Though long coming, the advent of streaming services especially popularized by Over-the-Top or OTT platforms are somewhat now considered as the future of the media and entertainment industry. According to the latest report by EY-FICCI Indian Media & Entertainment, digital streaming platforms have taken over film entertainment to ultimately rank the 3rd largest Indian media and entertainment sector in 2019-2020. With factors such as technology and availability, OTT platforms have grown to become a favored ecosystem. The millennial population in general with their increased dependency on internet services doesn’t favor a linear sequence of television watching, as it once practiced. The very important component of personalization has contributed to the impeccable success of OTT platforms.
A Short History
The media and entertainment industry with a special focus on video production is estimated to reach an approximate $2.14 trillion by 2020. Added with this is the unprecedented number of internet users (around 3.5 billion) with easy access to different forms of online media and entertainment. Based on a marketer report, the overall video content consumption points to 39%.
It is important to note that this was not always the case. In fact, the rise of online streaming services that came along with the exponential growth of internet usage was a major point of concern for traditional TV network service providers. The overall growth of traditional media services proves strategic to the online OTT platform industry in content generation, ad revenue production, and analytics.
Over the years, the introduction of the Smart TV was a big boost factor that tied together with traditional TV medium to internet facilities. This came in handy, especially considering how the younger generation preferred to consume content anywhere and anytime. However, for the OTT platforms to function smoothly, it needs to be coordinated with other domains of services like CP, CDN, and cloud service providers.
The Rising Popularity of OTT platforms
Some factors that constitute fueling the scope for OTT platform and online streaming services are,
Increase in overall video content in 2 years from 64% to 80%
Increased revenue in the video branch of the media and entertainment industry
Exponential growth in advertising in the video stream is on a rising trajectory
350 million internet users and 220 million smartphone users translate to an obvious scope for video content consumption
A Vuclip survey points to the fact that video consumption through smartphones has increased to 55%
Big social media players like Facebook report that their video ads revenue accounts for a total of 77% of the total advertisement revenue
Source: L.E.K. Consulting
The above survey by L.E.K Consulting points out to major factors that contribute to rising in popularity of OTT platforms and online streaming services.
Challenges in the Market
The market and industry for OTT platforms and online streaming services are in the prime of its growth, especially with work from home practices, and people generally spending more time in their homes. But, like every other industry and trend, there are challenges that OTT platforms face equally. Some of them can be:
Even with personalization and AI processes working to create unique experiences for all users, high-speed internet and connectivity that are really the pillars for OOT platforms to thrive are a point of serious concern. In fact, it has been the biggest challenge for the digital media industry.
With its heavy dependency on internet medium and its support systems, something that has been the primary point of discussion is piracy. This is very similar to movie producers and production houses finding ways and different channels to fight the same issue.
It is important to note that transitioning to a new system requires a lot of money. Digitization of the traditional systems incurs heavy expenses.
The system as a whole is highly sophisticated. There is no doubt in that since the entire process involves digitalization aspects. Finding ways to provide such highly sophisticated and expensive processes and tools at affordable costs accessible to everyone is a major challenge to tackle.
There is an alarming concern if whether the OTT platforms' online services are heading to saturated markets. This is something of real importance since even at the moment, there are so many apps and providers that are coming into the OTT platforms every few days or so.
It is very easy to predict that OTT platforms and online service providers are here to stay for long. It is on a steady increase every day. Even if you look around you, you’d realize that many of the home users at some point in time last time switched to using OTT platforms as one of the primary sources for video consumption. It is safe to say that has been the case everywhere. This makes us come to the conclusion that the evolution of OTT platforms and online video services will primarily work based on exactly what users want:
ease of use and choice
personalization of user experience
As long as these two factors are constantly met, OTT platforms will thrive and ultimately be of relevance in the years to come.
About the Author:
Nandha Palani Dorai is a content writer and co-founding editor of Bluegraph Press, the literary print magazine & online portal for readers and writers from Indian and South Asia. She helps in elevating brand presence through her content, copy & brand identity design.