Video consumption swelled in 2020. That’s a fact. Netflix alone added over 37 million new paid subscribers last year, while other OTT video streaming services and live broadcasters are getting a sizable new chunk of audiences, too.
But is the popularity of streaming services here to stay for the long term? Or will consumers once again shift gears and move to yet another entertainment medium? The MAZ team lined the latest facts and stats, offering a glimpse into the future of streaming media.
Pandemic-Prompted Boom of Streaming Services
Many consumers developed a strong appetite for live video and online digital media over the dire months of lockdowns.
Comscore reports that 72% of households with internet access streamed video on connected TV screens last year.
- The average household viewed over 102 hours of OTT content in April 2020, up by 17 hours compared to April 2019.
- The total viewing hours across VOD, OTT, DVR, and TV increased by 2.3 billion over the last year. OTT specifically clocked in an extra 1.4 billion viewing hours.
- Consumers are increasingly giving up traditional TV. Over 21% of digital media viewing households are cord-cutters, and another 21% are “cord nevers” — people who didn’t have a cable subscription for linear TV in the past 5 years.
Overall, the global OTT video streaming market grew at an astounding CARG of 55% in one year, tallying a total of $161 billion. The best part? The video streaming market is catching up in nearly every corner of the world.
Image Source: Capgemini
Yet, the breakneck growth rates left many businesses wondering: is the demand long-term, or are we soon hitting a plateau? Will the same staunch levels of OTT media consumption remain in 2021 and onward? Data says very likely.
The OTT Media Streaming Market in 2021-2026
In 2021, the OTT market is projected to expand by an extra $23 billion, then grow to $210 billion by 2026.
Subscription video-on-demand (SVOD), in particular, is projected to be one of the fastest-growing verticals, with revenues increasing by $126 billion between now and 2026. However, advertising video-on-demand (AVOD) will be coming close with a projected increase in revenues of $66 billion — or 32% of the total OTT revenues by 2026.
Though English-speaking markets (the US, the UK, Canada) will remain the most profitable targets, research suggests that other markets are getting heated too:
- China’s OTT market is projected to hit $24 billion by 2026.
- Japan’s OTT market is expected to double to $9.2 billion in the five-year perspective.
- OTT revenues in India can triple to $6.7 billion within the same period.
- Western European SVOD subscription base is expected to reach 234 million by 2026, up from 137 million in 2020.
What will foster such rapid growth in revenue? Several factors. For one, consumers have grown fond of the convenience and variety streaming video services provide. However, as Deloitte reports, the majority (46%) are also highly price-sensitive and name “cost” as a decisive factor for subscribing to a new paid video streaming app. For that reason, among others, many publishers are exploring alternative monetization strategies such as the aforementioned AVOD, direct sponsorships for live broadcasting, and e-commerce/retail integrations into video content.
So it makes sense that advertising revenues among OTT media streaming platforms are poised to boom too. BIA forecasts that OTT ad spending will cross the $1 billion mark this year and then grow to $2.3 billion by 2025. Shoppable livestreams are another commercialization trend going stronger this year. As an emerging branch of e-commerce, such feeds, hosted by retailers directly or in partnership with streaming services, have already proven to attract large audiences and sizable revenues. Last year, livestream shopping in China generated over $136 billion in revenue for participating retailers. Enticed by the success rates, more and more Western retailers are jumping on this bandwagon too.
Increasing Consumption of OTT Streaming Video
OTT streaming democratized access to curated content, which consumers can access on their own terms for a flexible fee. And this trend is far from abating any time soon as new players — from individual publishers to Hollywood studios — enter the OTT market.
With the upcoming mass-arrival of 5G connectivity, commoditization of video streaming app development, and technological improvements in video distribution and delivery, it’s safe to say that the OTT media streaming market will peak even further!