As we approach 2024, the video streaming industry continues to evolve at an unprecedented pace, driven by technological advancements and changing consumer behaviors. The proliferation of high-speed internet and the increasing penetration of smart devices have democratized access to online content, leading to a surge in demand for streaming services. This landscape is characterized by intense competition among giants like Netflix, Amazon Prime, and newer entrants aiming to capture the attention of a global audience. The focus has shifted not only to expanding content libraries but also to enhancing user experience with innovations such as personalized streaming and increased interactivity.
Pandemic Effects on the Video Streaming Industry
The long months of quarantine have dramatically increased the demand for online video content and video communication.
Live video streaming has become the preferred way to consume content. Many OTT and social platforms, such as Facebook and Youtube, have experienced massive growth in live viewership, especially in eSports and video games. Current statistics indicate that the video streaming industry will make up 82 percent of Internet traffic by 2023.
By 2030, the live streaming industry will reach $534 billion. However, there is no shortage of challenges for significant competitors, who must adapt to this world of constant change to survive. Ongoing changes are accelerated partly by new disintermediation and de-verticalization resulting from digital transformation and the shift to Web 3.0.
Over-the-top (OTT): between new opportunities and challenges
Even before the pandemic, people have increasingly adopted over-the-top (OTT) services for live sports, educational video streaming, fitness streaming, and more. OTT refers to streaming video and media delivered over the Internet without a cable or satellite provider subscription via a website or app. Famous ones include Netflix, Hulu, Amazon Prime Video, Disney+, and HBO, among many others. They exploded during the pandemic.
The great abandonment
However, things got different recently. According to Deloitte, more than 150 million users terminated their subscriptions worldwide, such that 2023 got labeled ‘the year of the great abandonment.’ The leading cause is increased competition within the video streaming industry, a veritable ‘platform war.’ It has made it difficult for consumers to afford multiple services. The churn rate has become a severe concern for streaming operators, who have spent considerable resources on producing new content as a key to retaining subscribers. Other reasons include niche streaming services which are increasingly capturing a slice of traffic.
OTT future prospects
Overall, OTT industry estimates remain optimistic, with a CAGR of 29.4 percent from 2020 to 2027. Subscription video on demand (SVOD) will remain the most significant revenue segment, and user penetration of streaming video platforms will rise to 35% by 2025. More conservative estimates project a mere CAGR of 7% in the 2022/2025 period (ITMediaConsulting 2022/2025), predicting a transition from SVOD to AVOD, advertising video-on-demand.
New frontiers: from social media and live streaming to gaming and metaverse
Social media, games, live streaming platforms, and the metaverse drive viewers away from linear TV and VOD content resembling TV.
Short videos and live-streaming
In social media, short-form videos are popular, particularly on TikTok, the platform of the moment. This content entertains as much as TV, even more than OTT platforms. Netflix admits that TikTok is one of its biggest competitors.
Live streaming platforms and apps have become sought-after during the pandemic, and today streamers are known as Hollywood stars. Amazon’s largest live-streaming platform, Twitch, has seen its viewing hours increase by 101 percent throughout 2020. It’s among the best known, along with social media that have integrated such functions as TikTok Live, Instagram, Facebook Live, and Youtube Live.
Metaverse
Meanwhile, new consumer demand for the so-called metaverse is beginning. However, this technology is still in its infancy, and there is no precise prediction about future impacts in the entertainment industry and beyond. One thing is sure: for younger people, entertainment is increasingly social, interactive, and personalized, and brings real-world characteristics that the endless possibilities of digital can extend. Social media and gaming resemble metaverse much more than video streaming, where consumers increasingly want to interact with content and personalize their experiences.
Video games
This trend is reflected in the gaming industry’s growing entertainment market share, thus incentivizing tech giants to invest in the sector. Sony just bought Bungie and Microsoft signed an agreement with Activision Blizzard. Also, Netflix has recently entered the games space, offering new video game exclusives and interactive content alongside its ‘TV alike’ content.
Speaking of television and linear content, the boom of Video on Deman (VOD) had led some analysts to predict its death, while the opposite has happened. The rise of live streaming consumption affirmed in 2020 does not seem destined to diminish. At its epicenter is sports.
Live streaming Sports takeover the video streaming industry.
Live sporting events have made a strong comeback, and while television remains a popular medium, online video streaming platforms are increasingly becoming the venue of choice for many sports fans. Prominent industry players like Disney, Hulu, and Amazon have secured expanded streaming agreements with the National Football League in the United States, enhancing their offerings and reach.
In Europe, OTT platforms like Dazn and Sky lead in sports content delivery, while ESPN holds a significant position in the United States. The year 2022, rich in global sporting events such as the Winter Olympics in Beijing and the Commonwealth Games, has provided tremendous opportunities for the video streaming industry. The upcoming UEFA EURO 2024 will further spotlight these platforms as fans look forward to watching one of football’s most prestigious tournaments. However, this surge in live sports streaming brings considerable challenges, particularly in maintaining low latency to ensure a seamless viewing experience.
In this context, ZEGOCLOUD can play a crucial role by offering tailored live-streaming solutions that cater specifically to sports broadcasts. With its advanced technology, ZEGOCLOUD helps ensure high-quality, low-latency streaming, critical for live sports where every second counts. The implementation of an intelligent multi-CDN strategy, supported by ZEGOCLOUD's robust infrastructure, ensures that viewers receive the best possible live sports streaming experience, minimizing delays and buffering regardless of geographical location. This capability not only enhances fan engagement but also positions ZEGOCLOUD as a key enabler in the evolving landscape of sports broadcasting.
The critical technologies - Low latency
Low latency is the technology behind the trends described above. Low latency streaming has become crucial since the pandemic, as all daily activities have depended on real-time video. However, most live streaming is not technically live, given the delays of several seconds in live transmissions.
Since interactivity is the watchword today, content distributors hope for sub-second delivery very soon. Connection speed is essential for smooth content delivery, and 5G comes to the rescue in this. Equally important is a streaming protocol used to transmit a live stream. Today the next-generation formats such as WebRTC, SRT, and HLS have improved performance. The difficulty of achieving smooth, low-latency video distribution goes beyond good connectivity and new streaming protocol; it requires a consistent digital infrastructure, which ZEGOCLOUD solutions enable.
On the image quality front, HD video is standard. Viewers are looking for compatible devices and related content with Ultra HD (UHD). UHD will become a significant growth driver for streaming services, even more so than 4K. Demand for high-quality video content has experienced unprecedented growth over the past three years due to devices that support 4K video playback. Large-diameter televisions, laptops, and especially smartphones.
The mobile phone is the most preferred device.
The smartphone is now the preferred video broadcasting medium, surpassing TV in terms of growth. It is partly due to mobile networks offering broadband and LTE services. Partnerships between streaming services and mobile networks are also trending, offering customers incentives for increased content consumption, further boosting the video streaming industry.
As 5G continues to grow and hybrid and decentralized work increases, live contributions through mobile phones are rising. Mobile networks, which include 5G and cellular bonding, have surpassed satellites for live contribution.
According to Statista, global viewers spent 548.7 billion hours with live-streaming apps in 2021, up from 482.5 billion in 2020. An accelerating trend as new streaming apps and upgraded devices are constantly released.
Summing up
Looking ahead to the rest of 2024 and beyond, the video streaming industry is poised for further expansion and innovation. As technologies like 5G become more widespread, streaming services will likely offer even more enhanced, high-quality viewing experiences, including advancements in AR and VR integration. Additionally, as consumer preferences continue to shift towards more tailored and interactive content, streaming platforms will need to innovate continually to keep pace with expectations and stay competitive. The future of streaming is not just about what we watch, but how and where we watch it, marking a dynamic era of growth and transformation in the industry.
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