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.