OTT Market Is Far From Oversaturation, Per Ooyala Report
Lines Between Broadcast and OTT Blur as Media Companies and Consumers Increasingly Adopt Streaming Video
San Jose, Calif.(17 Jan 2019)
While there’s a limit to how many SVOD services users are ready to pay for, it is far from being reached. This is according to Ooyala’s new State of the Broadcast Industry 2019 report, which maps out the challenges for content creators and distributors as they strive to maintain and grow audiences in an increasingly fragmented media landscape.
In fact, that limit may continue to rise, especially as younger consumers — who see streaming as the norm — grow older.
The report – which draws on Ooyala’s own data and analysis as well as research conducted by other organizations – underscores that viewers of all ages are increasingly adopting streaming services as their primary source of TV content.
The lesson for traditional broadcasters, the report notes, is to adopt the mindset of a diversified media company – as more programmers and distributors are joining, rather than fighting, the push into OTT.
“Subscription and ad-supported OTT services are steadily replacing traditional content delivery, and there’s no end to the opportunity to create connections with a global audience,” said Ooyala Principal Analyst, Jim O'Neill. “OTT is not traditional TV. It thrives upon consumer choice, often random interaction, and the convenience of viewing when, where and on what device a consumer chooses. It thrives upon its own ability to iterate in order to respond to the changing conditions of the new TV environment.”
The Ooyala report identifies several areas of focus by content distributors as they seek to attract and maintain share of view. These include:
- Gen X, Boomers Join Millennials in OTT Adoption – While Boomers and the Silent Generation – those born before World War II – remain the lifeblood of traditional broadcasters, they too are increasingly adopting over-the-top (OTT) and video on demand (VOD) platforms.
- Content Growth – The year 2018 saw a record 495 scripted shows available to U.S. audiences, according to FX Networks Research, and that number will likely hit 525-550 in 2019.
- 5G Heralds the Dawn of a New Era – Some estimates say video could make up as much as 90% of all 5G traffic. For OTT, that means faster and smoother delivery of video, no buffering, higher resolution, and a better, more engaging experience for users; for AVOD companies specifically, it will foster the collection of better, deeper data that could be used to better personalize advertising.
- Size Really Does Matter – While mobile viewing soars, screen size still matters to the majority of consumers. 40% of U.S. consumers who replaced a TV between October 2016 and October 2018 said they wanted to purchase a bigger screen, per The NPD Group. And consumers are going all-in on 4K UHD, driven largely by SVOD services – like Netflix – and the promise of 4K and UHD content from major sporting events, like the Winter Olympics and FIFA World Cup.
“Content owners have seen a massive increase in the demand for their products,” continued O'Neill. “That will continue as OTT services push out across the globe and original content maintains — and grows — its value. It’s becoming increasingly important for media companies – both big and small – to closely monitor and control the content supply chain.”
The full report, including citations crediting research providers, can be found here.
For over 10 years, Ooyala has been at the forefront of shaping the content supply chain revolution as a leading provider of OTT, content production, and digital distribution solutions. Ooyala powers linear and on demand video for the world’s largest companies, managing thousands of hours of content and serving billions of streams across all platforms.