One Quarter of Home Vid Rentals to Be OTT by 2014

Over the top and on demand are increasingly how people want to consume — and pay for — their video, if new numbers from The Diffusion Group hold true. The research firm estimates that by 2014 revenue from in North America from on-demand video delivered via over-the-top methods will grow to $2.1 billion, up from $621 million in 2009.

To provide some context, TDG pegs U.S. DVD rental revenue at more than $8 billion by 2014, which would make OTT rentals roughly 25 percent of home video rentals.

Spurring growth in OTT services is the mad proliferation of such capabilities into a wide variety of consumer electronics devices such as game consoles, Blu-ray players, and broadband-connected televisions sets; as well as the increased number of OTT video services that are now online (Amazon (s AMZN), Netflix (s NFLX), Vudu, etc.) and only getting better and easier for consumers to use.

In a press release, TDG analyst, Colin Dixon said if the OTT growth “…fails to warn companies like Blockbuster and Time Warner Cable as to the magnitude of this threat, they are asleep at the wheel.” His warning to a cable company like Time Warner comes at the same time when a new Pike and Fischer report forecasts that cable ad revenue, which dropped 8 percent in 2008, will fall by more than 22 percent in 2009. Growth in OTT delivery could snatch away even more revenue as people cut the cord and cancel their pay TV subscriptions.

OTT video is something we cover pretty much daily here at NewTeeVee. Piping video content directly to your TV over a broadband connection is such a fast-moving and important topic, we’re devoting much our our upcoming NewTeeVee Live conference to the subject. Hear first-hand from the major players involved like Reed Hasting, CEO of Netflix; Anthony Wood, CEO of Roku; Avner Ronen, CEO of Boxee; Marc Whitten, General Manager of Xbox Live and more. The show has sold out the last two years, so get your ticket today.