In the mid-2000s, data speeds and bandwidth costs had improved enough to support larger amounts of streaming video. Since then, streaming services like Netflix, Hulu, and Amazon Prime have been growing steadily, and traditional TV usage has been declining. With the rolling out of 5G wireless technology and the rise of artificial intelligence, streaming services are offering better and more personalized services to their users.
Streaming Platforms Take Hold
As we enter the new decade, we can say with confidence that streaming is the future. The traditional TV industry is losing viewers at a rapid rate, and while cable TV is still hanging on, younger viewers tune into streaming services more and more.
According to data from Leichtman Research Group (LRG), the number of internet-connected television devices in US TV homes tripled between 2010-2018, growing from 24% to a staggering 74%. There’s no question that video streaming has become commonplace, as the modern American increasingly streams content throughout the day on their smartphone, laptop, and other devices. Research from TDG predicts that legacy pay-TV subscriptions will decrease by 26% by the year 2030, serving as a further indication of the continuing shift of video viewing to streaming apps/platforms over the coming decade.
“TDG said early on that the future of TV was an app. Unfortunately, most incumbent MVPDs weren’t taking notes. The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system.” – Joel Espelien, Senior Analyst at TDG Research.
Streaming services offer a number of benefits over their traditional counterparts. One of the biggest of these is content on-demand. The content you want to watch is there for you when and where you want to watch it, whether that's on your phone, on your computer, or on your television. You can watch an entire season of a show in one sitting or pause an episode halfway through without missing a beat.
Another benefit is that streaming services are cost-effective. While cable subscriptions can end up costing hundreds per year, a basic subscription to Hulu, for example, is only $5.99 a month. Some streaming services, like Pluto TV, are even free. While you won't find brand new content on platforms like Pluto TV, it does offer more options for those who can't or don't want to pay for cable. And as streaming services get more specialized, you only pay for what you really want, instead of spending a lot on dozens of channels you never even look at.
Personalization Is Key
Today’s consumers expect finely tuned personalization in their entertainment experiences. The days of “watching whatever happens to be on” are quickly fading into the past. If a service is always recommending you shows you may like based on what you watched in the past, you'll never run out of things to watch and you'll keep coming back. And the algorithms that power these recommendations systems are getting better at learning what people want to watch. Every action you take on your streaming service is collected as data, and that data is used to teach these algorithms to give better recommendations.
The streaming services we use track our viewing habits to learn not only what we view, but how we view it. From the moment we press play, streaming services are tracking how many episodes we watch in a row, how long we watch in an average sitting, and which ads we respond to, in order to offer us programming and ads that are tailored to the things we like and our unique viewing habits.
Technology is at the forefront of the new wave of video apps and platforms, with incredible advancements in discovery and recommendation algorithms that take enjoying video content to an entirely new level. As viewers increasingly become co-creators with the expansion of user-generated content, the expectations for sophisticated personalization will continue to rise in the coming year.
The Streaming War Is Here – Let the Battle Begin
2019 saw the rise of a few new players in the streaming game. Disney+ and Apple TV+, with flagship shows The Mandalorian and The Morning Show, launched in late 2019, and 2020 is already proving to be a huge year for more contenders like HBO Max and Peacock (NBC's streaming service). With plans to launch in the spring, these two services are already generating a lot of buzz. But what can new streaming services do to set themselves apart from others? The competition for market share is fierce.
The big three, Hulu, Amazon Prime, and Netflix have dominated the original programming game for years, but this is a great way for streaming services to set themselves apart. A single successful original program can give a platform's subscriptions a huge boost. But at the same time, some of Netflix's most popular content is licensed. In fact, when it launches, HBO Max is taking away one of Netflix's most popular shows, Friends. Apple TV+ on the other hand, offers no licensed programming library and seems to be falling behind because of it.
The streaming war continues to be fought over who has the best original and licensed content. However, the war is not without its casualties. Right now, everyone is trying to get a piece of the pie. The market is becoming oversaturated, with a lot of the competitors offering similar content and pricing models.
But other streaming services thrive on specialization. Platforms like Acorn and BritBox specialize in British content, while Shudder offers content for horror aficionados. In fact, there are hundreds of specialized streaming services that each have their own fanbase. We can expect to see even more of these specialized streaming services as more people crave niche content.
5G Hits the Scene
The rollout of 5G means faster, more responsive streaming, and even more connected devices. 5G is predicted to offer greatly improved download data speeds when compared with 4G LTE. Just as 4G made a huge leap in our ability to stream content over a wireless network, 5G will make this streaming nearly equal to the speed of a fiber-optic connection.
While it won't happen overnight, the increased availability and reliability of 5G means faster streaming no matter where you are and what device you're using. This will also make it even easier to create quality content, which means we will see more and more user-generated content being broadcast live. And as more user-generated content is created, there will likely be new platforms to host this content, like Twitch.
AI Is Getting Smarter
Artificial intelligence (AI) has already transformed many aspects of the video business, and it is getting exponentially more capable as the months pass. I expect the impact of this technology to increase significantly in the coming year. From writing news stories to composing music and editing TV shows, utilizing AI to assist with content creation is snowballing throughout the industry. So, what does this mean for streaming services and their viewers? It's likely that we will see AI-generated video content on streaming services not too far from now. In a matter of years, it will be indistinguishable from content created by humans.
Further innovations in the automation of extracting metadata from video content with AI will lead to major enhancements in analytics, thereby advancing the capabilities for targeted advertising, video recommendations, and much more.
Writer: Max Kalmykov
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