USA OTT Media Market Outlook to 2030

USA OTT Media Market Overview

• The USA OTT (Over-the-Top) media market is expected to reach a market size of USD 128 bn in 2023. The market has seen significant growth over the past few years, driven by the shift in consumer behavior toward digital content consumption. This growth is supported by the increased penetration of high-speed internet and mobile devices, which have allowed consumers to access content from platforms like Netflix, Amazon Prime, and Hulu with ease.

• The key players dominating the USA OTT media market include major platforms like Netflix, Amazon Prime Video, Hulu, Disney+, and HBO Max. These companies hold a significant share due to their vast content libraries, original productions, and advanced subscription models. Netflix remains a frontrunner with its strong focus on original content, followed by Amazon Prime and Disney+, which have leveraged exclusive partnerships with renowned studios. Each platform is competing to secure its market share through innovative pricing models and technology-driven viewer experiences.
• In 2023, Disney+ witnessed significant growth in its ad-supported tier, which attracted 5.2 million subscribers. The platform saw a 35% increase in engagement from March to September 2023, as new content releases like original shows and live sports drove higher audience participation. Notably, 89% of viewers expressed a willingness to watch ads if it allowed access to content they enjoyed. These developments highlight Disney+'s strategy to balance subscriber growth with ad revenue generation in the AVOD market.
• Major cities such as Los Angeles, New York, and San Francisco dominate the OTT media market in the USA due to their tech-savvy populations, high internet penetration, and thriving entertainment industries. Los Angeles, home to Hollywood, remains a hub for content production, contributing to the OTT markets growth. New York, with its dense population and fast internet connectivity, serves as a major consumption hub for OTT services. These cities not only lead in terms of user base but also content production and distribution.

USA OTT Media Market Segmentation

By Service Type: The USA OTT media market is segmented by service type into Subscription-based (SVOD), Transaction-based (TVOD), and Ad-supported (AVOD) services. In 2023, SVOD services dominated the market. This is largely due to the success of platforms like Netflix, Disney+, and Hulu, which have cultivated large subscriber bases through exclusive content and flexible subscription packages. The SVOD model allows users to access a wide variety of content without commercials, making it a preferred choice for premium content consumers.

By Content Type: The USA OTT market is also segmented by content type into Original Content, Licensed Content, and User-generated Content. In 2023, Original Content emerged as the leading segment. The preference for original content can be attributed to the investments made by platforms like Netflix and Amazon Prime Video in creating exclusive, high-quality series and films. Licensed content continues to play a vital role but is slowly being overshadowed by platforms focusing on proprietary productions to retain and attract new subscribers.

By Region: The USA OTT market is segmented into North, South, East, and West regions. In 2023, the West region led the market. This dominance is not only due to contribution to high content consumption but also it serves as hubs for OTT content production and technology innovation. The North and East regions follow closely behind, driven by tech hubs and high-speed internet connectivity. The South region, while growing, still lags behind due to lower internet penetration in rural areas.

USA OTT Media Market Competitive Landscape

• Netflix: In January 2024, Netflix revealed that its ad-supported tier reached 23 million monthly active users, up from 15 million in late 2023. This growth is driven by its lower-cost subscription plan, which attracts 30% of new subscribers. Additionally, 85% of ad-tier users spend over two hours daily on the platform.
• Amazon Prime: In 2024, Amazon Prime Video continues to focus on enhancing its OTT platform by investing in genre-specific original content, such as the release of The Wheel of Time and The Lord of the Rings series. These high-budget productions target dedicated fanbases, aiming to strengthen Amazon's position in the OTT market and attract a growing subscriber base. The company also explores partnerships and advanced technological innovations for improved streaming experiences.

USA OTT Media Market Analysis

Growth Drivers

• High Penetration of Smart Devices: The increasing use of smart devices, including smart TVs and mobile devices, has significantly driven OTT adoption in the USA. Consumers now prefer streaming content directly on these devices, with approximately half of OTT content being consumed through mobile or TV apps in 2024. This rise in device compatibility has enabled a seamless content experience, driving higher engagement.
• Flexible Subscription Models: Subscription video-on-demand (SVoD) services, such as those offered by Netflix and Amazon Prime, have grown rapidly due to their affordability and flexible pricing models. By the start 2024, nearly 30% of new subscribers opted for ad-supported tiers, further driving user growth. The availability of various subscription packages tailored to different user preferences continues to boost market adoption.
• Growth of Ad-Supported Video-on-Demand (AVOD): The AVOD model has seen significant growth in the USA, particularly as more consumers opt for free or low-cost streaming options. Platforms like Peacock and Tubi, which offer free content supported by ads, reported a major increase in user base in 2023, according to internal company data. In addition, advertising revenue in the OTT space reached $18 billion in 2023, driven by the AVOD model. As advertisers recognize the potential of targeted ads, this revenue stream is expected to grow by 10% annually through 2025, further driving the OTT markets expansion.

Market Challenges

• Content Piracy and Illegal Streaming: Content piracy remains a significant challenge for the OTT industry in the USA. This challenge is particularly detrimental to premium content platforms like Netflix and Disney+, which invest heavily in original content. Despite technological advancements in digital rights management (DRM), piracy continues to be a pervasive issue, creating barriers to monetizing content effectively.
• Rising Content Acquisition Costs: Content acquisition and production costs have surged in recent years, impacting the profitability of OTT platforms. As the competition for exclusive content intensifies, OTT platforms are facing increased pressure to secure top-tier talent and exclusive licensing deals. This rise in content costs has led some platforms to raise subscription prices, which could alienate price-sensitive consumers.

Government Initiatives

• Affordable Connectivity Program (ACP): The Affordable Connectivity Program (ACP) is a U.S. government initiative aimed at making broadband more affordable for low-income households. It provides eligible consumers with a discount of up to $30 per month for internet services, and up to $75 in high-cost areas. It also offers a one-time discount of up to $100 to purchase a laptop, desktop, or tablet through participating providers. The program helps to bridge the digital divide and expand internet access across the country.
• Digital Accessibility Act (2024): The Digital Accessibility Initiative involves evolving regulations under the Americans with Disabilities Act (ADA) and the Web Content Accessibility Guidelines (WCAG). In April 2024, the U.S. Department of Justice finalized regulations to improve web and mobile app accessibility for state and local governments under ADA Title II. This initiative aims to ensure that digital platforms, including OTT services, are accessible to all users, including those with disabilities.

USA OTT Media Market Future Outlook

The USA OTT Media market is projected to grow exponentially in coming years. This growth will be driven by high penetration of smart devices, flexible subscription models and surge in original and localized content production.

Future Trends

• Increased Focus on Niche Content: By 2028, the USA OTT media market is expected to see a shift toward niche content offerings, as platforms seek to differentiate themselves in an increasingly saturated market. Niche platforms focusing on genres like horror, documentaries, or international films are likely to attract dedicated user bases. Services like Shudder and Crunchyroll, which specialize in horror and anime content, respectively, are projected to grow significantly as more viewers opt for highly specialized content that traditional platforms do not offer.
• Integration of Augmented Reality (AR) and Virtual Reality (VR): The future of OTT content is expected to include AR and VR integration to create more immersive viewing experiences. By 2028, platforms like Netflix and Amazon Prime Video are likely to introduce AR/VR-compatible content, allowing users to engage with content in entirely new ways.