DALLAS—As many streaming services and video distribution companies struggle to expand their reach and develop profitable offerings, a new white paper from Parks Associates and JW Player (JWP) highlights the increased complexity of a video landscape and the ongoing decline of traditional TV.
The survey found that 67% of consumers watch social video and 50% watch free ad-supported video. But only one-third watch pay TV, and 14% use an antenna to watch over-the-air broadcast.
In addition, 65% of U.S. internet households report watching video on a mobile phone, a significant increase from ten years ago, when just 30% regularly watched video on a mobile phone.
The research, “Video Delivery: Maximizing Efficiency and Monetization”, addresses the challenges of managing content delivery, user engagement, and content monetization with a fragmented tech stack. In addition, the research addresses how operations can be streamlined for cost reduction, mitigation of operational breakdowns, and faster output of content in a variety of formats to diverse platforms.
"The video streaming business is in a transformative stage," said James Burt, senior vice president of broadcast solutions for JWP (JW Player). "It's full of requirements that change to align with shifts in viewer consumption trends. Streaming management is also technically complex, with broadcasters struggling to balance operational efficiencies with innovation and growth. Yet there are more viewers using digital platforms to consume content than ever before. Streaming companies must review their technology, operations, and productivity and make adjustments to create economies of scale and improve ROI."
These efficiencies are critical given the fragmented market and new mobility around video viewing -- televisions, smartphones, tablets, laptops, exercise equipment, and smart displays are all options today for video consumption, creating a more complex environment for streaming providers to operate, the researchers reported.
"In the early days of streaming, services were focused on building subscriber bases through low fees, ad-free programming, and high-quality original content," said Sarah Lee, research analyst, Parks Associates. "Now, to fully monetize these efforts, they need to deliver a consistent, high-quality viewing experience that goes across all platforms."
The streaming industry has transitioned to more advertising-based models, to bring in additional revenue alongside subscriptions. Parks Associates' consumer research finds 50% of people who consume video on a viewing device (TV, computer, tablet, or phone) watch a free, ad-supported service (FAST) or ad-based video on-demand service (AVOD) at least once a week. The ads are an equally important part of the experience, as consumers expect ads to be relevant, original, and appropriate to the viewing platform.
"To preserve competitiveness and optimize operations, advertisers and content providers must acknowledge the necessity of investing in modern strategies and technologies that allow for proactive rather than reactive pivots," Lee said.
