Experiences
Future Trends and Insights in Video Streaming
Reports about ‘Streaming Media West 2016’ from Huntington Beach, Los Angeles – November 1-2, 2016

Listening to the great speakers at ‘Streaming Media West’ I realised something profound: We are witnessing first-hand the evolution of the traditional entertainment formats – like television and movies – as they are irrevocably transformed by the emergence of streaming video. It was a surreal feeling being surrounded by entertainment companies and startups, just a few miles from Hollywood, as we discussed the revolution of the entertainment industry!


Short on time? Read the key points below:

  • Video streaming will dominate internet traffic,
  • TV stays as the most important surface,
  • Advertisement based streaming will be leading business model,
  • Streaming quality and community are the driving forces behind streaming,
  • VR is the new 3D.


Business expansion

The attendees agreed that while video streaming offers a whole new experience, it is mostly taking viewers from traditional entertainment formats. It is estimated that by 2020 82% of all internet traffic will be from video streaming.

Video surface

Steve Shannon from Roku shared some interesting insights in his keynote speech. Roku experiences a continued growth in users who utilize their television as the primary surface for consuming video content. In the 3rd quarter of 2015 16% used PCs, only 17% mobile and an astonishing 67% their OTT (“Over The Top”) television solution. Considering that 60% of the overall TV sales in the US are Smart TV’s, we don’t need special skills to predict that the television as a surface will keep dominating the streaming market. Another speaker from Google stated that people watch 80 times more video on TV than on mobile and most of the mobile video traffic is coming from YouTube users.

Business models

Shannon from Roku divided the different monetizing models as follow:

  • TVOD – rental (e.g. Amazon, Google Play)
  • SVOD – subscription (e.g. Netflix, HBO Now)
  • AVOD – advertisements (e.g. ABC, RedBull TV)
  • TV Everywhere – free (e.g. NBC Sports, MTV)

According to Shannon, SVOD shows significant growth these days due to big companies entering the market. That said, on the long run, he sees either a combination of SVOD and AVOD, or AVOD alone dominating the scene. AVOD based business models do not require users to pay for the content, instead it is sponsored by advertisers.

Challenges in streaming

Representatives of major streaming companies reported a surprisingly high number of complaints regarding the quality of their service. Providing smooth and uninterrupted video appears to be one of their biggest challenges. Experts agreed that improving streaming quality would result in a significant revenue increase.

Richard Au from Amazon explained how building communities around their streaming content is crucial for providers. It increases user loyalty and helps companies acquire additional users from social media platforms – the way Twitch did.


VR

Most experts compared VR to 3D and predicted the same future for this new trend in technology. On a panel about challenges in Virtual Reality the attendees predicted a maximum of 1 billion USD revenue from VR by 2020 – which is only about 2% of the total revenues from content production. Revenues may take off after 2020.

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