Roundup: Streaming Industry Predictions for 2023
As 2022 draws to a close, ’tis the season for many things—not least among them, in the streaming industry as in most other places, year-end recaps, and even better, predictions for the coming year. In just the last week we’ve published a survey—State of Streaming Autumn 2022—that does a great job of summing up the industry trends of the last 6 months since our previous State of Streaming survey in culling and interpreting reader responses from far and wide. Like all of our surveys, it also allows us to forecast a bit—we’ll see in 6 months when the State of Streaming Spring 2023 survey lands at Streaming Media East how our forecasting panned out.
In the last few weeks, my own editorial inbox has filled to bursting with unsolicited but much-welcomed season’s greetings from a disparate array of industry experts and thought leaders ringing in “End-of-Year Prediction Season” with all manner of prognostications about what’s to come in 2023.
Here’s a quick roundup of the most intriguing, thoughtful, and surprising ones, organized into some rough categories. There’s much food for thought here, but no prediction's inclusion should be read as an endorsement. We can reasonably expect some to come partly or mostly or entirely true, while others might leave us scratching our heads in December 2023 when we realize how far off they turned out to be. And if some of these predictions haven't come true a year from now, maybe it's just the timing that was off, and they'll look better in 2024.
Thanks to one and all for their insight, and for sticking their necks out with these predictions—especially the boldest and bravest of the bunch. And without further ado, let the prophesying begin.
Monetization, AVOD, Hybrid, and FAST
“As a result of the ongoing cost of living crisis, Free Ad-Supported Streaming TV (FAST) services will continue to rise in popularity. However, as with traditional linear channels continuing to lose viewers, I wouldn’t expect this to last through the year. Especially with the big ‘entertainers’ offering reduced subscription fees and investing in bespoke content to encourage viewers and offer.”—Igor Oreper, Chief Architect, Bitmovin
“Netflix will stay on top. They will surprise everyone with 'good advertising.' It’s got the people, pipes, and partners to hit it out of the park. With AB InBev onboard, what could go wrong? Measurement won’t be a stumbling block either as TV hasn’t done a bang up job of metrics and the open web is in disarray. Will consumers balk? Likely not. If they’ll get a break on price due to ads, that may be enough of a carrot to stay. With so much original inventory, Netflix has a real advantage and more runway in global users than newer platforms.”—Hunter Terry, VP Solutions Consulting & CTV Commercial Lead, Lotame
“One major positive as we head into 2023 is that TV appears to be recession-resistant. Typically, people watch a lot of entertainment during economic downturns; while individuals might cut down on vacations or buying things, they will always want entertainment. With Hulu, Netflix, and all the major streamers now offering less expensive versions with ads, there are new, scalable ways for brands to reach lean-back consumers. Smart brands and agencies will realize that the streaming screen is where the eyeballs are.”—Sean Doherty, CEO, Wurl
“Ad-supported streaming will be a huge opportunity for marketers. Streaming giants such as Netflix have announced ad-supported subscription tiers with favorable pricing in exchange for advertising within content. This will open up new inventory, new audiences, and new opportunities for marketers to lean into CTV as an opportunity to deliver performance.”—Matt Sotebeer, CSO, Digital Remedy
“We are witnessing first-hand a FAST land grab as content owners rush headlong to adopt a YouTube-style business model so they can quickly start monetizing their VOD catalog. However, this locks content owners into a proprietary platform with unfavorable rates of ad revenue sharing. In 2023, we expect to see a new approach take off—one that uses modular workflows to give content owners control of their FAST channels so they can regulate what advertising appears and keep the revenues. It also opens the door to add that all-important live streaming to attract viewers.”—Julien Signes, SVP & General Manager, Video Network, Synamedia
“Netflix’s new advertising-based offering will help unstick a bunch of brands that have been ginger in their approach to streaming advertising and downright stubborn in their devotion to Linear TV. We predict an ongoing exodus of linear dollars to Streaming but not much net-new spending because of the unpredictable economic factors going into 2023. The situation is going to challenge traditional marketers to get more serious about their performance, which will in turn force them to (finally) shift some spend from linear to streaming. CMOs will be moved to bring those two parts of the business (and the budget) into one program. But even beyond that, the CMO needs to have a convergence mindset around video in general, whether it’s streaming or linear or YouTube.”—Stefanos Metaxas, CSO, Bliss Point Media
“Samsung and Roku were the first device makers to embrace FAST. Now, many of the top 30 smart TV manufacturers have introduced FAST offerings. All smart TV manufacturers will go all in with FAST, and we will see nearly 100% device adoption by the end of 2023.”—Sean Doherty, CEO, Wurl
“Advertisers will seek alternatives to social. Although social media will continue to be an important channel for marketers, we will start to see dollars flow away from social and into other channels. Brand safety, although not a new concern, will continue to be an issue on social media. This is exacerbated by the changes at Twitter which have left many advertisers skittish about where their ads could appear. Diminishing performance on social media will also remain a concern.”—Matt Sotebeer, CSO, Digital Remedy
CTV and OTT
“With digital advertising retreating from Twitter and Meta, CTV is in a prime position to capture this budget by its ability to target viewers and evaluate effectiveness using these aggregated data.”–David Tice, Senior Consultant, Hub Entertainment Research
“Over the next two to three years, I would expect to see some consolidation through M&A, and as we see an aggregation of offerings this will result in price increases for packages. At the end of the day, this will result in a smaller number of entertainment video streaming providers standing tall.”—Igor Oreper, Chief Architect, Bitmovin
“White-label streaming technology is getting more and more available and easier to use. Together with increasing popularity of AVOD and FAST, this will trigger a boom in niche streaming services with very specific audiences, allowing marketers to run extremely precise ads with tailored campaigns that will lead to great ROI through conversion. While these niche streaming services do not have the reach of linear TV and mainstream SVOD, they offer highly nuanced targeting options based on demographics and behavioral patterns, enabling advertisers to develop tailored campaigns that capture consumers' attention across the entire funnel and even drive them to conversion. With measurability across the board, marketers are in a better position than ever to leverage the power of CTV and witness improved performance and effective advertising in this space.”—Gijsbert Pols, Ph.D., Director of of Connected TV & New Channels, Adjust
“CTV will be to 2023 as mobile was to 2008. During the 2008 financial crisis, the advertising industry experienced a steep downturn with one exception: mobile. The smartphone had just hit the market, leading to a steady growth in mobile advertising. Now, as we find ourselves in another economic slump, CTV will persevere in 2023 as mobile did in 2008, with growth in connected TV devices more than making up for a decline in ad fill rates.”—Sean Doherty, CEO, Wurl
“CTV has evolved into a measurable, accountable performance marketing channel, allowing for more precise targeting, and, as a result, higher ROI. The economic downturn has accelerated the already rampant cord-cutting, resulting in even more ad inventory available on the market. We’ve reached the point where the entire user’s journey is measurable, and using upper-funnel data, marketers can see exactly how TV ads tie into the wider marketing goals. [With today's CTV measurement] solutions ... you can now immediately spot how CTV assists down-funnel channels, such as Google Ads and Apple Search Ads. These insights are especially valuable for optimizing costs in difficult economic times.”—Gijsbert Pols, Ph.D., Director of of Connected TV & New Channels, Adjust
“CTV will be the fastest growing performance channel. Search and Social have been the primary drivers of performance for Digital Marketers. These channels are becoming saturated and marketers are faced with diminishing returns on channels that have traditionally brought high ROI. As a result, the rise of CTV as an opportunity to deliver real, measurable outcomes will continue to become a focus for marketers in 2023.”—Matt Sotebeer, CSO, Digital Remedy
“If imitation is the highest form of flattery, retail media networks should turn a rosy shade as CTV takes a page out of the former’s book. Every streaming service is going to try to create its own unique platform. Why? Because networks are the ones with the data. Take LG for example. They can sell inventory within LG TVs or send off the data they collect into the ecosystem and onto other CTV devices. Anyone who has customer data is going to package it and sell it ... just like a retail media network.”—Hunter Terry, VP Solutions Consulting & CTV Commercial Lead, Lotame
“What we’re going to see in 2023 is companies becoming more innovative with catalog content they have—organizing it by genre or era—as Pluto has done with categories like Westerns or ’90s action movies ... market old shows to a new generation of younger viewers who don’t care if it’s a new show—they just care that it’s ‘new to me.’”–Jon Giegengack, Principal, Hub Entertainment Research
“We’re getting to a point where someone like Amazon starts giving away TVs for free. What’s the catch? You have to permanently opt in to their data collection.”—David Tice, Senior Consultant, Hub Entertainment Research
“CTV is here to stay, but the measurement conundrum still prevails. There will not be a single solution, at least for the time being. The industry will become even more compartmentalized and disjointed, which will make measurement more difficult. We see it every week when a big streamer or OEM wants to set up its own offering accessible only via its platform. Case in point: Apple just announced they are creating their own DSP specifically to focus on their CTV offering.”—Hunter Terry, VP Solutions Consulting & CTV Commercial Lead, Lotame
Rights, Piracy, Security, and Privacy
“2022 was all about how the future of live sports streaming would play out. We have been keeping an eye on the likes of Apple and Amazon Prime Video as they experiment with strategic rights buys in certain markets, while Netflix has also gone on record warming to the idea of offering live sports. But this learning phase has to be quick, so in 2023 we’ll see whether these streaming giants decide to go big or go home. Sports streaming at scale is not for the faint-hearted, and achieving profitability is not an easy challenge given the cost of sports rights. Although on paper it sounds like an opportunity suited for big streamers with deep pockets, they really don’t like its territory-by-territory model.”—Julien Signes, SVP & General Manager, Video Network, Synamedia
“The pressure on household budgets is intense, and video subscriptions are not immune. These tough economic headwinds have coincided with a plethora of new SVOD subscriptions which can add up each month, especially as sports streaming becomes so segmented ... Consumers are cutting their outgoings by paying for pirate services alongside legal services ... This can only mean one thing in 2023: increased consumption of sports via illegal services. Streaming technology makes it simple and cheap to steal, aggregate, sell, and deliver content illegally, rubbing salt into the wounds of broadcasters who face spiraling rights costs. For a get-rich-quick criminal enterprise, piracy is a winning business model and requires no technical know-how. The super-aggregated illegal pirate service offers premium sport and entertainment content at a price point that no legal service could ever come close to rivalling.”—Simon Brydon, Senior Director, Security Business Development, Synamedia
“Privacy will be important but less so than past years. Privacy, although hugely important, will become less of a focus for marketers this year. We are hearing that it is still a consideration but isn’t the same focal point it has been in the past. Google continues to punt changes opening up questions as to when and if it will actually begin to deprecate cookies. Additionally, new regulations have shown exactly what limitations are on the horizon so there has been some uncertainty removed around what changes will take place and when.”—Matt Sotebeer, CSO, Digital Remedy
“We all know people share credentials—a form of OTT consumption that ranges from the good, bad, to the downright ugly. Every operator knows it is happening and costing them money, yet only a few have the foresight to proactively try to fix it. 2023 should be the year that hard-pressed OTT services finally accept that they need to first understand the scale of the issue and then come up with a variety of commercial and security strategies to deal with it.”—Simon Brydon, Senior Director, Security Business Development, Synamedia
Expansion and Contraction
“I expect to see continued and significant growth in video-based marketing and streaming across all sectors, not just entertainment. It’s going to become more and more apparent across the health and fitness, eLearning, eGaming, eSports and religious sectors too.”—Igor Oreper, Chief Architect, Bitmovin
“Linear budgets will contract but parts of digital will remain strong. As we saw during the pandemic-generated recession, we will see a contraction in linear TV budgets. Due to an anticipated recession, inflation squeezing wallets, and general uncertainty, marketers will be pressured to invest in media that can deliver measurable, optimizable ROI. Linear TV is an excellent channel for broad reach but is less effective in terms of targeting and delivering performance. Squeezed media budgets mean those budgets have to be more tied to ROI than linear can offer.”—Matt Sotebeer, CSO, Digital Remedy
“Holding strong in the face of a recession, 2023 may see a slowdown in gaming growth, but it will remain an upward trend. Game sales have been historically resilient during economic downturns. Why? Staying home to battle or race against friends is quite a bit cheaper than a night out on the town. Granted, nearly half of the gaming industry’s growth is driven by mobile gaming, which is fast becoming a saturated market in many corners of the world. For this reason, we imagine that the big winners of 2023 will be game developers that emphasize quality of content.”—Shawn Zhong, CTO, Agora
Gaming and Esports
“AI-assisted game development will give smaller studios a competitive edge. In 2023, we will see smaller game studios embrace ML and AI generation to drive their content production costs (way) down. Games are complex forms of entertainment that rely on a wide variety of costly asset types. By leveraging ML models and trained AI to create more of these assets, smaller teams can accomplish more with much less. And, with the number of published ML and AI white papers on the rise, AI-assisted game development is poised to become a rising trend in 2023 that will give indie studios the tools to compete against established developers in the content economy.”—Shawn Zhong, CTO, Agora
“Cloud gaming will rise (again). In 2023, we will see more cloud gaming providers enter the market. Since Google Stadia is sunsetting in early 2023, cloud gaming would appear to be on the downslope once again. But as ultra-fast networks like 5G continue to proliferate across the world, the allure of device-independent access to any game or virtual world remains appealing, especially when supply-chain constraints continue to prevent consumers from gaining access to dedicated gaming hardware. With new players like Netflix and Logitech each expanding into the cloud gaming sector, and Epic Games’ heavy investment into Pixel Streaming, we expect that 2023 will see many more cloud gaming offerings rise to take a turn at becoming king of the cloud.”—Shawn Zhong, CTO, Agora
A critical technology for streaming at scale will be the emergence of dynamic CDN experiences with the instant elasticity needed to support millions of users switching on at the same time to view a top sporting event, whilst optimizing the delivery for each users’ exact application, bandwidth, and device … Flipping the just-in-case streaming model on its head, 2023 will see just-in-time processing become a must-have feature for live streaming. If you are a broadcaster with channels—including ad-based FAST ones—with viewers only during live events, you are creating waste across infrastructure, cloud, and CO2 emissions. Instead, a just-in-time model provides exactly the resources required at any given time, cutting costs. If no one is watching a channel, it simply frees up those resources.—Julien Signes, SVP & General Manager, Video Network, Synamedia
“Can streaming go green? We are still from two to five years away from any workable standards because we need to fully understand how reducing energy in one part of the workflow impacts other parts. And measurement will only work when everyone in the ecosystem, including cloud providers, co-operates to report their data in a consistent way. Until then, we need to focus on quick fixes that cut energy, such as turning off servers that are not being used, and urging every operator to add sustainability to their RFPs to encourage more innovation.”—Julien Signes, SVP & General Manager, Video Network, Synamedia
2023 Will Be The Year of...
“Super bundles ... In 2023, we’re going to see more companies create ‘super bundles’ .. that go beyond video, and in some cases, go even beyond entertainment alone.”—Jon Giegengack, Principal, Hub Entertainment Research
“Performance. Due to economic uncertainty as well as continued pressure on marketers to deliver and prove ROI, performance will continue to be key. Performance doesn’t just mean direct response…even for brand advertisers the ability to reach the right audiences on the right channels with high-impact capabilities will be essential. Media is going to have to work harder and advertisers will be looking for more capabilities around measurement and optimization and ROI generation.”—Matt Sotebeer, CSO, Digital Remedy
“TikTok decides. Prepare for TikTok to muscle in on the Streaming Wars, taking on the ad-supported video-on-demand platforms (i.e. Tubi, Xumo, Crackle, Pluto, etc.) before coming hard at the Netflix, Hulus, and Disneys of the world. TikTok’s advantage is twofold in this space: a cost-saving formula of consumers and creators being one and the same, and their magic algorithms that require no “what should we watch tonight, honey?” debates. TikTok decides for you, which is something choice-weary consumers seem relieved to delegate.”—Stefanos Metaxas, CSO, Bliss Point Media
“Fan zones driving 8K. Whether you are watching a live event on a big screen outside the stadium or in a bar with others, you expect a premium experience and pin sharp quality. Fan zones are not just limited to popular sports—think America’s Got Talent and The Voice as well. That’s why we believe fan zones will drive the adoption of 8K for their big screens. We first demonstrated live sports streaming in 8K with BT in early 2022 and, through our discussions with operators, we all have high expectations for the next 12-24 months.”—Julien Signes, SVP & General Manager, Video Network, Synamedia
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