Five predictions and trends the digital media industry

New trends in the media industry

The last decade has been nothing but a torrid blend of market disruption and media rebirth. Our core understanding and consumption of media and its management have resulted in near-digitization of the entire media industry. As 2020 unfolds, a new era of opportunities and trends seem to be taking over. Here’s a quick roundup of the key emerging trends in the digital media industry:

1. Streaming platforms are gearing up for some serious battle in 2020

Subscription video on demand (SVOD) is becoming increasingly congested, with Amazon Prime Video, Netflix, and Hulu set to compete against new Goliaths Disney+, Apple TV+, HBO Max, and NBC Peacock amongst dozens of others in 2020.

Currently, 44% of consumers who pay for an online streaming service have at least two subscriptions, 18% pay for three, and 7% pay for four or more. This clearly indicates that market penetration will be difficult for new subscription-based streaming services. Not to mention, it will also be challenging for the current leaders to maintain or crank up their existing market share.

With competition intensifying with every additional player, the market will soon be mature enough for M&A talks and partnerships with fellow digital media companies seeking to expand into new markets in 2020. Similar strategic moves have already transpired last year that include Verizon’s purchase of Yahoo, T-Mobile and Netflix’s streaming partnership, and Amazon’s Prime Video featuring content from HBO, Cinemax, and Showtime.

A prime example of this trend is Disney’s bid to acquire the Fox and the T Mobile-Sprint merger. Brand recognition and marketing with a focus on service integration and commercial agreement forms the core of this trend. Regional over the top or OTT video players are ushering a new change by entering tactical tie-ups with mobile service providers (MNOs).

Another new trend in the digital media industry that will become a key move to increase revenue will be the launch of lite pay-TV services that offer linear channels at prices lower than those of traditional players. Hulu, an entirely online video service, launched its live-TV streaming services with more than 40 channels, including major networks CBS, Fox, ABC, and NBC as well as select sports and entertainment channels such as ESPN, Food Network, and Cartoon Network. 

The quality and frequency of releasing original localized content will play an important role in winning this battle. Netflix, Amazon, HBO, and Hotstar have already made some serious move in 2019, and this year it is expected to be even better with more content being produced at an accelerated pace. With statistics stating that Netflix is spending USD 15 billion on original content and Amazon touching USD 6 billion, original content will be a rising trend moving forth.

2. The OTT Model is changing the value chain of content creation and distribution

OTT platforms are gracing various segments of media, disrupting not only how content is distributed, but also how it is created and by whom. With daily household consumption of OTT video touching 50 million, and that too during the same time pattern as that of traditional TV viewing, OTT dictates a new trend in the digital media industry. The technological progress of high-speed mobile broadband connectivity in developing countries is a major factor triggering this transformation.

Based on the current rampant viewing habits and the vast ocean of untapped video segments, a big growth opportunity exists in live and linear OTT services which have to be an integral part of the next generation of OTT video. Pay-TV providers are in the best position to develop and deploy live streaming services that exploit content that is best experienced in real-time, such as news, weather, talk shows, and sports. But this could change as content owners begin to develop their own platforms and partnerships. 

The global sports industry is touted to be worth USD 480 to USD 620 billion with a perpetually upward graph. Moreover, in an effort to maximize revenue and optimize their reach, leading sports firms will establish their personalized OTT business with various famous online video providers.

OTT is ultimately allowing companies to emulate the traditional content bundling as seen on traditional cable television and break the norm of unbundled media delivered by the streaming services of today. Eventually, more consumers are expected to depart from traditional television viewing and migrate to internet-based consumption. 

3. Free ad-supported video on demand (AVOD) is expected to rise from the shadow of its subscription-based counterparts

Free ad-supported video on demand (AVOD) is ostensibly the next big opportunity in long-form video, especially since SVOD services are nearing their saturation point with 800-plus digital media companies in the market globally. Comparatively, the AVOD landscape is still emerging across the world.

There is clear evidence suggesting that consumers are willing to tolerate ads based on the fact that the most commonly searched term on Roku is “Free”, nearly half of Hulu’s 20 million subscribers take the limited-ads version, and Tubi TV — the largest free ad-supported streaming network — has 20+ million installs.  The rise of AVOD will be further spurred by the parallel development of advanced digital advertising technologies.

While these mechanics have been in the making, they are still in their beta-testing phase and are being deployed precariously into the market. The prime focus of this would be to produce original as well as diverse content being marketed with futuristic adtech and data strategies. Hulu, for example, is innovating with targeted digital advertising that rewards viewers for binge-watching its programs.

AVOD has the capability to function as an integral part of a pre-established digital media company to market products over multiple platforms. It can do this while utilizing the pre-existing SVOD services; this is what makes it a lucrative futuristic venture.

4. Esports is expected to gain more mainstream prominence in 2020

Touted to be worth USD 138 billion in 2018, Esports gaming has exploded into the mainstream in recent years, transforming from a vibrant niche to a central form of entertainment around the world. While Esports may have once stood for a subset of sports culture, it has grown into a full-blown industry in its own right.

With a global audience and viewership of Esports crossing that of American football and touching 443 million in 2019, the growth trajectory is expected to surpass Formula 1 and UEFA Champion’s League by 2022. The involvement of mainstream sports personalities and celebrities such as Michael Jordan, Shaquille O’Neal, and Will Smith resulted in increased coverage by ESPN, ABC, and Disney XD. Rightfully credited, at least in part, is the breakneck rise of Fortnite and PUBG among various other online multiplayer cross-platform games that brought forth a new digital transformation in media and entertainment.

Gaming-specific streaming platforms like Twitch and YouTube Gaming has given fans a direct connection to the players and teams, while more mainstream socials have allowed those connections to flourish. Certain Esports organizations, like FaZe Clan, are also moving aggressively into areas like merchandising, thereby broadening their reach beyond the virtual medium alone.

5. Live streaming on e-commerce websites and social media platforms is proving to be a very effective marketing channel for both, small and mid-level companies, and e-commerce giants

E-commerce companies have started leveraging live streaming opportunities to showcase their products and services on their websites thereby improving customers’ online shopping experience and bringing them closer to the brands. In a similar vein, more and more educational institutions are live streaming lessons for students and healthcare medical practitioners are providing training sessions and care for patients in real-time. 

Live streaming on social media began as a non-interactive process but the current trend dictates how the most notable of live streaming trends rests on how social media platforms like Facebook, Periscope, and Instagram have established two-way traffic between the producers and the consumers.

In 2020, these small and medium-sized businesses will likely continue to conduct this new trend in the media industry by hosting live events to showcase their products, do giveaways, coin reviews, amongst others, thereby improving the end-user experience. Change in the digital media landscape is expected to accelerate at an unrelenting pace with new technologies, platforms and business models. Taken as a whole, these five trends will impact the media ecosystem’s participants in multiple ways.

Where some see maturing markets, others see fresh opportunities to evolve their businesses to a new industry standard, both in product and service delivery. Digital media providers are in a hurry to exploit the best opportunities, and agile ecosystem partners will definitely be joining them in this pursuit of success. Netscribes offers digital media players the advantage they need to excel in this competitive environment with relevant and accurate data and insights to drive strategic business decisions. For more information contact info@netscribes.com

Contact Us
X
  • I agree to receive updates on the latest industry trends, products and services from Netscribes.
  • We respect your right to data privacy and security. You may unsubscribe from our communications at any time. For more information, check out our Privacy Policy.