Why Video Streaming will Explode in 2017

Why Video Streaming will Explode in 2017
Credit: Donald Tong

Cable TV is a medieval beast that refuses to die. Innocent consumers are often forced to sign up for subscription plans with what looks like a thousand TV channels for two or three “watchable” channels. As if that wasn’t enough, consumers must stay glued to their TV sets or miss the season finale of their favourite TV series. The big, cable TV networks keep winning, while the innocent 21st-century consumer keeps losing.

It’s a frustrating reality that most of us have to live with, one that the millions of cord-cutters and OTT content providers hope to change. Streaming offers the best and most cost-effective path out of the jungle that is cable TV.

Streaming services like Hulu and Netflix were valued at $5.1 billion in 2015, which represented a 29% growth rate from the previous year. This, compared to only 3% growth in the traditional cable TV sector over the same period, shows more people are ready to cut the cord.

Streaming brings all the pluses of cable TV but with the ability to choose what, where, and when to watch content. Cable will be a difficult monster to tame, but here is why 2017 will see streaming eat into cable’s market share even further.

1. Live Streaming

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Live streaming really broke out in 2016, thanks in part to the horrific police shootings in the US, the war against ISIS, the US presidential debate, and other events that were distributed via live broadcasts. Live streaming has transformed the way news and media are prepared and consumed and how we relate to events happening in real-time in different places around the world.

This trend is likely to continue in 2017 with the entry of Facebook Live and a number of other live streaming apps, including Periscope. These have made live streaming easier and accessible from mobile devices, factors that will contribute to the popularity of streaming going forward.

2. 4K Ultra HD Video

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The hardware that supports the eye-popping 4K UHD resolution has been around for over decade, but few content providers have been able to take advantage of this space. In fact, it was only in 2013 when the first cable content provider began providing content in 4K. Still, 4K uptake among cable providers has been slow since then, with streaming becoming the main source of 4K UHD content over the past few years.

Netflix was one of the early adopters of 4K video, with the second season of House of Cards being shot in 4K. And apart from Ultra HD Blu-ray players, DirecTV, and a few other non-streaming content providers, 4K UHD is bound to grow chiefly along the lines of streaming.

3. New Video Streaming Providers

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When video streaming first became popular, the only names people associated with this new form of entertainment were Hulu and Netflix. A report by the Convergence Consulting Group established that Netflix and Hulu jointly accounted for 98% of the total revenue share within the OTT space in 2015.

2016 has seen that number decline to 91%, thanks to new OTT service providers like Amazon Prime, PlayStation Vue, and NBC’s Seeso. The entry of additional providers will offer more variety and introduce competitive subscription fees among players in efforts to stay competitive.

Free, ad-based video streaming providers that offer consumers the ability to watch free movies and stream music will also continue to impact the industry, irrespective of their legal status.

4. New Markets for OTT Content

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The video streaming market in the US is almost hitting its saturation point, according to a study by Strategy Analytics. In 2016, American consumers spent $6.62 billion on video streaming subscriptions, an increase of $1.19 billion from the previous year. However, this was lower than the increase from 2014 to 2015, during which the market registered growth worth $1.21 billion.

To ensure growth, OTT services providers will be forced to cannibalize other service providers, promote multiple subscriptions, or look into other markets for growth. The latter represents the best chances for success, with the Asia-Pacific region already projected to generate $35 billion in video streaming revenue by 2021.

Better hardware and improved internet speeds from the spread of fiber will largely drive this foray into new markets.

Bottom Line

2017 promises to be a fun year for cord-cutters, cord-nevers, and anyone who’d rather catch up on their favorite TV episodes on their tablets away from home. With the US market nearing its saturation point, expect the major OTT service providers to draw blood as each tries to wrestle subscribers from the cable networks and amongst themselves.

This post is part of our contributor series. It is written and published independently of TNW.

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