The Digital evolution has set new trends into motion as now the online streaming industry has spread its wings worldwide. People from all around the world are switching to online streaming platforms like Netflix, Hulu, Amazon Prime, and Disney Plus.
Despite the fact that online streaming platforms have geo-restrictions, people from all around the world still find a workaround to access them. For example, Hulu is available only in the USA but you can get Hulu in the UK through a VPN. That’s the intensity and attraction of online streaming platforms that have made people move this way.
Netflix, the corporate that broke the mold and remained to dominate the streaming industry, started by shipping rental DVDs to their customers, basically sort of a purchase order Blockbuster. After a severe shift in their business model in 2007 with the introduction of subscription-based OTT video streaming services, Netflix has clarified its product and algorithms for over a decade, both causing and dominating the OTT video technology industry’s outstanding growth.
OTT video streaming’s growth could be a significant force within the disruptive digital landscape, doing what Uber has done to the taxi and hotel industries. This has sparked a severe OTT vs. pay-TV battle because the newer OTT video technology challenges the house show business’s previously established order. Ten years ago, Netflix had around 12 million subscribers. Today, Netflix has more than 140 million subscribers. Evidence of this rapid video streaming growth is the undeniable fact that those numbers are increasing by around eight million 1 / 4. The sole thing slowing down Netflix’s runaway success is deep-pocketed competitors who have noticed the expansion of OTT streaming, recognizing that it’s the long run of video services delivery and do everything they will to compete for head-on.
How much has the video streaming market grown?
Globally, online video streaming service subscriptions have grown from 150 million in 2014 to around 600 million in 2019. Subscribers are more expected to grow to 1.1 billion by 2021. OTT revenue’s global growth will rise from $69 billion in 2018 to $129 billion by 2023. Market penetration of OTT video technology within the US is over 70%, with the typical user subscribing to three. There are over 300 video streaming service providers worldwide, with over 200 within the US alone.
The reason for the outstanding advancements of OTT video technology in but a decade is twofold: First, there’s increased accessibility created by more significant broadband rollout, improvised internet speeds, and high performing consumer electronics (CE) devices capable of employing OTT video technology. Second, the streaming industry’s advances in supplying their services have hugely improved customer user experience (UX). Typically the video streaming industry now offers better content suggestions by using improvised customer data analysis (which had started in 2006 when Netflix offered its famous $1 million prizes to developers).
OTT versus TV industry
OTT encompasses the distribution of video content over-the-top of traditional dissemination technologies. OTT is just a technology alternative at the main basic level that permits the replication of the standard home entertainment “stack” of consumer value propositions during a digital context.
In technology terms, OTT is the delivery of video content through fixed or mobile broadband internet connections rather than over the printed TV spectrum or dedicated cable, fiber, or satellite networks. OTT is neither more nor but a replication of the standard set of consumer video services in many ways but still OTT platforms are overshadowing linear TV.
Furthermore, although OTT mirrors the average video stack, digital technologies enable many distinctive characteristics and features that don’t seem possible with over-the-air, cable, or satellite distribution.
These comprise the sheer breadth of content available, the flexibility of your time and place for viewing content, and also the flexibility of consumer offerings and price points that companies can give and from which consumers can choose.
Finally, OTT and traditional TV are further distinguished by the content creators that participate within the space. By excluding constraints on content distribution and space, OTT has introduced new content creators to the market.
1-Traditional professionals like Hulu produce high-quality content and are expensive and are characterized by a better-defined and well-funded ecosystem of studios, production houses, and professional talent. Before OTT, this group accounts for the TV content production ecosystem.
2-Professional amateurs (pro-ams) don’t have access to extensive production infrastructure, but they need regular production schedules and profit motives, and that they generate revenues. They’re focused totally on producing content for OTT, and lots of began as amateurs on YouTube or other social platforms (for example, The Young Turks).
3-Amateurs make content sporadically, but they’re less and prolific contributors to the community of content. Their output forms the cornerstone of consumption on social platforms like Facebook, Twitter, and Snapchat. Amateurs are especially best at capturing the viewing public’s imagination: many amateur videos have “gone viral” and been seen by millions. This is often a very new but hugely important part of the content production ecosystem.
How has the growth of video streaming platforms impacted the broadcast industry?
Understandably, with the massive growth of OTT video streaming, the competitive dynamics of the OTT vs. pay-TV battle have significantly changed. The only apparent losers because of these shifts in content consumption are traditional broadcasters and cable TV operators whose subscribers are deserting thanks to high prices and lack of comparable choices. This phenomenon called “cord-cutting” has led to drastic changes within the broadcasting market. Nearly 1/2 US 22-45-year-olds don’t watch traditional TV in the slightest degree, and it’s approximated that 22 million households will end satellite and cable TV providers by the tip of 2019.
Cord-cutting is additionally influencing where marketers spend their ad dollars. Traditional broadcaster’s total share of ad spend is predicted to decrease dramatically by almost 20% over the subsequent few years, from 36% in 2016 to 29% in 2021. These video streaming growth trends have also challenged the traditional content production powerhouses to dominate the creative landscape. This was exemplified by director Martin Scorsese together with his $200 million movies.
Another essential monetization strategy is stemming the flow of lost revenue. One in every of the most critical streaming industry revenue leakages occurs through piracy and, therefore, the illegal redistribution of video content. It’s approximated that piracy will cost content rights holders over $50 billion a year by 2022, which could squash the dreams of success for several nascent streaming services.
The answer is improvised content protection with digital rights management (DRM) solutions and anti-piracy services adapted to OTT video technology. Suppose piracy continues to be an option for several around the world. In that case, the revenue from this current phase of the quick video streaming growth of OTT will reach a plateau, stifling innovation and creativity and decreasing the motivation and financial justification for digital rights holders to keep up producing top-notch, compelling content.