Video Industry Disruption

Today's video industry is dealing with massive disruption. Executives are constantly confronting uncertainty about the pandemic, OTT strategy, content windowing, accelerated churn, the emerging metaverse – the list goes on. Successful executives are those who best adapt their offerings amidst this disruption. But, to adapt, executives need to better understand where the market is going.

Information and Insight is Essential

Industry leaders must have current insights into video industry shifts:

• Consumer mindsets and behaviors
• Competitors' innovations
• Emerging opportunities

Tracking the video industry closely while managing current business offerings and projecting growth are difficult tasks. Insight into current performance does not necessarily predict market shifts and provide a path to future growth.

Video industry executives must:

• Have a view into competitors’ performance
• Frequently survey consumer interests and expectations
• Develop partnerships with entertainment ecosystem players to realize new opportunities

Usage statistics and subscriber analytics is critical, as are taking stock of industry trends. To maintain leadership, industry players must leverage as many insights and analytics tools as possible.

How can industry leaders gain insights and business guidance for the global video services ecosystem?

Interpret’s research serves multiple critical insight requirements, simultaneously:

• A deep understanding of consumer actions and preferences
• Analysis of emerging trends and new opportunities
• Market sizing and growth forecasts.

In a single library of insights, updated throughout the year, seasoned industry leaders provide not only quarterly metrics, but recommendations for action. Essential for competitive advantage in a rapidly shifting market, VideoWatch provides critical executive insights, constantly updated throughout the year.

Scope of Change

In 2021, TV and movie viewing represents about 40% of consumers’ entertainment time, a figure that has fallen over the past few years. Viewing on streamed paid or free OTT platforms represents over half of that viewing time, a shift that has caused market leaders like Disney and WarnerMedia to realign their strategies.

Importantly, this shift is global and crosses many types of media. In several markets, over 60% of consumers watch TV and movies online on a weekly basis. Sports are also increasingly online, which presents a massive revenue opportunity, as well as a security challenge for broadcasters and sports leagues / organizations.

Global Trends Driving Video Industry Change

Interpret has identified trend areas, primary threads of change, that are shaping the nature of video competition and service offerings today.

Foreseeing disruption – New areas of disruption are impacting the industry. The concept of “live TV” (and TV overall) continues to change, affecting broadcasters, network channels, and live sports. The youngest generation of viewers see emerging media such as livestreaming, short form content, and gaming on equal footing with TV and movies as primary sources of entertainment. Streaming devices are evolving into aggregation marketplaces and center-points of user experience, especially due to their control over the largest screen in consumer homes. Other competitors are also emerging, from online giants to innovative mobile apps, each seeking to draw and monetize viewers.

Optimizing distribution – The prominence of OTT is now a given. So, the business question now shifts to “how”, including licensing, carriage, and direct-to-consumer. Aggregation initiatives are emerging to offset the needs driven by fragmentation, but with drawbacks for those being aggregated. International growth remains for subscription services, but global expansion is challenging and surprisingly costly in unexpected ways. Many are looking to ad-based business models to drive industry revenues (with good reason), but scale, data/measurement, and increasing competition are enduring issues.

Winning viewers / subscribers – Greater maturity in OTT subscription services, and ongoing needs of pay-TV providers, is driving focus on subscriber retention and churn. Many industry players are re-assessing the subscription lifecycle, given new patterns of re-subscription and re-cancellation as users increasingly switch among streaming services based on discretionary spending and desirability of new content. In this environment, providers are having to look beyond video to understand the wide variety of subscriptions pulling on consumer pocketbooks, including music, gaming, and other entertainment choices. Industry executives are also evaluating new ways to engage viewers / subscribers, including compelling shoulder content, co-viewing, community building and engagement, and other approaches.

Emerging opportunities – New technologies and shifting consumer demand are enabling new business opportunities. Areas such as livestreaming commerce, extended reality (XR), social video, cloud gaming, fitness on connected TV devices, and the emerging metaverse are just a few of the areas where new revenues will emerge over the next several years. New business models in video, such as FAST channels or OTT-based PVOD, are driving new approaches and revenues. Companies are also exploring cross-media bundling of offerings, such as complementing video services with gaming, music, podcasts, or other media.