Over the top (OTT) messaging leaders are rapidly evolving their key mobile messaging application interfaces to new voice and video communications, with revenue dilution implications for carriers worldwide. The progress made in mobile IP voice and video in the past year alone from key OTT players such as Facebook and Google is a clear indication of heightened mobile communications competitive pressure from these new players in 2016 and beyond. OTT players are transforming their communications apps into rich media platforms that serve as social networking hubs, offering a number of media services. Apps built on top of messaging enable users to solve broad problems. Messaging becomes a hub for consuming content and making transactions. Still, we argue that OTT communications providers need partnerships with carriers, to garner scale and differentiation.
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The strategy of most, if not all, OTT messaging providers is to gain scale first and then monetize. All communications OTT apps with global aspirations are in a race to become the biggest platform in order to attract developers, which in turn should add more value to an offering. OTT players are transforming their communications apps into rich media platforms that serve as social networking hubs, offering a number of media services. Apps built on top of messaging enable users to solve broad problems. Messaging becomes a hub for consuming content and making transactions. LINE Messenger and WeChat are the few OTT communications players to demonstrate revenue. They can serve as a blueprints for other players. Messaging apps have significantly eroded carriers' revenue from previous cash generators such as SMS services. The threat to carriers is increasing with the migration of voice calls from carriers to VoIP providers such as Skype and WhatsApp. WhatsApp and Facebook Messenger represent the most disruptive OTT communications players in the market. Monetization could be highly disruptive. A number of partnership opportunities are emerging as carriers are growing convinced that they can generate revenue from OTT communications. The challenge lies in business tie-ups and infrastructure capabilities.

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“Over-the-top communications services: Emerging monetization paths” offers an analysis of the state of the OTT communications market, the market drivers, and a number of company initiatives that highlight how market players are moving toward monetization. We highlight a number of monetization strategies and case studies employed by the world's largest OTT communications players. We also look at how carriers are impacted by OTT communications providers and how they can partner with key players to drive revenue. We conclude with recommendations for OTT companies and carriers.
Table of contents
Section 1: OTT communications market context
State of the market
Competitor landscape
Key features
Business model evolution
Section 2: Emerging monetization strategies
Digital content
Sponsored chats
Advertising
Mobile payments / commerce
Section 3: OTT communications provider case studies
Facebook Messenger
LINE
Snapchat
Viber
WeChat
WhatsApp
Section 4: The OTT/carrier partner model
Why carriers and OTTs need partnerships
OTT/carrier partnership landscape
OTT/carrier partnership opportunities
Section 5: Key findings and recommendations
Key findings
Recommendations
Appendices
Acronyms and definitions
Companies mentioned
About Pyramid Research
Pyramid Research contact information

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