The continuing evolution of the over-the-top (OTT) content delivery space makes it challenging to predict forward-looking trends. The landscape already looks significantly different to 12 months ago. Three key trends have caused the industry to stop and re-evaluate their growth plans:
- Live video streams approaching the same levels of scale and quality as traditional broadcasting.
Over the past few years, there has been an increase in popularity for live streamed content, especially in sports. However, as we saw from the blackouts during the 2018 World Cup, broadcasters need to be able to produce high-quality live content, distribute it in all formats and deliver it at scale. This year, thanks to the widespread adoption of robust cloud infrastructure and the democratisation of user-friendly interfaces and discoverability engines, broadcasters are seeing significant improvement in terms of quality content at scale. This year’s record-breaking live stream of the FIFA Women’s World Cup is a great example of the impact that advancements in OTT capabilities can bring to audiences.
- Increasingly granular data allowing for newfound complexity in data-driven decision-making.
Employing a data-driven strategy is not a new concept; however with the continuing reduction in processing and storage costs, content creators and providers are able to take a deeper dive into what their audience is consuming and what they’re interested in watching. With this new information, content providers are finding success identifying and catering to niche tastes with energetic fan communities. This has, in turn, caused a new appreciation for the economic viability of niche platforms that cater to very specific preferences and tastes, ranging from horror to anime.
- The embrace of in-house OTT by major content owners.
In 2018, we saw industry leader Disney announce plans to launch their own OTT platform. As more major studios also announce their plans to launch in-house streaming services, we are seeing an overcrowded space become even more saturated. According to a study Vindicia commissioned with nScreenMedia, Americans watch an average of 3.4 OTT services. While this may not seem significant, with over 200 OTT platforms in the U.S. for consumers to choose from, competition is at an all-time high.
As the major studios roll out their own in-house streaming services or announce plans for them, the rest of the streaming ecosystem is scrambling to respond. Smaller content providers are evaluating whether it makes sense to license their content to one of the legacy streaming services or retain control and build out their own platforms. The analysis is different for every company, but those most suited to strike out on their own often have passionate, loyal fan bases built around a differentiated content portfolio.
With only a few months remaining in 2019, the impact of these trends will become more apparent as the OTT market becomes increasingly fragmented and the smaller, more niche content providers strategise how best to differentiate themselves by building out an engaging platform while providing relevant content that will entice consumers. One thing is for certain – as technological and business model changes continue to drive the evolution of the OTT market, industry players must constantly adapt and innovate to stay relevant.
