By Shaun Lim
They say that familiarity breeds contempt while trumpeting the very real impact of viewer fatigue. Yet, the numbers speak for themselves. According to analyst firm Ampere Analysis, global over-the-top (OTT) subscription revenues hit the US$100 billion mark in 2022, while German online platform Statista predicts OTT TV and video revenue to reach the US$215 million mark by 2029 – hardly signs of a declining industry.
While consumption patterns continue to evolve and consumers cut back on spending as uncertainties over the global economy continue to loom large, it is clear that quality content that is affordable and easily accessible will continue to appeal to audiences seeking a temporary deviation from the stresses of their daily lives.
As operators continue to devise winning strategies to engage their audiences and attract new subscribers, app-management platform Applicaster has identified six shifts that are changing the OTT industry.
Asia: The next bastion for streaming services?
Surprisingly, Western Europe is likely to overtake Asia-Pacific as the second biggest OTT growth region in 2024, according to Ampere Analysis. However, collectively, these two regions are poised to challenge North America’s dominance of global OTT revenue streams in the near future.
Ampere Analysis also predicted that by the end of 2023, over 40% of the world’s streaming subscribers were found to be in Asia, a fact that has not gone unnoticed by the giants of the video streaming industry.
Netflix’s local content investment reportedly reached US$1.9 billion in 2023 and jumping on the global bandwagon for all things Korean, Netflix has committed to spending $2.5 billion on South Korean film and TV production through to 2027.
Content for everyone: The rise of verticalised content
For myriad reasons, TikTok has grown to be arguably one of the most divisive video-sharing platforms in the world. TikTok recorded 1.5 billion monthly active users in 2023 and is expected to reach two billion by the end of 2024.
It has also become a surprisingly effective way to build a community. BookTok, a subcommunity on TikTok that brings together authors and bibliophiles to discuss their favourite works of literature, boasts 181.7 billion viewers as of September 2023.
Niche and vertical markets, it would appear, are increasingly turning to OTT platforms to expand their reach and to distribute content.
According to Applicaster, OTT platforms focusing on cooking, music instruction and mediation, for example, have experienced an uptick in subscriptions, demonstrating a consumer demand for content that aligns closely with individual passions and needs.
“As they tailor their content and services to meet the specific desires of niche audiences, vertical streaming platforms are becoming an integral part of the broader OTT landscape’s growth, heralding a new era of streaming that is more segmented yet deeply connected,” Applicaster added.
Defining hyper-personalisation in a new streaming era
Besides offering verticalised content, operators must also prepare themselves for a future of infinite personalisation in streaming services.
The industry, according to Applicaster, is heading towards the transformation of user interfaces, moving from static designs to dynamic experiences uniquely tailored to each individual’s preferences.
“The once-universal design templates are giving way to flexible, intelligent frameworks capable of adapting to subtle nuances in user behaviour, regional preferences and cultural influences,” Applicaster wrote.
“This approach extends beyond the content, encompassing navigation patterns, colour schemes and interaction styles, creating a streaming experience that feels intuitively personal and giving users what they want and expect.”
Generative AI’s transformative role in OTT
That AI in all its guises, has impacted multiple industries in 2023, is indisputable. For the OTT industry, generative AI will continue to have a pronounced impact in 2024 and beyond.
Generative AI, capable of creating content from minimal prompts, is “revolutionising” OTT operations by lowering barriers to content creation and diversifying available stories and voices.
This, said Applicaster, not only speeds up the production process but also enables the delivery of content that aligns closely with audience preferences, thereby enhancing viewer engagement and satisfaction.
While the Hollywood screenwriters who initiated last year’s strikes may not look so favourably upon AI, Applicaster is convinced that as AI redefines the dynamics of OTT platforms, it will present an opportunity for these services to transition from traditional content distributors to dynamic content creators.
“This evolution involves leveraging AI for rapid and varied content production while uploading the quality and authenticity that audiences demand,” Applicaster explained.
A FAST way to shape the future of content consumption
To circumvent the reluctance of some consumers to pay subscription fees for streaming services, a new TV streaming format is likely to gain traction in 2024.
Free Advertising Supported Television (FAST) presents content in a linear format, although viewers can choose when they want to consume the content. In terms of advertising, FAST differs from the advertising video-on-demand (AVoD) format increasingly being favoured by the likes of Netflix and Disney+. While some AVoD programmes allow consumers to skip commercials, this is not an option for FAST programmes.
Another drawback for FAST, Applicaster identified, is discoverability, where a vast array of FAST channels makes it difficult for individual channels to capture attention in a crowded marketplace.
“For OTT app owners, the key is to integrate FAST into a broader, more nuanced content strategy rather than relying on it as a singular solution. Incorporating linear channels alongside on-demand content within an OTT app offers a diverse viewing experience, catering to varying consumer preferences,” said Applicaster.
An all-in-one approach to OTT
At the zenith of the pay-TV era, it was commonplace for many consumers, particularly sports fans, to subscribe to bundled packages to access their favourite sports content.
Is this approach making an enjoyable renaissance within the streaming industry? Verizon, for example, is reportedly planning to offer customers a discounted bundle of streaming services that includes the ad-supported tiers of both Netflix and Warner Bros. Discovery’s Max.
This approach, Applicaster highlighted, serves as an innovative solution to the high cost of user acquisition prevalent in traditional marketing. “By forging partnerships, streaming services can tap into new audiences, often with the added benefit of receiving payment for their content.”
Crucially, consumers are paying a fraction of the money for such bundled services, when compared to the costs they had to fork out to enjoy bundled pay-TV services. Affordability, it would appear, ranks up there with accessibility and quality of content when it comes to attracting eyeballs in an increasingly saturated market, and may be paving the way for the return of previously tried-and-tested methods.
“As the OTT industry continues to grow, bundling strategies are setting the stage for innovative user acquisition and retention models, reshaping how streaming services are expanding their reach and impact,” Applicaster concluded.