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YouTube faces saturation in US

News, 21 December 2015

NEW YORK: Almost 9-in-10 (89.3%) of US digital video viewers are expected to watch their favourite shows via over-the-top (OTT) services by 2019, but YouTube is unlikely to increase its penetration of the market, according to new analysis.

In its first forecast of US OTT video service usage, research firm eMarketer said the category is near saturation, not least because of YouTube's dominance, but that other players still have room for growth.

YouTube already commands 94.3% of OTT video service penetration in the US, equivalent to more than 170m users, but its percentage share is expected to remain much the same over the next four years.

YouTube is forecast to have a penetration rate of 94.1% by 2019, or almost 188m users after taking population growth into account.

By contrast, streaming services like Netflix, Amazon and Hulu can expect solid growth trajectories over the same period, according to the eMarketer estimates.

Netflix is expected to increase its share of OTT video service users to 71.7% in 2019, up from 63.2% in 2015. Meanwhile, Amazon is expected to grow to 44.4% from 36.0% and Hulu will climb to 41.1% from 33.1%.

And in another industry development, eMarketer expects that the devices used by US OTT viewers will gradually shift away from game consoles and disc players to more portable technologies, such as streaming sticks.

Games consoles are currently by far the most preferred to access connected TV, but their share is expected to erode even if they will remain the lead device in 2019.

Streaming sticks, specifically Google's Chromecast, will become the second most popular connected TV device by 2019, after overtaking smart TVs and Blu-ray players.

Data sourced from eMarketer; additional content by Warc staff