Closing the Digital Gap
The Impact of Over-The-Top Platforms on Home Entertainment
As Over-the-Top (OTT) platforms continue to proliferate, consumers today have access to a vast selection of entertainment content at their fingertips from a growing array of delivery platforms globally. With this explosive growth, it appears virtually certain that electronic distribution platforms soon will become the delivery platform of choice for most consumers of filmed entertainment content.
One of the primary issues affecting the long-term growth and profitability of the filmed entertainment industry (as well as broadcast and cable television) is whether the conversion to electronic distribution platforms ultimately will accelerate growth in consumption, capture improved margins and create incremental value for rights holders or whether it simply represents a change in format preferences at lower price points that will not be able to replicate revenues earned by traditional mediums such as DVD and linear television broadcasting. With the home entertainment segment stirring up considerable debate over the industry’s long-term profitability among its various participants (studios, rights holders, distributors, advisors, lenders and investors) and with so many changes in consumer preferences, we have been studying the impact of OTT platforms on the entertainment industry. Among the issues considered were:
- When will electronic receipts surpass traditional or physical receipts?
- How will OTT options impact consumer behavior over the long haul?
- What are the lasting ramifications of OTT platforms for industry profitability?
The FTI Consulting entertainment experts from the Valuation and Financial Advisory and Telecom, Media & Technology practices have teamed up to forecast when electronic distribution will surpass physical distribution in the home entertainment sector. This is the first report in a series of thought leadership focused on the impact of Over-the-Top platforms on the broader entertainment and media industry.