Spending on consumer video media services to reach $314 billion in 2017: Gartner

MUMBAI: Global spending on consumer video media services will total $314 billion in 2017, a 4.2 percent increase from 2016, according to technology research firm Gartner.

Pay-TV services is the largest spending segment and is on pace to represent 90 percent of the total market, totalling $282 million in 2017, it added.

In 2017, emerging Asia/Pacific (20.8 percent) and Middle East and North Africa (17.4 percent) are forecast to record the highest growth in end-user spending on consumer video media services, Gartner stated in the report.

"We estimate that, incentivized by lower prices, one million households in emerging regions will enter the pay-TV market through an internet TV service by 2020," said Fernando Elizalde, principal research analyst at Gartner. "The dramatic difference in the price of these packages compared with traditional pay-TV packages will also put downward pressure on ARPUs (average revenue per user) overall."

Earlier this year, China Mobile began offering its pay-TV service free of charge to its premium subscribers for the first two years of a new contract. "This will lead to an influx of new subscribers in the pay-TV marketplace. However, it will also bolster price competitiveness and put negative pressures on the average revenue per user (ARPU) of the overall pay-TV market," said Elizalde.

Transactional video on demand ( T-VOD) offers consumers the ability to access a wide variety of content, from either managed pay-TV providers or over-the-top (OTT) companies such as Amazon, Google or Apple.

Derek O'Donnell, senior research analyst at Gartner, said that the availability of premium-priced ultra high-definition (4k) content will increase end-user spending on T-VOD content in mature regions, from $160 million in 2017 to $400 million by 2020.