Viewing experience will be critical for OTT success in 2022.
The year 2022 is the first to start with OTT already ahead of traditional linear viewing measured by total hours watched, and this is driving many content owners and broadcasters outside the realm of the great media and SVoD providers to seek ways of harmonizing their delivery across all their channels and outlets.
For traditional PSBs (Public Service Broadcasters), standards such as the DVB-I have risen up the agenda with their goal of delivering any content to any device via any method, which means harmonizing the four principal mediums of terrestrial, cable, satellite, and internet within a common framework for metadata, media encoding and data delivery.
More than just delivery though, for all parties including emerging content providers as well as PSBs, the viewer experience over OTT will be critical to success or even survival. A major subplot here is the improvement in streaming and viewing quality over mobile networks driven by higher specification devices, especially smartphones, and the roll out of 5G networks at higher bit rates, greater capacities and lower latencies. This is driving viewing on the streaming side from desktops and laptops towards smartphones on the move. Indeed, it is likely that the number of people worldwide viewing on mobile devices, primarily smartphones but also cellular-connected tablets, will overtake those using laptops or desktops during 2022.
The importance of catering for 5G specifically within the DVB-I standards for streaming was acknowledged early on by the DVB. This led to the DVB approving commercial requirements for DVB-I service support over 5G networks in July 2021, with work also commencing around a Technical Module to provide extensions to relevant existing specifications. The latter included DVB-I service discovery, and also DVB-DASH to address use cases and requirements collected and agreed by that Commercial Module.
This will all unfold during 2022 with a variety of benefits on both the delivery and user experience fronts. Two aspects stand out, the first being elements, some of which are incorporated in the global 3GPP 5G standards, for delivering video content robustly at high quality to devices in fast moving vehicles or trains, where a growing amount of viewing is taken place. Then in terms of added value there is support for advanced video use cases around Extend Reality (XR), including AR (Augmented Reality) and VR (Virtual Reality), which involve heavy graphics rendering, requiring device processes on device to be assisted by offloading part of the workload to system located in nearby edge clouds.
So, graphics rendering on the edge cloud will augment latency-sensitive head tracking, controller tracking, hand tracking and motion tracking on the device. Indeed, as the DVB has pointed out, a “particular benefit of DVB-I services over 5G is the ability to support integrated DVB-I hybrid services, that is services for which the basic broadcast distribution is augmented with unicast for extended service coverage, lower distribution costs, improved quality and additional user experiences.”
Apart from immersive streaming, which will deliver increased amounts of 4K video and 360-degree live broadcasting over mobile networks during 2022, admittedly from quite a low base, the DVB correctly envisages some growth of more socially relevant content over the year. That raises some interesting questions, because social sharing of content was an abiding theme of the Covid-19 pandemic and associated lockdowns, as consumers congregated online around popular series and also some live transmissions, in lieu of attending events at cinemas, theatres and concert halls. The extent to which that will generate further traction depends partly on the options available, which makes a recent development by Amazon Prime Video to allow free sharing of clips highly relevant.
This trend has roots almost before the pandemic began as major streamers introduced various options for sharing content over social media such as Facebook and Twitter, and supporting communication or interaction among subscribers that way. The fast-growing Disney+ for example, which now has 118 million subscribers with ambitions to overtake Netflix as the world’s top SVoD service by 2024, was actually later than some major competitors getting into content sharing with the launch of such a facility in October 2020, well into the pandemic. It became fairly popular and may have helped drive that explosive growth in subscriptions, but is not likely in that form to loom that large during 2022. That is because although the feature allows sharing of links to selected titles, so that recipients over Facebook, Twitter or a messaging app can go straight to it, they have to take out a subscription to access it if they do not already have one. So, it was primarily a social integration feature for existing subscribers, rather than anything of a free lunch for friends.
It took until November 2021 for Amazon to take a bolder step by announcing that subscribers to its Prime Video service could share video clips lasting up to 30 seconds with friends over the associated iPhone app, free of charge even to non-subscribers. Amazon was testing the waters as the feature was confined to only a few shows initially and to iPhone users, but nonetheless this signalled a radical departure from its competitors. Users tap on a share clip button and can then select the part of the show to be shared, which is then done using Apple’s own built-in sharing feature, or posting on social media.
This looks like the way forward for social media video sharing, offering both subscribers and their friends some meat to chew on while promoting the brand and service. We can expect that to be extended to more of Amazon’s content and to the Android platform.
Amazon is also shining a torch for the streaming industry with its moves towards aggregation. Like its big rivals such as Disney+, Netflix, AT&T’s HBO and perhaps even Apple TV+ in future, Amazon is also majoring on original and sometimes exclusive content to drive subscription growth, but with its centre of gravity tilted towards ecommerce, it has greater interest in becoming the streaming retailer of choice. This has led to its Channels strategy for distribution of third-party content, emulating its third-party sellers’ arm for online retailing. There has been some of this among competitive pay TV operators, noting for example the mutual inclusion of live sports channels between Comcast’s Sky and BT in the UK.
But with the fragmentation that occurred on the SVoD side as the likes of Disney pulled content from Netflix to drive sales of their own subscriptions, there has been some push back from consumers as reflected in various surveys during 2021. We see this playing out in two trends that seem in opposition during 2022. On the one hand, there will be a continued drive towards original production of high value blockbuster content among the big few global SVoD players, with Apple raising its game by tapping into its huge cash reserves here to get a fast leg up into the field. At the same time, there will be more partnerships between streaming services and pay TV networks over content bundling to satisfy that consumer demand. That then may present opportunities for operators, although it will largely be confined to mid-tier material. That said, there are also some opportunities for traditional broadcasters and operators to collaborate with the big streamers.
There will be further growth in watch parties such as Sky’s NOW TV tried successfully during the EURO 2020 association football tournament held during 2021.
The SVoD brigade no longer have it all their own way as there has been substantial growth in AVoD (Advertising VoD), which is set to continue during 2022. AvoD has been bigger than SVoD from the outset in most developing countries such as India and Malaysia where ARPUs (Average Revenue Per User) have been historically low and resistance to paid subscriptions high. That has been mirrored to some extent among lower net worth consumers elsewhere, especially in the USA, which has served as a foundation for expansion of AvoD into the middle classes over the last few years, curtailing some of the growth for SVoD. This has led to the rise of AvoD services such as Pluto TV, now owned by ViacomCBS, and Tubi owned by Fox Corporation. Both continued to gain active users and revenues during 2021 and are on course to accumulate more during 2022. As of September 2021, Pluto TV had scaled 54 million monthly active users, while Tubi has been predicted by analysts to reach $700 million revenue in 2022, up from $145 million at the time Fox purchased the company in March 2020.
Significantly, Comcast parted ranks with its major media competitors by making its Peacock OTT service partly AVoD rather than subscription funded, noting growing demand for free or at least ad-supported streaming services in the USA. A significant further development came early in January 2022 when Peacock announced it would livestream all of the Comcast NBCUniversal coverage of the Winter Olympic Games in Beijing, the first time the company has offered complete coverage of a traditional pay TV subscription online. This is a significant development not just for NBCU, which streamed only selected sports on Peacock for the Summer Olympics in Tokyo, but for the whole streaming field. The premium Peacock tier providing this coverage costs $4.99 per month with ads, quite a lot less than rival fully subscription-based packages.
Also significant was the announcement that Pluto TV is bringing its AvoD model to Europe for the first time. This is happening through incorporation of the Nordic Viafree service into a new version of Pluto TV, tailored for the Nordics, through a partnership between ViacomCBS Networks International and Nordic Entertainment Group (NENT). This will launch in 2022 and combine content from Viafree with the regular Pluto TV FAST/AVOD service. FAST (Free Ad-supported Streaming TV) is an acronym whose currency looks like extending from the USA to Europe during 2022.
With advertising growing on streaming services, there will be more focus on the technologies that liberate and maximize revenues on this front. This revolves particularly around targeting, since OTT is by definition one-to-one except when delivered to connected TVs in the home. OTT also enables interactivity, presenting opportunities for brands to engage with consumers directly and obtain feedback. This will lead to growth in interactive advertising inviting actions and data driven marketing, which feed into targeting.
An underlying challenge for smaller service providers especially lies in establishing consistent end-to-end delivery to wherever their customers are. At the same time, vendors of equipment have to cope with multiple integrations to ensure they can participate in end-to-end ecosystems. These factors combined have been driving vendors into partnerships and coalitions, and this will continue during 2022.
One example is a coalition between Italy’s MainStreaming, Globecast and France’s Viaccess-Orca reached during 2021 to assemble an OTT platform. Globecast encodes feeds, then delivered to the MainStreaming backend as an RTMP or MPEG-DASH stream. The feeds proceed to be fully managed by Viaccess-Orca’s TV Platform as a Service (TVaaS), including content protection through multi-DRM and secure player.
Another example highlighting video contribution opportunities came late in 2021 when Haivision and Grass Valley announced support for high-quality, low-latency multi-camera live contribution into Grass Valley’s GV AMPP (Agile Media Processing Platform) cloud production workflows.
The Haivision Makito X4 transcoder combined with the GV Media Universe for synchronous multi-stream live contribution to the GV AMPP.
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