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The State of the OTT Market 2019

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Conversely, the live-streaming platform Twitch was used by 41% of respondents identified as gamers, versus only 9% of overall UGC content creators.

Interestingly, Facebook was a close second to YouTube, with approximately 76% of both respondents identifying as either gamers or non-gamers.

When we pared the questions back to focus exclusively on live UGC creation, the Facebook numbers were in parity between gamers and non-gamers, at roughly 54% using Facebook Live to generate UGC. YouTube, however, remained the dominant platform for live-only content creation and distribution, with almost 63% of non-gamers using YouTube for live UGC and approximately 57% of gamers using the platform for the same purpose.

Twitch was seven times more likely to be used by gamers for live UGC broadcasts (28%) than it was by non-gamers (4%), highlighting the specialized nature of live UGC platforms for particular content niches.

We have to be careful, though, about calling esports— the foundation of almost all live streaming on Twitch—a content niche. After all, it’s a global market estimated at $493 million in 2017, and expected to more than triple in size to $1.65 billion by 2021.

According to Statista, esports revenue was a respectable $493 million in 2017, and is expected to more than triple to $1.65 billion in 2021.

Learning From Enterprise

What does the continued rise in user-generated content creation and consumption say for the overall state of OTT?

Our take is that live UGC will drive the continued overall shift away from on-demand content consumption and more toward a hybrid approach that involves live viewing as well as searchable on-demand viewing of the same content.

This would follow a trend set in the enterprise video market as far back as the late 1990s. In those days, the use of live video streaming for “all-hands” meetings or quarterly CEO presentations was primarily a cost-saving technique as a replacement for more expensive live satellite uplinks that only the largest multinational corporations (MNCs) could afford to use.

Once these meetings were live streamed, however, the MNC faced the challenge of rebroadcasting a recording of the live stream to those who either were unable to virtually attend the live event—due to scheduling conflicts or, for global MNCs, due to time zone constraints—so that all employees received the same information.

The rebroadcast was often streamed within a 24-hour period, with the recording being played from a traditional analog or digital video tape, and then archived. The typical viewership percentages in those early days were often well above 80% of employees watching the live stream and less than 20% viewing the rebroadcast.

Along the way, though, a funny thing happened: If the content of the all-hands meeting wasn’t compelling or time sensitive, the percentage of employees watching the rebroadcast rose.

In addition, as recordings shifted from video tape to file-based archives, allowing companies to offer an on-demand version of the meeting, the overall number of viewers for the initial live event fell off dramatically.

It reached a point that on-demand viewing of these events over a weeklong period surpassed that of the live-event stream viewing. This made distribution easier, especially for companies that didn’t have a multicast-enabled intranet.

What does all this have to do with Twitch and esports consumption? Here’s the takeaway: As video becomes more searchable, with machine learning and computer vision identifying not just characters and avatars in live-streamed gameplay but also identifying styles of play, the value of the on-demand versions of these gameplay live streams will rise as a training tool for the next generation of gamers.

Will esports come to be dominated by on-demand video consumption? It’s unlikely, given the compelling nature of esports content and the significant uptick in esports tournaments. But I anticipate that the percentage of on-demand consumption will at least rise to the low double digits over the next 2 years.

Is It OTT or Is It TV?

Finally, let’s consider a question based on the overall success of the streaming media industry.

If we can envision a day where everything is being delivered via OTT, what’s the next thing beyond OTT? In other words, do we have the language or terminology to address a world where “the top” in OTT is no longer an add-on to traditional television consumption but is instead the “new normal” for television delivery? And what constitutes television? The device itself or the method of broadcast?

To be sure, as we highlighted in the January 2019 issue of Streaming Media magazine, the advent of ATSC 3.0—with its ability to deliver OTA broadcasts as an IP stream—should provide a significant benefit in terms of scaling viewership of live-linear IP video consumption in dense urban areas. But is that streaming, over-the-top delivery, or merely just the new way of terrestrial digital broadcast?

As we reflect on that topic, and the rollout of ATSC 3.0 in late 2019, I’d challenge the streaming industry to begin thinking about how we replace terms like IPTV, OTT, VOD, and even streaming with a new vocabulary that addresses the reality that both on-demand and live “television” content can be consumed almost anywhere a portable connected device can be carried.

We’re still at least 4 or 5 years off from total OTT domination, but now is the best time to begin considering how we refer to the post-OTT delivery. After all, we don’t want to find ourselves 25 years into the 21st century and still using terminology created more than 100 years earlier at the advent of telephony and wireless radio.

[This article appears in the March 2019 issue of Streaming Media Magazine as "The State of the OTT Market."]

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