OTT trends – chances and strategies for 2024
The global revenue in the OTT video market is expected to hit approximately US$325.40 billion by the year 2024. By 2032, experts predict a substantial jump to a high of $419.90 billion, reflecting a speedy growth rate of 6.58%. This data tells us that streaming services are not just popular now but will keep growing vastly in the future. More and more people want to watch content through streaming, making it a crucial part of the media world.
The OTT video market and the media industry have been rising for years. Yet, challenges like data network capacity shortages and latency issues require new solutions to sustain market share and captivate potential users.
Consider this article as a practical guide for success, not just a collection of information. Use the knowledge to make informed decisions, and stay ahead of industry changes.
Trends to watch in 2024 in the OTT industry
The rise of Live Sports and short-form video impact
Live sports are thriving by delivering short videos, boosting engagement by 21% in the US since late 2020.
Media & Entertainment industry needs to adopt short-form videos to attract new fans. In the world of viewers spending nearly 7 hours online daily, short sports videos are gaining popularity. Why?
Users can concentrate only for 47 seconds to consume digital content. When viewers come across interesting videos, they are rewarded by the dopamine release. The urge to reward by amusing, shocking, or exclusive content keeps them captivated. That’s why short-form content is so important to include in your content strategy for 2024. You can deliver compelling videos and still struggle with low viewership and engagement metrics.
SL Benfica is a Portuguese football club that successfully used knowledge about users’ behavior and short attention spans. They wanted a Video-on-Demand service. The primary goal was to offer fans exclusive and previously unreleased content. A few weeks later, such a platform was created. Interviews and behind-the-scenes footage from matches and training sessions turned out to be a real hit, improving user engagement.
Social media are becoming the go-to for watching sports, saving time, and breaking barriers. That is why implementing social media content features (like highlights, stories, movie trailers, and bloopers) to your platform is the key to success in 2024.
Content owners should jump on the short-form video trend on OTT platforms. Look at the success of Ultimate Pool Group with 1.1 billion views in 2022, showing the importance of constant improvement for user-friendly streaming experiences. These days those numbers will only rise.
Interest in AI grows, so do the concerns
Interest in Artificial Intelligence (AI) has a 36% year-on-year increase. However, concerns about AI have doubled during this time. While content creators are interested in AI capabilities, only 29% of them would use AI suggestions.
Creativity – that is what worries audiences the most in the context of AI in the video industry. Viewers are afraid of generic content on the screen.
On the other hand, AI’s ability to personalize content, deliver targeted offerings, and enhance the overall user experience is highlighted. The utilization of AI and Machine Learning (ML) for personalization increases customer satisfaction and loyalty, providing users with attractive, tailored content suggestions.
Are your (grand)parents on Netflix already?
In the last decade, we’ve seen the digitization of baby boomers. Daily mobile time has increased 2.8x since 2013, while time on social has increased +68%. Businesses can now confidently evolve their marketing strategy toward older target audiences too.
That’s the quote from Andy Childs, the Head of strategy in Meta. According to recent data from GWI, Baby Boomers are not only becoming more comfortable online but are also actively engaging in digital activities. The COVID-19 pandemic has forced them to enter the Internet. And they stay there, learning to use it daily.
Why are Silvers so attractive for the OTT industry? They possess two most important resources: time and budget. In this case, they surpass even the tech-savvy Gen Z.
The digitization of Baby Boomers is evident, with an expected 57% increase in their presence on platforms like TikTok. As the Silver generation progresses in their digitization journey, they are expected to become OTT video viewers and join platforms, driven by the convenience and user-friendly features tailored to their preferences.
Video monetization trends in OTT
As we step into 2024, the OTT Video Advertising market segment is expected to hit $176.60 billion. The SVOD(Subscription Video On Demand) is not the most desired form of monetization. It faces historic churn levels due to consumer fatigue and tightening belts. Inflation, is that you?
These challenges have propelled the rise of AVOD (Advertising Video On Demand) /FAST (Free Ad-Supported Streaming TV) and hybrid models, enticing users with free or cost-effective services.
Importantly, these revenue models bring benefits for small or niche platforms. Surviving with a subscription model and a narrow audience is not easy, and AVOD opens up new opportunities for sustainability and success.
It is worth mentioning that 71% of viewers with connected TV (CTV) are unsatisfied with their ad experience. No wonder that only 22% of people who use CTVs say they might use interactive ads to buy something. What are the reasons you ask?
- The ads may not be relevant.
- The ads might not appear at the best time to be memorable.
- The buying process may distract from the viewing experience.
- Users tend to lose interest during ad breaks.
CTV advertising in 2024 must face those challenges. How to improve ad relevancy and distribution? Research shows that consumers pay 4 times more attention to ads that are relevant to the content they are watching. For instance, cooking programs could seamlessly integrate with grocery delivery apps, enabling viewers to buy ingredients directly off their screens.
Offering advanced targeting and personalization is a key to success here. A study (mentioned above) on CTV advertising impact found that AI-driven contextual targeting outperforms standard methods. Viewers paid more attention, learned about products, and stayed engaged with the ad event if the product wasn’t their first need item.
Traditional TV network viewing falls into oblivion
Only 36% of people who prefer internet-connected devices watch traditional channels like ABC, BBC, and NBC daily or near-daily. In contrast, 26% mentioned they hardly ever or never watch traditional channels. Conversely, 44% of those who like linear TV watch traditional networks daily.
This coincides with the ongoing trend of decreasing viewership for network TV and public television. Notably, major network TV companies have shifted towards a stream-first strategy, as seen in platforms like Peacock and Paramount Plus.
Even though the numbers for traditional network TV are dropping, these networks have adjusted to the rise of streaming by offering a wide range of content beyond just original shows. It’s important to highlight that by next year, these streaming bundles are anticipated to make up around 50% of online viewing minutes.
Telecom operators bundling in OTT
How many people do you know who prefer traditional TV over modern on-demand options? Exactly. That’s why telecom companies choose to bundle their offerings with OTT platforms. This strategy not only attracts new customers but also keeps them loyal.
You might have heard the quote of Jim Barksdale, the former CEO of Netscape. He claims that there are “only two ways to make money in business: one is to bundle; the other is unbundle.”
Including OTT subscriptions such as Netflix, HBO Max, or Disney+ in bundles, along with music streaming services like Spotify, has proven to be a clever move. It prevents this business model from facing a fate similar to old video rental stores. For instance, AT&T customers can access plans that include streaming HBO Max. T-Mobile’s Simple Choice customers can enjoy Netflix, Amazon Prime, and Hulu, and Verizon customers can get Disney+, Hulu, and ESPN+. When you work in an industry with forecasted growth of just 1.7% CAGR, you have to expand the core services.
OTT Trends going forward: a market still maturing
While the OTT market has experienced remarkable growth, it is still developing. Free streaming services with ads (AVOD) are having trouble with targeting and privacy issues, and paid subscriptions (SVOD) might be reaching a point where people do not want to pay more monthly. Addressing those issues will be an important part of the monetization strategy for 2024.
However, what remains certain is the ongoing intense competition for market share among major players, with new and specialized entrants consistently entering the scene.
Looking ahead to 2024, key trends emerge, emphasizing the importance of short-form content, especially in live sports, and recognizing the growing influence of the Silver generation. Artificial Intelligence (AI) has gained more interest, although concerns about generic content persist.
The rise of the global streaming services market suggests a growing appetite for online content consumption. It presents an opportunity for OTT platform owners to tap into a booming market and expand their user base.
However, with the growth of streaming services, competition is intensifying. OTT platform owners should differentiate their offerings, provide unique and compelling content, and enhance user experience to stand out in a crowded market. It is the area where AI can help. How? Through better personalization and increased accessibility. Advanced content recommendation algorithms, metadata enhancement, and automated closed captioning are just the beginning.