The evolution of video-on-demand globally: 1990-2030[addthis tool="addthis_inline_share_toolbox_p9bf"]
Video-on-demand (VOD) came into our lives in the 90s, and it is here to stay. According to Statista, the VOD market size in revenue is very similar to the industrial robot global field‘s current and predicted numbers. The video-on-demand sector’s worldwide revenue was about 45 billion dollars in 2017, reaching 60 billion dollars in 2020, and is projected to hit a 95-billion-dollar mark in the next five years. Impressive, isn’t it?
There are a few factors that make people switch to the video-on-demand option from the traditional TV. Still, the main reasons are flexibility, personalization, and cost. There is no need to rush home to see a favorite show at a time that is not convenient to a consumer or pay for the content package that does not fit even half of their interest.
Unpredictable economic environment changes and external forces shape new consumer behaviors. All media and entertainment industry players will have to adapt to satisfy their customers’ needs and, well, to make some money! The 2019-2020 pandemic is the perfect example: strict government measures worldwide have killed (entirely or for some time) most of the video’s indirect competitors in the entertainment field. Music festivals, concerts, cinemas, and other out-of-home activities suffered losses and then started to adapt to the new consumer needs; festivals and concerts went online, while some cinema brands started to develop their own OTT platforms.
Video-on-demand is the present and the future, but how will it evolve? Deloitte has conducted broad research and came up with four possible models, one of which might become a reality for the 2030 television industry landscape. Let’s have a look at all four scenarios and discuss them after.
According to the consulting company, the first scenario is where a few digital video companies globally take over the whole industry by entering all the steps of a value chain: production, distribution, advertising, and customer relations. In this scenario, broadcasters only can operate via streaming their content on the “giants'” platforms; video advertisers disappear, and government regulation systems do not control the market at the full capacity.
Content owners are the ones dominating the video landscape. Moreover, this model predicts that content will become (or remain?) the main differentiator, while the technological features like recommendations and distribution will be considered as a commodity; hence video platforms will serve as technology suppliers purely. Quality of production over quantity – the big production houses stay, and the smaller players disappear. Advertising agencies establish a strong relationship with content creators and develop stable sponsoring strategies.
The thrive of national broadcasters and players’ alliances! Not only broadcasters have adapted to the changing market by becoming streaming services but took full control over the whole value chain: they advanced the streaming and targeted advertising technology, established strong direct relationships with consumers, and are supported by the government due to high content relevance to the local audience. At the same time, global digital companies still exist and serve as global content suppliers. Technology companies, broadcasters, and advertising agencies all coexist in a partnership environment, helping each other with relevant competencies.
“Lost in Diversity”
Rich and healthy market with lots of players and high demand for both regional and global content. Another scenario where partnerships and alliances between all industry players are highly relevant. Everyone does everything. Everyone helps everyone. Consumers are not staying loyal to only one brand but instead switch from platform to platform, from one broadcaster to another, to satisfy their content needs.
How do you see the future of the video industry?
These four models above show what type and size of the industry player will take over the market: local or global, platform, or content owner. Elements of each of these scenarios are currently present in the television playfield.
Aren’t the big five dominating the OTT market? Netflix, Disney+, Hulu, Amazon Prime Video, and Youtube accounted for more than 80% of all streaming hours at the beginning of 2020 (Marketing Charts).
On the other hand, entering the streaming market became easier over the years, and thousands of OTT platforms with niche content mostly account for the remaining 20% of the market share.
At the same time, broadcasters are not losing the battle and trying to adapt to the changing environment by creating their video-on-demand platforms: Discovery’s Disney+, CNBC’s Peacock, and Warner Brothers’ WBTV.
Enter the video-on-demand playground with allrites.
VOD is where the consumer demand is, and the current global situation is more than favorable. allrites is the go-to platform for all current media players and television industry professionals to-be. Launch your video-on-demand platform from scratch using our technology and get hours of films and series in a package – any language, theme, format, and year of production. Let us show you how!