Video Industry Outlook For 2021: Tech Innovations Lead the Way

After the tumultuous hurdles of the pandemic, the video streaming industry is stronger than ever and proved once again that it’s the future of the visual media distribution. Max Kalmykov studies the data from the passing year and comments on the projections for the first half of the decade.
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By Max Kalmykov
Vice President, Media & Entertainment
Video Industry Outlook For 2021: Tech Innovations Lead the Way

Looking back on the passing year, we yet again see an expansion in the video streaming industry. The positive change was there for the last decade, but this year, unlike any other year, proved the relevance of video streaming in entirely different ways.

Although the obstacles we’ve faced have been unprecedented in our lifetimes, the pandemic has forced the video industry to examine itself — both the good and the bad — thereby sparking inspiration to improve services and develop innovative technologies that will enhance video content and consumption for many years to come.

But will the momentum translate to 2021, how will the financial hardships in post-pandemic economy affect the user bases of streaming platforms, and what feature is more likely help retain users in 2021?

Capitalizing on Video Consumption Surge

In one of my earlier articles this year, I highlighted how the stay-at-home protocols created a significant increase in video streaming consumption. Lockdowns were set and lifted off, and then set again, but the positive upward trend stayed on throughout the year, according to recent data from Statista.

a graph showing the rise in the number of streaming subscribers from past years and projection for the upcoming 5 years, source: Statista

Statista’s projection from September 2020 illustrates the massive rise in streaming revenue.

a graph illustrating the revenue increase of the global video streaming marketplace, source: Statista

As video streaming takes hold of the global marketplace, the number of users will continue to skyrocket in the coming period.

While the expectation for extraordinary growth is unquestionably positive news for the video industry, rapid expansion presents a distinct set of challenges. Service providers must implement effective technological solutions to ensure optimal consumer experiences, from the logistics of handling spikes in network traffic to making the necessary adjustments to video encoding protocols.

In addition to the necessity to deliver content without any technical difficulties, focusing on the needs of consumers is paramount for success in the expanding video industry. Customer engagement is crucial, as viewers increasingly desire a highly personalized entertainment experience.

As Kevin Westcott, Deloitte’s vice chairman of US tech, media, and telecom, wrote in the company’s 2021 outlook report, effective customer engagement in today’s climate is a highly-nuanced undertaking. Deloitte’s COVID-19 Digital Media Trends survey found 39% of respondents reporting a decrease in their household income since the pandemic started. Consequently, the churn rate among OTT services in the US has increased from 35% in Q1 2019 to 41% in Q1 2020. Therefore, now, more than ever, it’s essential for video delivery platforms to understand the financial constraints of customers and respond by offering various subscription models to help consumers continue to use paid services – e.g., Hulu’s ad-supported plans.

Original content will continue to be a major enticement for drawing in consumers. At the same time, it’s vital to deliver an exceptional customer experience to develop viewer loyalty and gain market share in the increasingly competitive video industry ecosystem.

Meeting the “On-Demand”

The number of streaming platforms has been steadily increasing over the years. It’s not just Netflix for movies and TV shows, YouTube for user generated content, and Facebook for live videos anymore. To understand how truly crowded the streaming industry is, just take a look at Flixed’s streaming service list – there are currently more than 200 services listed here.

The number of streaming services is likely to grow even more in the near future. It’s not just about streaming services that are designed to consume film and TV shows, but also companies and creators who want to distribute their video content on their own terms. The landscape in that aspect will soon become more democratized and accessible to smaller companies. Soon, companies won’t need millions of dollars’ worth of investments to get their own platform up and running.

It is with this goal in mind that our team came up with DataArt Octopus ­– a white-label streaming platform to help companies get started in the video streaming scene in significantly less time at a fraction of the cost. We took our experience and poured into creating a truly flexible and scalable solution for companies who want to get a quick start in the streaming scene. Learn more how DataArt Octopus can help you launch your streaming platform, or integrate a streaming function to your existing platform, with significantly less money.

Tech Innovations for The Win

Consumers have a seemingly endless number of options at their fingertips, and their expectations for a superior viewing experience have never been higher. Because of these realities, patience for technical difficulties is scarce. If a platform fails to deliver content reliably, its chances for success are gone. And considering the massive network load, as video consumption expands, the companies utilizing the most advanced, well-planned technical infrastructures will come out on top.

In addition to the importance of consistently reliable delivery, tech innovations will make the difference between struggling to gain market share and becoming the platform everyone’s talking about. As we look to the new year, new methods for content discovery and recommendations will surface, taking the existing formats to a whole new level of engagement and interest for consumers.

Although this has been an extremely challenging period, the video industry is growing exponentially. It’s an exhilarating time for our business, with all eyes on the next wave of innovations that will gain traction with viewers.

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