in emerging markets in 2014, with Latin America being the only emerging market region where Netflix operates. The two regions will only drop marginal shares in the next five years, still making up 86 percent of the total in 2019.
In China the proliferation of hybrid models combining advertising-funded video on demand (AVoD) and SVoD will be a major driver for growth. 4G, fiber broadband and e-commerce will support growth of OTT, but content regulation may hamper evolution in the near term.
As the paid OTT opportunity strengthens in China, the regional Asia Pacific market will pick up from 2015-2016 onward.
In Africa and the Middle East, as more paid services emerge and AVoD services increasingly position SVoD for premium content, the total paid OTT revenue (SVoD and TVoD) will expand in the next five years to represent 7 percent of the regional pay-TV revenue.
In Central and Eastern Europe, the impact of SVoD has been so far very limited, with TVoD more common. However, SVoD adoption will pick up in the forecast period as the leading providers seek to monetise from the pervasiveness of online video through both TVoD and SVoD. Paid OTT revenue will grow to represent 5 percent of pay-TV in the region in 2019.
