While discussions surrounding OTT (over the top) were certainly increasing steadily over the past few years, 2020 is a year of exponential explosion of the OTT market. By 2025, the OTT market is expected to reach over $332.52 billion globally.
The rise in demand for OTT and SVOD is due to a variety of factors including expanding internet connection for emerging countries, increased consumption of mobile content, especially video, and much more. It seems as if every week someone is launching a new SVOD or OTT service, with the biggest launch this year being Disney+ which surpassed 50 million subscribers in just 5 months, exceeding even the most generous of predictions. Lockdown is also contributing to the continual climb of content consumption with 1 in 5 homes in the UK alone signing up for new SVOD services during quarantine.
The cinema industry, which was particularly hit hard during the COVID-19 crisis, turned to alternate methods of generating revenue from first-run movies using OTT services. It was an overwhelming success for the studios and content owners. Trolls 2: World Tour, wrapped up nearly $100 million in rentals in its first week. The WWII epic Greyhound was originally scheduled to hit theaters on Father’s Day weekend—perfect timing to capitalize on summer crowds in the market for a dad-pleasing option. Instead, Sony partnered with Apple TV+ in a $70 million deal to release the movie online. Successes like these signal that streaming platforms could become the movie release venue of the future. A traditional theater release would typically take over 50% of box office sales, but Universal retained around 80% of the digital revenue from the online release of Trolls 2. In response, the studio announced a strategy where they plan to release movies online at the same time as in cinemas in the future. A recent study conducted by Variety found that 70% of consumers would rather watch new movies at home.
The SVOD and OTT takeover is challenging traditional paid for TV, and recent studies show that global streaming accounts are predicted to surpass payTV subscriptions by the end of 2020. Currently, Netflix and Disney+ are owning these spaces, but it will be interesting to see how the launch of new platforms will challenge the big players. Will consumers pay more for multiple platforms? Or will they exchange the more mainstream platforms for smaller niche services more suited to their specific content needs?
The OTT race is going strong, and showing no sign of slowing down. The benefits are only increasing. One benefit is the fact that OTT is incredibly agile. Content providers can react in real time and serve up relevant programming in response to current events. Online delivery allows companies to respond in a timely manner to global movements, such as the Black Lives Matter Movement, with content collections focused on sharing Black voices and stories, as well as the Women’s Movement, the Me Too Movement, and more. Another example is if, say, a notable actor, activist, or other public figure passes away, content owners can quickly and dynamically build a content collection of TV and films about or featuring that person, providing viewers with convenient access to easily consume art and information about them. This type of experience is best served by OTT platforms, and they’re only becoming more adaptive.
The OTT experience is unique to the viewer. Sophisticated services, like Netflix and Amazon Prime, gather data on individual viewing habits and use artificial intelligence to construct personalized content menus that are highly aligned with personal preferences, which is one way of ensuring ROI. Services like Netflix and Amazon are also allowing parents more control with the ability to filter content and create childproof user accounts. New services like Kabillion dish up strictly kid-friendly content that is safe to watch and educational. Some are calling it the online babysitter because parents can feel safe plopping their kids in front of the TV knowing that the content will be age-appropriate and they won’t be barraged with advertisements.
But it can’t all be roses and sunshine–one less than favorable factor of the popularity of OTT services is the extra few pounds, or kilos, people are noticing when they step on the scale. Unlike cable where you had to wait each week for the next episode, audiences are becoming glued to their sofas as they binge all the episodes of their favorite shows, which are released at the same moment. It follows that with the consumption of endless content comes an increase in the consumption of endless snacks. Studies have shown spikes in ordering on food delivery apps on weekends between 10pm and 1am, which is also primetime for binge watching on OTT platforms. Food delivery apps have even modeled their user experiences off of Netflix and its personalized recommendations. Open up any app like Postmates or Uber Eats and you’ll notice they’re using AI-driven algorithms to satisfy your hunger in much the same way that platforms like Netflix use artificial intelligence to offer personalized recommendations with a menu of shows that are likely to appeal to you.
Overall, OTT is taking the world by storm and we are really only at the beginning of further widespread adoption by the industry and consumers, with numerous launches of OTT and SVOD platforms challenging the major players. All of this will make for an exciting road ahead for the innovative technologies, including OWNZONES Connect™ and OWNZONES Discover, that are driving the management and distribution of content to OTT platforms.
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