Streaming services and video-on-demand (VOD) are the new norm—and it’s steadily transforming our media consumption habits.
We used to wait for specific times to catch our favorite TV shows. Now, we can access those shows quickly from the device of our choice—whether that’s a smart phone, tablet, or laptop. Movies are also easier to watch than ever before; we no longer have to go to the cinema or rent out copies because hundreds of thousands of movies are now available online and in cable operators’ video on demand packages.
In no platform is this more apparent than the instigators of numerous late-night marathons of Stranger Things, Game of Thrones, and Suits: Netflix, HBO, and Amazon Prime.
Where We are Now
This is what we know about video-on-demand at present: 60 percent of Americans subscribe to VOD platforms, according to Parks Associates. Netflix has the lion’s share, with a presence in 40 percent of households. Smaller niche services are gaining popularity as well.
In addition, the rise of video-on-demand has changed the way we consume television. Consumers are “cord-cutting”—a new term that refers to dropping cable TV services for Internet-streamed ones. VOD giants are also forcing cable companies to change the way they do business because the latter provides compelling and original shows and on-demand content, as well as use data to serve customers better and let people consume content in the way they prefer.
What We Can Expect in the Future
But just like any other service that piggybacks on the Internet, video on demand is bound to evolve.
With that said, here are some of my predictions for video on demand, which are based on research and hard facts:
1. Double or Nothing on 2020
The video on demand market shows promising figures by the year 2020.
The number of digital video users worldwide will likely double by the year 2020. Subscription-based video on demand (SVoD) services like Netflix, Amazon Prime, and Hulu will account for 30 percent of this total, and will generate $16 billion in revenue. Only half of the total revenue is from the U.S., which is one of the largest SVoD markets across the globe.
Among all digital video services, SVoD has 25 percent penetration rate, making it the second highest in the U.S. In a few years, this figure is expected to exceed 30 percent.
2. Neck and Neck Race Among VOD Brands
Traditionally, Netflix has been the big player in the world of video-on-demand. But the landscape seems to be changing.
More and more companies are realizing the potential of video-on-demand, and of giving consumers the power to watch what they want, when they want to, and where they want to. And with the market for VOD ever expanding, competition is increasing between the major up and coming providers.
Disney will, in fact, pull its movies from Netflix and build its own platform. The company will launch a branded direct-to-consumer streaming service come 2019 which it plans to expand globally.
In addition, Hulu has agreements with all five major broadcasters in the U.S., while Apple will invest $1 billion in producing and acquiring TV shows in 2018. Facebook also launched its new video platform recently called Watch, which will feature content from different publishers and creators. These include user submitted content, professionally produced shows, and live broadcasts.
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Source: newsroom.fb.com
There’s still a long way to go before Netflix will lose its hold on the VOD market, but it’s certainly loosening.
3. Move Away, TV!
The switch from traditional television to Web viewing is making a dent in the satellite and cable industry. Between the beginning of 2008 and the end of 2009, approximately 800,000 households in the U.S. cut the cable cord in favor of Web viewing. This trend is known as “cord cutting.”
In 2013, a Netflix series titled House of Cards won a Primetime Emmy Award. It’s the first webisode of a television series to win an award bestowed by the Academy of Television Arts & Sciences. Three years later, Netflix received 54 Emmy nominations—an award that was once solely occupied by cable and broadcast companies.
These changes reflect a realization that fewer people watch shows the moment they air—and instead binge-watch series online. It also reflects that VOD is taking away a huge chunk of the broadcast TV market.
4. Local Content
Netflix has already expanded to France, Germany, Austria, Switzerland, Belgium, and Luxembourg, while HBO is already available in several countries, too. That’s because these companies have seen the potential of the mentioned countries because these have huge customer bases. They also know how to take care of their image, and get closer to content production in each region.
This paves the way for video-on-demand offering more local content. Doing so strengthens VOD platforms’ local brand and helps them connect with the audience. Audiences, after all, have varying tastes across different regions.
In Spain, for instance, this strategy encouraged Netflix to partner with Bambú Producciones to produce a series titled Las chicas del cable, which builds on the successful format Velvet.
5. Big Screen Quality = Device Quality
More VOD platforms will offer films and series in high quality, or on the same level as the big screen. This shift is driven by users demanding higher quality videos. According to a survey by Wowza, 68 percent of consumers expect access to high quality video streaming experiences on any device.
Now Wal-Mart-owned Vudu, for instance, which was originally just a movie-download service, allows users to stream movies in full 1080p, thanks to its HDX video-encoding algorithm.
In addition, it’s hard to find a Blu-ray player that doesn’t support Netflix nowadays. While its “HD quality” isn’t as sharp as on some other services, it’s still a winner.
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Source: wowza.com
6. “Center of the Action” Experience
Virtual reality is the next big wave that will drive video on demand.
Uses around virtual reality are increasing. VR headsets are becoming more and more affordable, and new types of VR content are also appearing. People are loving it and they want more. According to a study, 81 percent of consumers would tell their peers about their VR experience.
The demand for VR is so huge, that market researcher International Data Corporation (IDC) predicts that by 2020, its revenue will grow to $162 billion from only $5.2 billion in 2016.
This kind of premium content provides good opportunities for content monetization in video on demand.
Prosumerism and Riding the VOD Wave
It seems that we are witnessing the rise of “prosumerism,” where the user is now in control of their viewing practices, mixing and matching the services they like and eliminating the ones that they don’t. And that’s driving the world of video on demand.
Many things will change, and for businesses to remain relevant and become successful, they must be prepared to ride the wave.
Source: Site Pro News