Competition Increases in the OTT Industry
Competition Increases in the OTT Industry
  • Kim Ji-yeong
  • 승인 2019.10.08 19:07
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 From the second half of this year, many companies plan to enter the OTT industry. Therefore, changes are expected in the media industry.

 OTT refers to a service that provides various media content, such as movies and dramas, via the Internet. OTT is an abbreviation of over the top service. ‘Over the’ means beyond the traditional boundaries such as land-based television station and cable TV. ‘Top’ means a set-top-box for watching IPTV. In the beginning, OTT referred to services that supply media content like set-top-box. Now, regardless of a set-top box, online streaming service has been included in the OTT industry. 

 Netflix, Amazon Prime, and Hulu is the representative corporations. All of them, Netflix is far ahead of the other platforms for years. It had about 137 million subscribers worldwide as of 2018. However, it may no longer be next year.

 The breadth of the OTT market has grown explosively. The size of the global OTT market has increased from 6.3 billion dollars in 2012 to 24.7 billion dollars in 2017. As OTT has grown consistently, media enterprises and IT companies have announced the launch of their own streaming platform. Warner Media – which owns HBO, CNN, Cartoon Network, and Warner Bros – will launch HBO Max in 2020. Apple will release Apple TV+ in 2019 and offer various original content made by popular producers and big name stars. 

 The most notable announcement is that the Walt Disney Company plans to start Disney+ in the second half of 2019. Disney is a gigantic media group. It acquired the land-based television station ABC, and major film production companies including Pixar, 20th Century Fox Film Corporation, and Marvel Studios. It has extensive experience in production. It creates original contents, and the quality of the content is guaranteed. Also, Disney consumers are highly loyal. Likewise, children are enthusiastic about its animations. Marvel Studios movies have a very strong fan base. Lastly, it possesses innumerable content of various genres. It did not renew the content’s supply contract with other platforms when it made a decision to launch its own streaming service. Thus, if consumers enjoy Disney movies, they will subscribe to Disney+. 

 Experts predict that Disney will have dominance over the others, but it is hard to occupy the whole market. Due to the characteristics of media content, there are no perfect substitutional goods. As competition intensifies, a platform will use a method that distinguishes itself from other platforms to attract consumers. The platform could specialize in specific genres for niche markets, or it could make original content to be enjoyed only on that platform. Indeed, there is nothing more important than the quality of the content. Many platforms already spend a lot of time and money producing their own high quality original content. A platform that can invest a lot of money in good content will be the winner in the industry.

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