OTT market in 2020: trends, growth levers...


Over the past five years, all areas of home entertainment spending have declined. Nevertheless, online video is a segment of the industry that is exploding!

Video streaming increased by 72.4% between the first quarter of 2018 and the first quarter of 2019. Moreover, the deployment of broadband internet far exceeds the growth rate of television.

Pay-TV and traditional video are now on the hot seat. Service providers are therefore exploring new and innovative ideas to remain relevant in 2020 and beyond.

The rise of online video services

According to estimates based on the barometer of the CNC (Centre national du cinéma et de l’image animée, in english: National Center for Cinema and Animated Image), digital video sales would be 933 million euros at the end of 2019 :

  • 720 million euros for SVOD (subscription)

  • 103 million euros for VOD (unit purchase)

  • 110 million euros for rental VOD

SVOD is therefore the preferred video entertainment of French people. The growth of the video streaming market has been one of the most talked about topics, especially with the arrival of new platforms that have been eagerly awaited and that have been launched at the end of the year:

  • Apple TV+ was the first to make the big leap into the market, offering its service from November 1, 2019. It offers a commercial-free streaming experience with exclusive new movies and shows.

  • Disney+, launched in the United States on November 12, 2019, the platform has already attracted more than 28.6 million subscribers. Disney+'s highly competitive offer, its catalogue and its exclusives make it a tough competitor for Netflix and Amazon Prime.

In addition to these video entertainment giants, smaller niche streaming platforms such as library based Kanopy and anime focused Crunchyroll TV have also gained ground.

Also read: The SVOD market: leader VS challenger... who will stand out?

What does the year 2020 hold in store for us?

2020 seems to be the year of OTT and promises to extend all the innovations of 2019!

The streaming war: newcomers make their entrance

A number of new services from the United States and Europe will emerge in the New Year. Following the launches of Apple TV+ and Disney+, it is now the turn of HBO Max (NBCUniversal) and Peacock (Warner Media) to launch their own SVOD platforms to compete with Netflix and Amazon Prime Video. Not to mention niche offerings such as Quibi, Twitch, BritBox and DAZN, offering more streaming options than ever before.

  • HBO Max wants to stand out from the crowd with a high-end catalogue. The platform will become the home of series such as Game of Thrones, Friends, The Big Bang Theory, Harry Potter movies and DC Comics superhero movies such as Batman, Superman and Wonder Woman, as well as classic films such as Casablanca.  Coming May 2020.

  • Peacock, is a free VOD service. It will be financed solely by advertising and will provide access to more than 7,500 hours of programming from Universal series and films. Its release date has not yet been announced.

  • Quibi, is a paid streaming service focused on millenials, which will be launched on smartphones on April 6 in the United States. Its special feature: the service will be available only on smartphones, with content exploiting both portrait and landscape orientation.

  • Twitch, is the world's first live streaming platform for gamers.

  • Britbox, the UK's largest TV streaming collection.

  • DAZN, is a sports SVOD service that broadcasts live and on-demand events from a variety of properties.

Also read: Niche SVOD: a promising future!

New monetization models?

Subscription weariness drives innovation in OTT monetization. Indeed, according to some estimates, more than a third of professional broadcasters monetize their content through subscription models. But many viewers are tired of subscribing to multiple services.

Streaming services will therefore have to integrate new hybrid monetization models into their business plans.  OTT providers are beginning to experiment more and more with pay-per-view monetization, i.e. monetization on a per-view basis or in the form of advertisements as an alternative to subscriptions. There is a willingness on the part of subscribers to pay for premium content.

Also read: Online video service and monetization: which alternatives?

The rise of 5G and Wi-Fi 6

The new streaming services will be powered by faster and better Internet connections thanks to the large-scale deployment of 5G and Wi-Fi 6.

Indeed, 5G Internet will start to become a standard, especially in urban areas. This next-generation cellular network technology will provide much faster and more reliable Internet speeds.

Wi-Fi 6, on the other hand, offers higher gigabit per second speeds and a wider range for faster connections. OTT businesses that benefit from the power of new wireless technology can offer a superior streaming experience and attract more subscribers.

Immersive broadcasting: new progress?

The rise of 5G will enable better quality streaming video by making 4K streaming solutions possible. The real benefits of immersive streaming will come from the improved color space.

4K streaming and VR (virtual reality) are expected to be the hot features for the next two years. Thanks to the new network connections, 360 live streaming will also become possible.

Mobile: new favourite channel?

Mobile has now become a high-potential market. Television remains the preferred medium for video broadcasting, however the growth of the mobile device is increasingly important.

And the new Quibi streamer has understood this, by imposing itself in the world of video on smartphones. It's not a revolutionary concept, but it's a market with great potential when you consider that in 2019, American adults used their phones more than they watched TV.

Meg Whitman and Jeffrey Katzenberg, respectively CEO and founder of Quibi, are banking on the fact that mobile users are willing to spend on additional content if it is of high quality and more interactive than what they are used to.

As a result, partnerships between streaming services and mobile networks continue to multiply. This growth is also due to mobile networks expanding into broadband and LTE services.

Customer support: a new way to use streaming video

The most promising use of streaming video is customer support. Organizations are now using this service to help customers resolve product and service issues.

The interactive nature of this technology contributes to the customer experience, which is now considered as an essential part of customer service. Here are the most common types of videos created by companies:

There is no doubt that 2020 will be a landmark year for the streaming landscape. The OTT industry will finally reach a stage of maturity.

We are witnessing the rise of fascinating new technologies that have the potential to make a difference. This is also thanks to platforms like Disney+ and Apple TV+, and to the arrival of new technologies like 5G for example.

In addition, the OTT industry is brimming with opportunities for both content creators and technology providers. Nevertheless, new business models and investments in expensive technologies such as UX offer high risk and reward.

…And beyond

According to the "Global Entertainment and Media Outlook 2019-2023" global study, OTT video revenues are expected to grow 15.2% in five years, or 973 million between 2018 and 2023. With major players in the SVOD sector (Apple, Disney, Netflix, etc.), subscriptions to these services should account for nearly 80.5% of the OTT market in 2023.

Based on these forecasts, it will therefore be interesting to observe how this market evolves.

If you want to know more about the video industry, OTT trends...Don't hesitate to contact our experts.