The Future of Video Streaming: How Technological Advancements Alter Business Practices

23 July 2019
By Max Kalmykov, VP, Media & Entertainment at DataArt

The Future of Video Streaming How Technological Advancements Alter Business Practices”

As streaming video content becomes a daily activity for a rapidly expanding number of people, the relatively young industry must develop fresh strategies to improve services to meet the increasingly high expectations of consumers in the ever-changing video streaming marketplace.

With a smartphone, tablet, or laptop on hand at all times—and often more than one of these devices being used simultaneously—the modern American can stream videos at practically any point throughout their day. And the percentage of consumers that are taking advantage of this availability is skyrocketing. However, according to results from Penthera’s Q1 2019 US Mobile Streaming Behavior Survey, a growing number of people consider the current streaming services less than ideal, with 88% of respondents indicating that they find streaming content to be frustrating at times. It’s also important to note that this percentage increased by 7% since 2018, illustrating the need for VSPs to improve their offerings in order to remain relevant in the highly competitive marketplace.

 

Reducing Frustrations

There’s no question that the video streaming industry is on the rise in a big way. At the same time, consumer expectations are rapidly changing. With technological advancements at the forefront of this burgeoning marketplace, what do VSPs need to do to satisfy viewers?

Unfortunately, video streaming can result in a variety of frustrations. From connectivity issues to rebuffering in the middle of a show, consumers are becoming less likely to be okay with the idea of experiencing problems during their viewing experience, with 57% of respondents in the Penthera survey considering frustrations to be “unacceptable.” Furthermore, 56% of respondents indicated that they completely give up and try later if faced with issues that include a video taking too long to start playing, buffering, and increased monthly data costs. These concerns lead 20% of consumers to quit using a service if their streaming experience is less than ideal.

The survey results clearly indicate the need for technological advancements in the video streaming industry. To thrive in the evolving ecosystem, VSPs must provide high quality video with stable delivery while improving content access, expanding discovery services, and creating a sense of community and engagement throughout the consumer audience.

 

Quality Is King

Viewers today expect high quality video in every situation, whether they’re using a mobile device, laptop, or TV, as the video industry advances to keep up with the rapidly changing times. And it appears that connected televisions are leading the way in terms of growth, with the potential for touchscreen technology to become a major TV feature in the near future.

According to survey data from Leichtman Research Group (LRG), the penetration of internet-connected television devices tripled in American TV homes from 2010-2018, rising from 24% to an incredible 74%. LRG’s survey results also indicate that 29% of adults in US TV homes watch video on a television using a connected device on a daily basis, while 29% of all TVs in American homes are connected smart televisions. Another interesting statistic coming from this survey is the fact that daily viewing of video on a TV via connected devices is most prevalent among the highly sought-after 18-34-year-old demographic, at 43%.

 

Shifting Monetization Models

As more consumers choose to “cut the cord,” broadcasters and content owners are faced with the necessity to devise monetization models that are effective in the ever-changing video viewing landscape. While the consumer behavior shift opens up a multitude of opportunities, the changing ecosystem also presents many challenges, as the demand for Connected TV (CTV) and over-the-top (OTT) advertising skyrockets.

One of the complexities involved in moving an increasing percentage of ad spending budgets to CTV/OTT is the need for marketers to ensure that their content providers are truly delivering sufficient video quality to meet the expectations of consumers, as simply claiming to deliver “premium video” may not end up hitting the required quality. Broadcasters and content owners may also find themselves struggling with inventory distribution and management issues, often resulting in the decision to develop their own methods for ad delivery and insertion.

Hulu is one of the many companies choosing to launch its own programmatic marketplace through a partnership with video management platform Telaria to take advantage of Telaria’s ad server, which is designed for CTV and OTT inventory. Another example comes from Roku, which launched Activation Insights, an OTT planning tool intended to assist buyers in understanding the most effective percentage of their budgets to shift from linear TV to OTT to maximize revenue.

Ad fraud is another serious issue arising from the massive growth of OTT. The lack of widely-adopted industry standards combined with the rapid market expansion creates a hotbed for ad fraud schemes as the potential returns substantially increase.

 

Technology Shapes The Future

Considering the monumental changes in the video industry, where do we go from here?

Technology is at the forefront of the innovations in our business, with AI and ML taking the lead. The video industry is already utilizing these technologies in a variety of ways, and I expect the importance of AI and ML in the world of video to increase dramatically in the coming period. Video indexing is a great example of AI in practice, as the technology is being used to automatically extract metadata from video content, thereby saving an incredible amount of time in comparison to manual tagging while enhancing the analytics that can be used for targeted advertising, video recommendations, innovative monetization strategies, and much more. Some companies are taking AI further, such as experimenting with using this technology to analyze screenplays to determine which ones should get the go-ahead. Many other components of the industry are poised to benefit and change due to the application of AI and ML, such as digital distribution and other core aspects of the video business.

Additional noteworthy advancements will come from 5G and cloud processing, as the much faster connection and processing speeds carry the potential to greatly increase video quality while reducing latency, thereby radically expanding the possibilities within live event coverage and other content delivery in the future.

The video industry is undergoing major changes, and technology is allowing us to make previously impossible dreams into reality. As consumers increasingly “cut the cord” in favor of alternative viewing platforms, we are on the cusp of a video industry revolution with enhanced experiences for us all. The sky’s the limit!


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