SAMPLE PAGES: OTT Video in Emerging Markets: Monetization Strategies and Five-Year Revenue Opportunity Daniele Tricarico| Senior Analyst Malcolm Rogers| Analyst Ozgur Aytar | Research Director January 2015 Report price: $3,495.00 © 2015 Pyramid Research | OTT Video in Emerging Markets Summary ‘OTT Video in Emerging Markets: Monetization Strategies and 5-Year Revenue Opportunity,’ a Research Report by Pyramid Research, analyzes the revenue potential of the OTT video services across emerging markets in Africa and the Middle East, Asia Pacific, Central and Eastern Europe, and Latin America, identifying and mapping key OTT video players from local telcos and payTV providers to pure-play OTTs, and best practices for differentiation and OTT video monetization. The report provides 5-year projections for SVoD and TVoD accounts and revenue by region and for key countries including Brazil, China, Mexico, Russia, Saudi Arabia and South Africa. The analysis is built upon in-depth case studies of Netflix Latin America, Clarovideo, OSN Go, iRokoTV, Ivi Russia and LeTV. The report is structured as follows: • Section 1: OTT Video Market Trends and Monetization Strategies in Emerging Markets ̶ Challenges and opportunities for OTT service providers, positioning strategies for pay-TV operators and effective business models for OTT video provisioning. • Section 2: SVoD and TVoD Demand and Revenue Outlook Across Emerging Markets ̶ Overview of forecast assumptions and covered countries and regions, review of SVoD accounts and paid OTT video revenue per region. • Section 3: OTT Video Opportunity, Competitive Landscape and Keys to Success in Latin America; including region-level market overview and trends as well as deep-dive analysis of the region’s largest markets Brazil and Mexico and key players Netflix Latin America and Clarovideo. • Section 4: OTT Video Opportunity, Competitive Landscape and Keys to Success in Africa and the Middle East; including region- level market overview and trends as well as deep-dive analysis of Saudi Arabia and South Africa and key players OSN Go and iRokoTV. • Section 5: OTT Video Opportunity, Competitive Landscape and Keys to Success in Central and Eastern Europe; including region- level market overview and trends as well as deep-dive analysis of the region’s largest market Russia and a key player Ivi Russia. • Section 6: OTT Video Opportunity, Competitive Landscape and Keys to Success in Emerging Asia Pacific; including region-level market overview and trends as well as deep-dive analysis of the region’s largest market China and a key player LeTV. • Section 7: Key Takeaways and Strategic Recommendations for OTT Video Service Providers. © 2015 Pyramid Research | OTT Video in Emerging Markets 2 Key findings • The growing investment in broadband infrastructure, with • The opportunity to position SVoD and TVoD services the improvement in network speed and performance, has successfully is stronger for local companies, provided that opened up new opportunities to provide video over IP, not they have enough funding to invest in attractive content, and only in more advanced, developed economies but also in that they can deploy sustainable business models for paid emerging markets. content. • OTT video is mostly advertising-funded across emerging • In spite of the growing importance of mobile, with markets, but paid models are gaining traction within hybrid increasing 4G take up, the bulk of OTT video usage will business models, whereby services offer free content to remain over fixed broadband networks, with WiFi expand the user base, but at the same time position representing a key enabler technology for nomadic usage on premium transactional video on demand (TVoD) and secondary screens. subscription video on demand (SVoD) content to generate • In order to reinforce their market position, all pay-TV additional revenue. In recent years, OTT business models operators should consider aggregating third-party OTT entirely relying on advertising revenue streams have become services within the main service portfolio in addition to difficult to sustain, given the high cost of content. standalone OTT propositions. • Across emerging markets, we expect SVoD accounts will increase more than five-fold between 2014 and 2019; the proliferation in China of hybrid models combining AVoD and SVoD will be a major driver for growth. The cumulative paid OTT revenue from SVoD and TVoD services is projected to be as much as US$18.8bn for the 2015-2019 period, over 80% of which will come from the emerging markets in Asia Pacific and Latin America. Among all emerging markets examined, China, Russia, Brazil and Mexico offer the most scale and growth potential over the next five years. © 2015 Pyramid Research | OTT Video in Emerging Markets 3 Report methodology The ‘OTT Video in Emerging Markets: Monetization Strategies and Five-Year Revenue Opportunity’ report comprises market sizing and demand analysis and trend analysis for OTT video services across emerging markets as well as detailed case studies. Insights and data are derived through a mix of desk-based secondary research, primary research as well as quantitative modeling for sizing market opportunity. Pyramid’s methodology for OTT video market sizing and demand analysis combines secondary and primary research, with international benchmarking and quantitative modeling in order to present a complete picture of the socio-demographic, competitive and demand trends affecting the adoption of OTT video services across emerging markets. Primary research involves in-depth interviews with market players, and the secondary research effort includes obtaining relevant data and intelligence through publicly available sources, regulatory authority publications, trade associations, specialist databases and company financial reports, presentations and press releases. © 2015 Pyramid Research | OTT Video in Emerging Markets 4 Reasons to buy • The “OTT Video in Emerging Markets: Monetization Strategies and Five-Year Revenue Opportunity” report provides a comprehensive examination the nascent OTT video market opportunity to help executives make informed investment decisions, develop effective partnerships and optimize return on investment. • This report provides a five-year forecast of SVoD accounts and SVoD and TVoD revenues by region and for key countries across emerging regions to enable executives effectively position their companies for emerging trends in demand for OTT video and growth opportunities. • The report incorporates in-depth overview of key challenges and business model trends in the OTT video market across emerging markets and best practices for monetizing OTT video for stakeholders to develop competitive strategies as well as differentiation. © 2015 Pyramid Research | OTT Video in Emerging Markets 5 Table of Contents Table of contents 2 Mexico: Key Market Trends Table of exhibits 4 Brazil: OTT Video Market Overview Paid OTT Video Accounts and Revenue Forecast Executive summary 6 Brazil: Key Market Trends Section 1: OTT Video Market Trends and Monetization Strategies in Case studies: Emerging Markets 10 Netflix LATAM: Content and Partnerships and Business Outlook Definitions: OTT video pricing models Clarovideo: Content and Partnerships and Business Outlook Definitions: OTT service providers Section 4: OTT Video Market Opportunity, Competitive Landscape and Definitions: Content provision in the connected era Keys to Success in Africa and the Middle East 47 Challenges and Opportunities for OTT Service Providers OTT Video Market Overview Content Procurement SVoD Accounts Forecast Piracy and Payments Paid OTT Video Revenue Forecast The Role of Legacy Broadband and the Mobile Opportunity Key Market Trends Positioning Strategies for Pay-TV Operators South Africa: OTT Video Market Overview Monetizing OTT Video Paid OTT Video Accounts and Revenue Forecast Section 2: SVoD and TVoD Demand and Revenue Outlook Across Emerging Key Market Trends Markets 23 Saudi Arabia: OTT Video Market Overview Key Forecast Assumptions Paid OTT Video Accounts and Revenue Forecast Regions and Countries Covered Key Market Trends Emerging Markets: SVoD Accounts by Region Case studies: SVoD Penetration of Households OSN Go: Content and Partnerships and Business Outlook Paid OTT Video Revenue Forecast by Region iRokoTV: Content and Partnerships and Business Outlook Comparative Review of Paid OTT Video Revenue and Pay-TV Revenue Section 5: OTT Video Market Opportunity, Competitive Landscape and Section 3: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Central and Eastern Europe 64 Keys to Success in Latin America 30 OTT Video Market Overview OTT Video Market Overview SVoD Accounts Forecast SVoD Accounts Forecast Paid OTT Video Revenue Forecast Paid OTT Video Revenue Forecast Key Market Trends Key Market Trends South Africa: OTT Video Market Overview Mexico: OTT Video Market Overview Paid OTT Video Accounts and Revenue Forecast Mexico: Paid OTT Video Accounts and Revenue Forecast Russia: OTT Video Market Overview © 2015 Pyramid Research | OTT Video in Emerging Markets 6 Table of Contents Russia: Key Market Trends Case study: IVI Russia: Content and partnerships and business outlook Section 6: OTT Video Market Opportunity, Competitive Landscape and Keys to Success in Emerging Asia Pacific 75 OTT Video Market Overview SVoD Accounts Forecast Paid OTT Video Revenue Forecast Key Market Trends South Africa: OTT Video Market Overview Paid OTT Video Accounts and Revenue Forecast Key Market Trends China: