While OTT has already achieved significant market penetration in the U.S., around 3 in 10 potential OTT consumers have not yet adopted OTT.
Among that group, some have not switched to OTT because they know or suspect they do not have access to the bandwidth that streaming video over the internet requires.
As 5G spreads — particularly to areas of the U.S. where physical infrastructure for high-speed connectivity, such as fiber, is not yet available — OTT will come within reach.
The characteristics that make 5G highly anticipated make it well-suited for OTT.
The high bandwidth that 4K and 8K content require is well within 5G specs, and the superior stability of 5G connectivity is ideal for continuous and seamless video streaming.
Even the low latency of 5G helps improve the user experience of interacting with apps.
The current OTT market already reflects a slightly greater revenue base outside the U.S. than in.
OTT growth globally is likely to increase as connectivity driven by 5G has a greater market impact in developing markets where connectivity is limited. We have already seen the effects of globalization within our customer base.
To cite just one example, there is increased complexity in testing apps when you must incorporate multiple distinct versions of devices targeted at specific geographies and account for the prevalence of some devices only in specific geographies.
For example, an iPhone sold in the U.S. market is distinct from the same generation iPhone sold in the European market.
From a content perspective, global versus domestic distribution rights require functionality both server-side and client-side, as well as support for both from infrastructure, to ensure you do not run afoul of distribution restrictions by geography.
We expect that new entrants to the OTT market will likely follow the lead of giants such as Netflix by first operating exclusively in the U.S. However, that will not prove a sustainable model for long-term growth.
Audio streaming is gaining momentum. The global music streaming market size was valued at $29.45 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 14.7% from 2022 to 2030.
Music streaming apps are becoming more accessible, and audiences have an increasing variety of platform options.
GlobalLogic develops OTT applications on various platforms for one of the largest U.S. radio companies, with a user base exceeding 40 million registered users and 260 million app downloads.
In addition to music streaming, audio capabilities will grow in such forms as voice recognition features and smart speakers in OTT applications.