In recent years, the surge in popularity and profitability of streaming video services has been remarkable. The digital media landscape has witnessed the emergence of diverse monetization models, including Free Ad-Supported Television (FAST), Advertising Video on Demand (AVOD), and Subscription Video on Demand (SVOD) models.
However, this evolution has also created new avenues for pirates to illicitly access premium digital content, making the industry vulnerable to piracy and unauthorized distribution. To combat these threats, it is imperative to establish a robust, multifaceted, and scalable content security framework that can accommodate various content distribution and ad-generation models, ultimately envisioning a piracy-free content consumption environment. In this context, let’s explore the different OTT content distribution models and underscore the vital role that content security plays in enhancing the user experience.
AVOD vs SVOD vs FAST : How are FAST, AVOD and SVOD different?
What is Free Ad-Supported Television (FAST)?
Free Ad-Supported Television (FAST) is a model in which streaming services offer free video content supported by advertising. This model has experienced a surge in popularity in recent years, with platforms like Pluto TV, Roku Channel, and XUMO gaining substantial traction. FAST is an attractive choice for viewers who prefer not to pay for premium content but are willing to tolerate advertisements.
FAST operates on the principle of scale to generate revenue from advertisers. As more viewers consume content, the ad inventory expands, thereby attracting more advertisers to the platform. Since the advertising revenue is shared with the content providers, FAST presents a mutually beneficial solution for all parties involved.
What is AVOD?
AVOD vs SVOD VS FAST: OTT Monetization models 2
Advertising Video on Demand (AVOD), in contrast, permits viewers to access premium video content at no cost, with the condition that they watch advertisements. This model represents a step up from FAST, featuring higher-quality content and a more sophisticated advertising approach that tailors ads to the viewer’s preferences and demographics. A prime example of an AVOD streaming platform is YouTube.
AVOD can prove to be a lucrative model for both the service provider and content creators, as advertising revenue can be shared between them. However, the success of AVOD hinges on the platform’s ability to attract and retain a substantial audience, a task made challenging by the competitive nature of the market.
What is SVOD?
Subscription Video on Demand (SVOD) is a model in which viewers subscribe and pay a fee to access premium video content without encountering advertisements. This model has gained widespread popularity through services like Netflix, Amazon Prime Video, and Disney+. The appeal of SVOD lies in its provision of exclusive content, tailored recommendations, and an uninterrupted, ad-free viewing experience.
The revenue generation of SVOD hinges on nurturing a dedicated subscriber base. To achieve this, these services make substantial investments in creating original content to maintain subscriber engagement. The drawback of SVOD is that the subscription fees can be relatively high, potentially limiting the size of the potential audience.
Why FAST and AVOD need Multi-DRM and Forensic watermarking
While the primary revenue model for FAST and AVOD platforms is advertising, they still have an interest in protecting the value of their content and maintaining positive relationships with content owners. Therefore, they employ multi-DRM systems, either in-house or through third-party providers, to strike a balance between content protection and accessibility for their audience.
Implementing multi-DRM solutions allows these platforms to apply encryption and access controls to their content, limiting unauthorized viewing or copying. It helps prevent piracy and protects the rights of content owners. Additionally, multi-DRM solutions enable content providers to enforce usage policies, such as limiting the number of devices that can access the content simultaneously or setting expiration dates for downloaded content.
Forensic Watermarking, is other techniques can be employed to track and identify illicit distribution of content.
Sigma multi-DRM supports FAST, AVOD and SVOD models that allows your content business to maximize scalability and revenue potential through the OTT video route, all along ensuring a top-notch user experience. The security framework is flexible enough to enforce concurrent streaming experience across devices while providing premium user experience.
In conclusion, the choice of monetization model depends on the goals of the content provider. FAST and AVOD are great options for content providers who want to reach a large audience, while SVOD is ideal for those who want to generate revenue from a loyal subscriber base. Ultimately, the success of any model relies on the quality of the content and the ability of the platform to attract and retain viewers.
In an era when ad blockers threaten the revenue streams of online media companies, technology has risen to the challenge with innovative solutions. Server-side ad insertion (SSAI) is one such technology that offers a way to seamlessly integrate ads into content streams while bypassing ad blockers. This not only ensures that ad revenue is protected but also provides consumers with a high-quality, non-interruptive viewing experience. In this article, we will explore how SSAI is changing the advertising landscape, its benefits, recent developments, and what the future holds for this technology.
The Rise of Ad Blockers
Advertising is a reliable source of revenue for many online media companies, but the rise of ad blockers could have a significant negative impact. According to PageFair’s 2017 Ad Blocking Report, consumers used ad blockers on as many as 615 million devices globally, and more than half of these were mobile — that’s a 30 percent increase from PageFair’s 2015 report. Additionally, research firm Forrester estimates that in 2016 alone, $20.3 billion in ad spending was blocked. Ad blocking is only expected to increase, and as this trend continues, content providers need a reliable solution to deliver a high quality experience for consumers, while still protecting ad revenue. Enter server-side ad insertion (SSAI), a technology that stitches ads directly into a content stream prior to delivery rather than through the app or browser on a consumer’s device. This technique doesn’t simply bypass ad blockers but also reduces the reason for using them, by ensuring ads are delivered seamlessly. In order to maximize the benefits of SSAI, media companies should think about ads in a new way – as a part of their overall content strategy rather than as an interruption to the viewer experience. Read on for an overview of SSAI and its benefits; the latest developments around this innovative technology, including reduced latency; and what the future holds for SSAI.
How SSAI removes the need for ad blockers
In a conventional system without SSAI, premium video content is delivered via one path, while ads are often “decisioned” and inserted via an independent second path. The two are combined at the consumer end of the delivery chain, where users watch video content. Because the content and advertising are joined at the “client,” viewers often experience interruptions while the app or website orchestrates all the moving pieces. Viewers can experience drops in video quality, black screens, additional video buffering and slower load times. More viewers are bypassing this entire inconvenience with ad blockers, which block that second ad delivery path, while still permitting publisher content to arrive through the primary path. It’s important to remember, however, that consumers don’t necessarily dislike ads, but everyone dislikes a negative experience. In fact, in a recent Moz consumer survey, 42 percent of consumers said traditional advertising, like television or radio spots, had a positive effect on their purchase decisions. That’s a clear indicator that the same consumers who are using ad blockers to quiet disruptive ads aren’t bothered by similar messages through other channels. This is where SSAI comes in. Also called “ad stitching,” SSAI integrates ad content with video content upstream at the server, rather than at the client. It bypasses ad blockers by serving both pieces of content in one package, making it difficult to distinguish between the two. Additionally, because the ad insertion is seamless and part of the overall video stream, consumers are far less likely to have negative experiences as a result of the advertising. Our Verizon Digital Media Services 2016 Quality Matters survey found that 86 percent of viewers say it is very or extremely important to experience TV-like quality every time they watch, on every screen they use. We also found that the average viewing session across all devices falls by 77 percent when there is a significant drop in video quality. SSAI brings increased quality and speed, meeting viewers’ ever-rising expectations. Viewers have responded positively. According to a report from ad tech company Free- Wheel, viewers complete 98 percent of SSAI ads served on OTT platforms.
Greater potential for personalization
How Server-Side Ad Insertion Is Transforming Video Advertising As We Know It 5
SSAI does more than just bypass ad blockers — it also helps advertisers offer more relevant, targeted ads. This is partly thanks to the ability for server-side ads to be dynamically “decisioned” and inserted uniquely and per consumer stream.
For example, an SSAI-based session management tool like our Sigma DAI/SSAI creates a unique session that represents a single user on a specific device. This provides advertisers and publishers with better data — for example, geographic location, device type or historical activity – allowing them to deliver personalization that ensures the right message reaches the right user at the right time. In this way, dynamic ad insertion (DAI) has the potential to help create more personal experiences through enhanced consumer knowledge and targeting. Consumers today expect advertising to be both tailored to their interests and compelling, and the session-based approach lets advertisers meet and exceed those expectations. With both DAI and SSAI, a true one-to-one and seamless video ad experience is possible. Improved content delivery increases engagement for the client, mitigates ad blocking, and ultimately, creates a more valuable relationship between advertisers, publishers and consumers.
Future proofing: What’s next for SSAI
As the technology that makes it possible continues to advance, SSAI is evolving too. For one, it’s becoming simpler to implement. Across the board, SSAI-savvy publishers are migrating to VAST 4.1, which supports advertisers’ growing demand for third party measurement solutions in addition to higher quality user experiences when ads are playing. This is accomplished through a new industry standard for separating the video ad creative from the measurement, verification, and interactivity components that advertisers rely on today to achieve their digital marketing goals. The new standard also enables these capabilities across a variety of platforms, including desktop, mobile, and OTT devices. Using a single video format across all devices, as we do at Thudo Multimedia, greatly simplifies the insertion, delivery, tracking, and reporting of both content and ads.
How Server-Side Ad Insertion Is Transforming Video Advertising As We Know It 6
Another recent innovation in SSAI technology is decreased latency. As RAM storage becomes cheaper year after year, content delivery networks (CDNs) are able to deliver media – including server-side ads – to users more quickly and efficiently. This is especially noticeable when a content creator is relying on one end-to-end CDN to oversee media and ads from start to finish. That means there’s no buffering as the content changes hands, either. We’re also working on facilitating low latency video streaming, complete with full session-based server-side ad insertion. That means delivering content with low latency – 40 percent closer to real time and encoding up to 60 frames per second — all with the full functionality of SSAI.
SSAI isn’t simply the latest innovation; it’s quickly becoming mandatory. As more viewers come to expect the seamless delivery of content and ads, advertisers and publishers that don’t get on board are certain to get left behind.
The Over-the-Top (OTT) market is growing rapidly, with global revenue expected to reach $434.5 billion by 2027. OTT services deliver video, audio, and other media content over the internet directly to users, bypassing traditional distribution channels such as cable and satellite television.
The growth of the OTT market is being driven by a number of factors, including:
The increasing popularity of streaming devices: Smart TVs, streaming sticks, and game consoles are making it easier and more convenient for consumers to watch OTT content.
The rise of original content: OTT providers are investing heavily in original content, which is attracting new subscribers and keeping existing subscribers engaged.
The affordability of OTT subscriptions: OTT subscriptions are typically much more affordable than traditional cable and satellite TV subscriptions.
The OTT market is highly competitive, with a wide range of providers offering a variety of services. Some of the leading OTT providers include Netflix, Amazon Prime Video, Hulu, Disney+, and HBO Max.
Growth Trends in the Over-the-Top Market
A number of growth trends are emerging in the OTT market, including:
The shift to mobile: Consumers are increasingly watching OTT content on their mobile devices. In fact, mobile devices are now the most popular platform for OTT viewing.
The rise of live streaming: Live streaming is becoming increasingly popular, with consumers using OTT services to watch live events such as sports, concerts, and news.
The growth of ad-supported OTT: Ad-supported OTT services are becoming more popular, as they offer consumers a way to watch OTT content for free.
Opportunities in the OTT Market
Content production: OTT providers are constantly looking for new and original content to attract and retain subscribers. This presents an opportunity for content producers to create and sell content to OTT providers.
Over-the-Top Market: Growth Trends and Opportunities 8
The OTT market offers a number of opportunities for businesses, including:
Advertising: OTT services offer a number of advertising opportunities for businesses. For example, businesses can advertise on OTT services through pre-roll ads, mid-roll ads, and product placement.
Technology development: The OTT market is constantly evolving, and there is a need for new and innovative technologies. For example, businesses can develop technologies to improve the streaming experience for consumers, or to develop new ways for OTT providers to monetize their content.
Conclusion
The OTT market is a growing and dynamic market, with a number of opportunities for businesses. By understanding the growth trends and opportunities in the OTT market, businesses can position themselves to succeed in this exciting market.
How do you insert ads into your content if you’re streaming video in a VoD environment? The answer is dynamic ad insertion, which lets you serve different ads to different audiences. How does dynamic ad insertion work for VoD? It’s a simple concept that relies on some sophisticated technology.
Quick Takeaways:
Dynamic ad insertion enables the insertion of different ads for different users into streaming video content.
Dynamic ad insertion uses server-side ad insertion (SSAI) technology to inject ads into existing streaming content.
Dynamic ad insertion lets advertisers target personalized ads to specific viewers.
Viewers benefit from seeing more relevant ads in VoD programming and experience a “seamless” stream akin to broadcast viewing.
Advertisers benefit from a more targeted audience and more efficient ad spending.
What Is Dynamic Ad Insertion?
Advertisers have long been able to insert ads into streaming video content, both live streams and video on demand (VoD). Dynamic Ad Insertion (DAI) expands on that concept by enabling advertisers to insert different ads for different viewers.
Lower revenue, poor advertiser quality, and lack of standardized measurement are top advertising concerns today.
Dynamic ad insertion in VOD content.
With the continuing growth of advertising-based video on demand (AVoD) services, advertising has become a critical part of the streaming video landscape. By using DAI, advertisers can target specific types of viewers based on viewer insights and their own campaign goals. DAI even lets OTT services deliver more ads to specific viewers of VOD content or different ads based on the viewing device. It’s all about delivering seamless insertion and personalization of the ad experience for each viewer.
The primary benefit of DAI is that, unlike traditional broadcast advertising, it doesn’t serve the same ads to everybody. DAI allows the microtargeting and mass personalization that viewers demand and that advertisers benefit from. Viewers get ads targeted to their interests and behaviors, while advertisers don’t waste their ad dollars on consumers who have little or no interest in what they’re selling.
How Does Dynamic Ad Insertion in VoD Work?
To deliver microtargeted ads in OTT programming, DAI uses server-side ad insertion (SSAI) technology. Unlike client-side ad insertion (CSAI), which embeds ads at the device and requires two players (an ad player and content player), SSAI intercepts content from the OTT provider and inserts selected ads into the existing stream. This provides a seamless transition between content and advertising and enables the insertion of dynamically selected ads. (in 2020, Pixelate estimated that 40% of streaming ads are delivered via SSAI. Today that number is significantly larger.)
This all works because streaming video assets aren’t usually single files, but rather a flood of small chunks of video. The chunks are sent over the internet from the OTT provider and then reassembled on the viewer’s computer, phone, or media streaming device. A streaming manifest describes the correct sequence for these video chunks, which also plays a key role in dynamic ad insertion.
Dynamically inserting streaming ads with SSAI is a multi-step process that involves several different entities. It looks like this:
How server-side ad insertion works.
The viewer selects a VoD program to watch.
The viewer’s media player sends a request for the VoD program to the OTT service’s content distribution network (CDN). The request includes information about the viewer to enable advertising targeting.
The CDN is configured to use an ad insertion service for its manifests rather than the content originator. It relays the viewer request to the ad insertion service.
The ad insertion service pulls the template manifest, including ad markers, from the content origin server. The ad markers tell the ad insertion service where to insert ads in the program.
The ad insertion service sends a request to the ad decision server. This request includes information about the viewer such as the viewer’s player, the number and length of each ad break, available demographic info, and so on.
The ad decision server uses the provided information to determine what ad(s) to serve for each ad break, then transmits the URLs for those ads to the ad insertion service.
The ad insertion service adds the URLs for the ads to the manifest and sends what is now a complete manifest (content + advertising) to the viewer’s player via the CDN. At this point, every viewer receives a unique manifest.
Playback begins on the viewer’s device.
The viewer sees the ad(s) as inserted into the VoD programming.
The ad insertion service or the viewer’s player generates data about the ad viewership. This data is then transmitted to the ad service for reporting purposes.
How Does a DAI System Decide What Ads to Serve?
One of the key attributes of dynamic ad insertion is the ability to serve personalized ads to individual viewers. It’s this ad personalization that offers value to all parties involved.
How does a DAI system know what ads to serve to what viewers? Ad targeting is part of the overall DAI process, based on information about the viewer provided by the publisher’s viewer’s subscription services on their devices. The OTT provider may know that viewers of a specific gender, age group, income level, and location want to watch a given program. That information enables advertisers, to attach highly personalized ads to programming that matches their viewer targets.
Bidding on specific ad slots is handled via programmatic advertising. Programmatic advertising uses machine learning and other technologies to automate ad buying and serve targeted ads to individual viewers. The State of Connected TV/OTT: Ad Supply Trends Report from Pixelate reveals that programmatic video advertising now reaches 72% of U.S. households.
The entire programmatic advertising process involves OTT providers, supply-side platforms (SSPs), demand-side platforms (DSPs), and advertisers. An SSP is an automated service that lets OTT providers sell their ad blocks to multiple DSPs. A DSP is an automated service that lets advertisers place ads with multiple OTTs via their SSPs. The OTT provider deals with one or more SSP, whereas advertisers deal with one or more DSPs.
The OTT provider tells the SSP what ad blocks are available and information about the program content and viewer demographics. The SSP transmits that information to one or more DSPs. The DSPs use that information to match available ad blocks to relevant advertisers, who’ve targeted the audiences that match what the OTT is transmitting. Advertisers can buy based on pre-determined pricing (Programmatic Guaranteed, DealID based) or, depending on the OTT provider, bid on available ad blocks via the DSP. In either case, the DSP will choose one or more advertisers to send to the SSP for consideration of inclusion in the ad break.
The result is that viewers see personally relevant ads seamlessly inserted into their VoD programming. They get an enhanced viewing experience while advertisers reach a targeted audience and get better value from their ad spend. This also benefits OTT providers, who generate greater ad revenues and keep their viewers more engaged during commercial breaks.
Contact us today to learn more about dynamic ad insertion and SSAI.
The future of television advertising is headed toward addressable marketing. Discover how to leverage these seven essential strategies to harness the advantages of targeted TV advertising.
In the wake of the 2020 pandemic-induced downturn, TV ad spending has not only rebounded but is still on a growth trajectory. Furthermore, the share of investments allocated to targeted TV advertising campaigns within the overall landscape continues to expand. For instance, according to statistics from eMarketer, the total post-pandemic TV ad spending in the United States is projected to rise by 17.7% to reach $93.33 billion between 2021 and 2025. Notably, a substantial portion of this growth is attributed to Connected TV (CTV) campaigns.
The percentage of funds allocated to CTV advertising is anticipated to increase from 16.9% to 29.4%, ultimately reaching $27.47 billion by 2025. It’s important to note that this figure does not include network-sold inventory in addressable advertising, so the actual total is likely higher.
When we extend these figures on a global scale, the potential is staggering. Targeted TV advertising is one of those rare scenarios where all stakeholders stand to benefit. I recently delivered a presentation on this subject at NAB, titled “The Pillars for Building a Successful IPTV and OTT TV Advertising Business,” and our presentation slide aptly illustrates this concept.
From advertisers to broadcasters, service providers, and viewers, Targeted Advertising brings benefits all throughout the chain. But to do that effectively it has to be set up in the right way. Here are seven key attributes you need to consider when it comes to launching your own targeted advertising solution.
7 keys to unlock the future of TV advertising
1. Everything everywhere all at once
You also require a solution that has the capability to accommodate the entire spectrum of advertising formats that can be displayed in the modern broadcast ecosystem. Even if you do not have immediate plans to use all of these formats, you want the flexibility to offer pre-roll, mid-roll, display banners, event-driven banners, content overlays, and more.
In essence, what you’re seeking is a solution that empowers you to facilitate any kind of advertising display on any platform, any service, and on any screen. The television audience has become increasingly diversified over the past decade, and television advertising not only needs to be compatible with a wide array of screens and devices but also adaptable to various viewing modes. From traditional live linear TV to time-shifted viewing and Video on Demand, viewers mix and match different options to suit their preferences and moods. Neglecting any of these options can result in missed revenue and opportunities.
2. Give viewers the choice
One highly effective strategy in the market is to provide viewers with the option to select from different tiers of monthly subscription costs, each associated with a specific ad load. Here’s an example of how these tiers can be structured:
Free Tier: This tier doesn’t require a monthly payment and is supported by multiple pre-roll and event-based ads, along with scheduled mid-roll ads.
Economy Tier: Priced at, for instance, $5 per month, this tier offers a reduced ad load, including a single pre-roll and event-based ads.
Premium Tier: For those willing to pay more, let’s say $9 a month, this tier offers an ad-free experience with no ads.
The free tier essentially serves as a customer acquisition funnel, attracting users who can later be targeted for upselling to the paid tiers. Additionally, it’s possible to introduce exclusive content or features as an incentive for users to upgrade their subscription. This tiered approach provides viewers with choices and allows the service to cater to a broader range of preferences and budgets, enhancing user engagement and revenue potential.
3. Gain meaningful insights
Legislation like the EU’s GDPR has had a profound impact on the ad tech ecosystem, pushing it to rely more heavily on first-party data. First-party data refers to the information a company has about its customers and their usage of its services. The level of detail in this data largely depends on the information collected during the sign-up process. Importantly, it’s crucial to recognize that the data you possess can be leveraged to create even more detailed segments through AI-based data analytics.
By analyzing first-party data, which includes viewing patterns and user profiles, a progressively more granular and insightful picture can be constructed, covering household composition, demographics, and even life events such as the arrival of a new baby or the potential for retirement. This data-driven approach allows for highly targeted advertising and personalized content, enhancing the effectiveness of ad campaigns while still complying with privacy regulations. It underscores the importance of not just collecting data but also harnessing its full potential through advanced analytics to better understand and engage with the audience.
4. Engage!
Data is just numbers until it is use properly, and you want to make sure you have access to the tools that will help you take all this AI-based insight into you audience and use it to boost engagement and grow stickiness with fully optimised and personalised user experiences.
Greater understanding of your audience has twin benefits. From an advertising point of view, optimised audience segmentation leads to more effective advertising and premium ad-tech rates. From an end-user perspective, increased engagement leads to extended viewing time and additional advertising market opportunities. With lead to revenue growth.
5. Don’t limit yourself to a single demand source
One of the big trends in the way that ad-tech is evolving is that the large players are looking to establish walled garden approaches that try to lock service providers into their own end-to-end ecosystem. While there are potentially some short-term revenue gains that can be realised from this, in the long-term it dramatically limits your room for manoeuvre in what is a dynamically changing system and potentially minimises your revenue potential. The best way of maximising your CPM is by combining competing ad sources, making sure you get the best price for your inventory at all times.
6. Mind the gap
TV 2 Digital is a new framework that is just starting to be deployed in the digital advertising arena by companies such as AT&T that unites the TV world with digital platforms to provide a holistic campaign that stretches across them. More than that it also allows brands to produce sequenced campaigns that target customers with new messaging as they progress along the customer journey.
For example, say in Week 1 a viewer watches an ad on a TV screen. We know they have watched the ad, so on week 2 we can serve a follow up ad to them, also on the big screen. Then, in week 3 we implement second screen activation, and follow the first two ads with a new one that appears while viewing on their smartphone.
7. Stay lean and scalable
TV 2 Digital represents an innovative framework now emerging in the digital advertising landscape, with companies like AT&T leading the way. It effectively bridges the gap between traditional TV and digital platforms, creating a comprehensive advertising strategy that seamlessly extends across both domains. What’s even more exciting is its capacity to enable brands to orchestrate sequential campaigns that adapt to customers as they journey through the advertising experience.
For instance, consider a scenario: In Week 1, a viewer watches an advertisement on their TV screen. With confirmation that they’ve viewed the initial ad, in Week 2, we can deliver a follow-up ad to them, once again on the TV screen. Then, in Week 3, we introduce second-screen activation and follow up with a fresh ad that appears while they’re using their smartphone. This dynamic, multi-platform approach empowers advertisers to engage customers at various points along their journey, enhancing the overall effectiveness of their campaigns.
7 keys, 1 action
The time to get involved in targeted TV Advertising is very much now. Technological development in the video industry as a whole is accelerating rapidly, and the ad tech technology stack is perhaps evolving even faster. Both also have to cope with dynamically changing consumer demand, which leads to not one but several sets of shifting goalposts.
Keeping these 7 keys to success in mind though will help ensure that you are not just getting ahead of the curve, you are hitting it at just the right moment with just the right tech stack. Wait too much longer, and the chances are high that the opportunity will start to diminish at the same time as the expense of playing catch up starts to increase.
Industry Insights: New research shows that there is still plenty of headroom for OTT growth even in saturated markets, while we now have a better understanding of the composition of European OTT content libraries, and The DPP sets the industry mood music for the year.
Aggregation helps drive OTT subscriber numbers
While it is often tempting to think of OTT markets rapidly becoming saturated, study after study constantly finds headroom in even the most crowded marketplace.
As Rapid TV News reports, a new study from Parks Associates has found that 60% of Pay-TV subscribers, accounting for nearly half of US broadband households, are interested in streaming films and TV shows from an online video service as part of their Pay-TV subscription. What’s more, Pay-TV providers are responding to this demand, as the number of pay-TV consumers who receive online video services jumped nearly 50% in a year.
The average number of OTT services among households that have any OTT service was found to be 3.8, while the data shows households with Pay-TV services plus at least one OTT service subscribe to 4.2 OTT services on average.
“Parks suggested that pay-TV providers must keep offering their most valuable content, which includes live sporting and cultural events,” writes the website. “Additionally, it advised operators that they must offer access to streaming, target new services to their interested customers, and perhaps be willing to take a hit on pricing until this [current] chaotic market stabilizes.”
Meanwhile, and not unrelated, data presented by stocks analyst Trading Platforms shows that Netflix still has potential for growth in the US (and, by implication, elsewhere in the world).
The SVOD giant currently has 66m subscribers in the US, approximately one-third of its global total. Trading Platforms extrapolates that to 168.9m unique viewers per month and reckons that will grow to 182.2 by 2024, an 8% increase. Subs will grow in turn to 71% by 2025.
Amazon is currently the second-largest SVOD provider in the US and will remain so, increasing its subscriber numbers to 59.8m. Hulu’s growth is impressive too as the chart below shows, rising to 49.5 million.
But it is Disney that produces the most arresting figures, with Disney+ going from a standing start to 49.8 million subscribers by 2025. That is up 118% over its 2019 already impressive debut. By the end of 2020, 72.4 million people were already tuning in at least once a month.
And while we are talking about markets and subscribers, it is worth mentioning new research that shows insights into the behavior of SVOD subscribers through the lens of what sort of moviegoers they are.
“Cinema power users are subscribed to 50% more SVOD services than infrequent goers, rent twice as many new movie releases, purchase three times as many new releases, and are around three times as likely to pirate content from unauthorized sources,” writes Digital TV Europe.
That said, it’s worth noting the YoY change across the categories for piracy in particular. It is down for the power users but up 28% YoY to just under 24% of all cinema goers, a much larger number of users, and an indication that the problem of content piracy in lockdown has not gone away.
Mapping the European OTT industry’s content libraries
The European Audiovisual Observatory has just launched its latest round of figures and, for the first time, is including television content — both series and TV films — in its LUMIERE VOD database.
How aggregation is helping drive OTT subscriber numbers 13
As its headline for its announcement of this says, it has uncovered the fact that 44,000 European films and over 12,650 European TV seasons are currently available on a total of 462 VOD services in Europe (138 TVOD and 324 SVOD catalogs). This is a lot of locally produced content, especially given the perception of US dominance in the OTT market. But it arguably gets even more interesting when you dig down into some of the details.
Here are our key takeaways from the figures.
The UK still dominates European TV
The European market has four main content producers, the UK, Germany, France, and Spain. However, the presence of UK-produced content is highly disproportionate to its size. The United Kingdom leads the pack with 44% of all content, followed by Germany (17%), France (9%), and Spain (6%). Together these four provide three-quarters of all available European TV titles on VOD.
A surprising lack of TV co-pros
While the film market featured 30% co-productions with other countries, only 12% of all European content was produced this way. The main secondary co-production countries are the United States and Canada.
Children’s content dominates
9 out of 20 of the Top 20 European TV titles present in catalogs were children’s animated series. Peppa Pig dominates, found in 69 separate catalogs in 20 countries, with the rather more adult-themed live-action Irish/Canadian co-pro of Vikings not far behind. The cultural phenomenon that is Lego enabled Denmark to snag four positions in the Top 20 with its Ninjago: Masters of Spinjitzu.
Age is no barrier
The average year of production for the Top 20 library content was 2011, though catalogs tended to trend much older than that and the average year of production of all TV seasons found on VOD in Europe was 1987. However, it’s worth noting that 60% of TV content was less than 10 years old, and it is largely outliers such as David Attenborough’s landmark BBC Zoo Quest series (1954) dragging the average down.
Assessing the mood of the industry
Some interesting insights into the year ahead come from the industry body, The DPP. Each year it considers five overarching themes, which it dubs the mood music of the year, that it thinks will inform media businesses in the year ahead.
In previous years when it has done this, you can detect a slow and steady evolution from one year to the next. Unsurprisingly, 2021 is a bit different, and the mood music selected for this year is in places wholly new.
Values
The articulation of business values, and the need to act upon them, is becoming increasingly necessary to attract, maintain and motivate employees on the one hand, and to stay relevant to customers on the other. Sustainability was the value that first broke through at the board level, but this is being joined by diversity and inclusion, wellbeing, trust, and social responsibility.
Data
Understanding the way the pandemic has reshaped the industry needs careful analysis, and companies are increasingly looking at data to provide far more nuanced views of business matters than before and inform the changes they need two make in the future.
Innovation
“Innovation is no longer a choice,” says The DPP, arguing that companies have to innovate if they are to maximize the opportunities that exist in the current slowly post-Covid market.
Adaptability
The DPP’s thoughts on this are worth quoting directly to pick out the subtleties over previous years.
“Over the years, we have seen the mood music theme of speed give way to one about agility. This refinement noted that going faster wasn’t always the appropriate response; sometimes the need is more to be highly responsive.
“That notion has been refined again this year. Many wanted to capture the widespread need for flexibility which has come with both difficult economic circumstances and the need to innovate. The notion applies both internally and externally.
Resilience
The ability to simply maintain business operations despite everything else currently going on.
The organization has also made some more straightforward predictions too, including the increased use of AI and automation and the growing importance of cybersecurity, and we’ll probably have a look at them in detail next time.
Recent Comments