The business models of more than half – 55 percent – of U.S. OTT video services providers are subscription-only. The corresponding figure in Canada is 50 percent, according to new market data about OTT video business models released July 19 by Parks Associates.
In a recent decision, the U.S. Court of Appeals for the 9th Circuit upheld industry participants contention that subscribers’ sharing of their OTT video service passwords without the consent of their providers constituted a crime under the U.S. Computer Fraud and Abuse Act, Parks points out in a news release. The market research company estimated that OTT service providers lost more than $500 million in revenue due to password sharing in 2015.
That said, companies are unlikely to pursue legal actions, at least not against individual subscribers, according to Parks. “There is an enormous amount of change going on in the OTT space right now, with new OTT video services entering the market each month. Many of these services have subscription as at least part of their business model,” said Parks’ senior director of research Brett Sappington in a press release about Parks’ OTT video business models research.
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To learn more about the subscription business model for OTT video businesses, download our Blueprint for a Subscriber-Centric OTT Video Business!