The global OTT market is expected to reach over US$ 2,673 million in 2022 according to Statista. OTT has successfully leveraged the internet infrastructure to deliver content directly to the viewers bypassing the loopholes in the traditional distribution and media networks. This gives them much more flexibility in choosing the content they want to consume and the time at which they want to access the content. In this blog we will analyze how OTT is constantly changing the dynamics of the media industry.
OTT Video Streaming Market Growth
- Global growth of OTT revenue will rise from $69 billion in 2018 to $129 billion by 2023.
- The largest segment is OTT Video Advertising with a market volume of US$106,879m in 2022.
- Market penetration of OTT video technology in the US is over 70%, with the average user subscribing to 3.4 OTT video services.
- There are over 300 OTT video streaming service providers worldwide, with more than 200 in the US alone.
How OTT is changing the Dynamics of the Media Industry?
The growing popularity of OTT media platforms has also made it the preferred choice for broadcasters to deliver their content to the targeted audience. Lets see how OTT is changing the entire media landscape.
OTT Platform Helps Build Direct Connection with Customers
Initially, broadcasters used to rely heavily on traditional distribution methods like cable and DTH platforms to distribute their content to viewers. The advent of OTT media streaming has made it easier and more convenient for broadcasters to directly showcase their content to customers directly without the intervention of middlemen.
This helps build a direct relationship with the users on the OTT platform. It also helps them create a strong brand image and improves brand recall. In addition to showcasing content directly, broadcasters can also obtain detailed insights about how users are interacting with their content with the help of analytics. Data-driven approach helps them churn out better content especially tailored to their customers’ preferences.
Seamless Content Viewing Experience across Multiple Devices
One of the most pronounced reasons the OTT industry is making advances in how they provide their services is because of the hugely improved customer user experience (UX) that they offer. One of the ways of achieving this is offering seamless content viewing experience over a variety of devices and platforms.
With OTT, it’s more convenient to stream and watch content. Viewers can watch whatever they like at their preferred timings on their preferred devices. A seamless viewing experience across multiple devices and platforms is a must-have for OTT platform owners who want to build a sustainable following and audience base. A multi screen OTT experience is one of the main reasons for the streaming industry to gain an ever growing customer base. Sadly, a traditional cable network can barely cut the mustard.
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OTT is the Top Option for Advertisers
You will be amazed to learn that the total ad spend for OTT platforms is forecast to exceed $300 billion and the global ad market over $700 billion. As the popularity of OTT platforms is growing among the audience, advertisers want to showcase their products on these platforms to obtain quality traffic and a suitable audience. This helps to increase their marketing ROIs and also leads to higher conversion rates based on user behaviors and preferences.
OTT has Led to More Cord Cutting
With the exponential growth of OTT video streaming, the competitive dynamics of the OTT vs pay TV war have changed greatly. The most obvious losers due to these tectonic shifts in content consumption are traditional broadcasters and cable TV operators. Cable TV operators are losing subscribers because of high prices and lack of comparable choices leading to the phenomenon known as “cord-cutting” that has made drastic changes in the broadcasting market. Nearly half of US 22-45-year-olds don’t watch traditional TV at all and it’s estimated that there will be 55 million cord cutters in the U.S in 2022.
Cable TV Operators Joining Hands with OTT
The constantly increasing numbers of cord cutters have led to the downfall in revenue for traditional cable TV broadcasters who are now seeking innovative ways to lure back their viewers. Due to the immense popularity of video streaming amongst millennials, traditional TV and film giants are now seeking to join Netflix and Amazon. Their bet is that, considering the growth of OTT video streaming services, it’s better to be part of the streaming industry and benefit from it rather than trying to fight an OTT vs pay TV battle they seem to be losing. NBCUniversal, Disney, and Warner Media have already introduced their own OTT video streaming services, increasing the competition and prices for legacy shows.
OTT is Powering Emerging Technologies
As emerging OTT video technologies are utilizing artificial intelligence (AI) to enhance the customer experience. By using AI to determine what customers actually want to watch, OTT service providers can earn more revenue and deliver more personalized experiences to retain customers. An excellent example of this, Netflix revealed that it has saved $1 billion a year with AI technologies.
Also emerging technologies like 5G synonymous with high speed and ubiquitous connectivity will ensure OTT experiences like never before that don’t keep buffering, lags behind annoyingly, or unwanted pixelation. 5G powered OTT will give a massive boost to both live streaming and VoD with its 10x decrease in end-to-end latency, 20X faster speed, and higher bandwidth.
OTT is here to stay and with more and more broadcasters opting to go OTT, it will continue to dominate the media and entertainment industry. As a content creator, it’s high time you realize how important it is to ride on this wave unless you want to lose out in the long run. Between the ongoing Pay TV vs OTT battle, The viewership is gradually escalating on the OTT side, giving you a green signal to not miss this golden opportunity of directly showcasing your offerings to your viewers.
At Muvi, we believe that the OTT video streaming industry will provide new opportunities for broadcasters and cable providers to grow their reach.
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