Changing consumer video viewing habits are forcing the media industry to evolve. Broadcasters, content owners, and pay-TV providers are all looking at new business models, new technologies, and hybrid strategies in an effort to stay ahead of OTT disruption.
The number of subscriptions to video on-demand services globally is expected to top 947 million by 2024, more than twice the number of subscriptions there were in 2018. And those subscriptions will tie to more than 531 million subscribers (about 1.78 subscriptions per person), up from 175 million in 2018, said Digital TV Research in a series of reports.
That count is likely to be dwarfed by the number of consumers who watch ad-supported or freemium streaming video from an ever-increasing number of services.
While just how many new streaming services are launching every year is a tough number to pinpoint, conventional wisdom suggests there should be at least 500 new OTT platforms rolling out annually for the next three years or so.
Last year, in the U.S., for example, there were 20 services launched (the high was 67 in 2015, according to Parks Associates). This year is likely to challenge the 2015 high, as there have been a swarm of OTT players entering the market.
And, in the next few months, we’ll see more major additions.
The latest OTT players
In November, Disney is launching its subscription Disney+ service, and offering a hybrid bundle of Disney+, Hulu, and ESPN+. Apple TV+ is scheduled to bring its own long-anticipated subscription service into the market at the same time.
AT&T, meanwhile, is expanding its AT&T TV, AT&T TV Now, and AT&T WatchTV services, while planning a spring 2020 deployment of four more services under the HBO brand. NBCUniversal is also set to come to market in 2020, and the list goes on.
Broadcasters, studios, pay-TV operators, sports leagues, and various content rights holders are all looking to go over the top directly to consumers (D2C), cutting out the middleman. A D2C play also allows them to create multiple flavors of their services—a la Disney and AT&T—creating multiple incremental revenue streams that allow them to appeal to not only broad swaths of consumers, but to very specific groups, as well.
Media companies are also offering consumers options on how they pay for content. While SVOD has been the fastest growing business model, ad-supported services are seeing new traction as consumers look to limit spending on subscriptions.
The result has been more OTT providers looking to offer hybrid models—a combination of SVOD, AVOD, and freemium.
Don’t get left behind
It’s become crucial for OTT providers to be able to react like a startup… to trial different concepts, A/B test, and be flexible with business models, for instance. A common trait? Speed. Being able to get to market quickly—and accommodate and react to changing market trends—is the difference between success and failure.
It’s all part of the industry’s evolution, which, in nature, is often misconstrued as “survival of the fittest.” That’s not really the case, as any freshman biology major will tell you; in fact, using the term will likely cost you 5 points on a 10-point essay.
Charles Darwin in On the Origin of Species used the phrase “natural selection” when explaining evolution, pointing out that it’s the positive traits an organism has that are more likely to ensure its survival. In other words, it’s not the fittest that survive, it’s the ones most able to readily and rapidly adapt to a changing environment.
The modifications our industry is undergoing are a form of natural selection driven by changing consumer appetites and technological preferences.
Introducing Brightcove Beacon™
At Brightcove, we’re committed to providing our customers with the resources they need to stay one step ahead in the ever-evolving OTT marketplace. Don’t get left behind: Now, more than ever, you need to get to market quickly—and our new SaaS-based OTT platform, Brightcove Beacon, will empower you to do just that. With our streamlined development process, you’ll be able to launch captivating, consistent experiences for web, mobile, smart TVs, and connected TVs in record time. Learn more about Brightcove OTT experiences—and stay tuned for additional information on our upcoming Brightcove Beacon release.