Tectonic Shifts and the Future Landscape of the Video Streaming Market in 2024

Streaming video services have become the primary form of entertainment in many households, attracting more viewers than cable or broadcast TV. According to Nielsen, streaming continued to captivate audiences in 2023, with viewership surging by 21% compared to the previous year.

This marks another consecutive year of growth, following a 24.6% upsurge in streaming viewership observed in 2022 over 2021. To put this trend into perspective, American viewers collectively dedicated 21 million years of precious time to streaming content throughout 2023.

Let’s dive further into the future of technology and video streaming industry trends and see what market players need to be ready for to adapt to change.

Competition for the Market Share

How do streaming services compete in the battle for subscribers? Until now, the content was the only king. However, several factors have transformed the video streaming market, including the end of COVID-19 isolation and decreased subscriptions as people are now looking for ways to cut costs amid steeply climbing inflation. As big players like Netflix, HBO Max, and Disney+ can no longer rely purely on their content, they need to explore new strategies that will help them increase their profits and secure the bottom line.

Streaming media has seen rapid growth and evolution over the past few years, with ad-supported models gaining traction — indicated by the success of Netflix’s “Basic With Ads” tier, which now counts 15 million monthly active viewers just one year after launch. Still, there appears to be a limit to how much consumers are willing to pay in total subscription costs. As major players like Netflix, Hulu, and Amazon look to branch out revenue streams, one area offering significant untapped potential is user engagement.

Heading into 2024, new engagement-focused offerings that move beyond ads to unlock new revenue opportunities will be crucial in expanding free, ad-supported TV (FAST) channels. Players in the media and entertainment industry stand to benefit tremendously if they introduce creative features and successfully gain viewers’ active involvement in content. There are a few ways engagement capabilities can be integrated into existing content to expand revenue streams, the most obvious of which is content gamification.

Adding gamified elements into programming incentivizes viewers to watch for longer and even motivates them to make purchases. These microtransactions linked to interactive games, trivia, and polls that precede or overlay popular shows can add up quickly across a large subscriber base.

The Rise of AI in the Media Industry

In the endlessly evolving media industry, the rise of Artificial Intelligence (AI) is reputable for bringing transformative changes. As we look ahead to the coming year, AI is bound to remain a central focus for media businesses, promising enhanced operational efficiencies through automation. One of the most exciting prospects is the integration of AI into broadcast workflows, offering insights into the seamless amalgamation of complex technologies and ecosystems. This newfound synergy enables media companies to unlock unprecedented levels of efficiency while simplifying processes that were once deemed overwhelming.

This efficacy of AI hinges on the availability of high-quality data. Streaming operators leveraging vast datasets derived from the behaviors of millions of global subscribers create a competitive edge. With the power of AI-generated metadata and language models, these operators can improve the user experience and streamline content discovery.

Advanced algorithms powered by AI allow the creation of highly personalized user experiences on streaming services. By analyzing viewer data, streaming platforms can precisely tailor advertising strategies, maximizing their effectiveness and revenue potential.

Hyperpersonalization

The era of hyperpersonalization within OTT platforms entirely evolves how content is delivered and consumed. This transformative approach is all about putting the viewer at the center stage, making tailored viewing experiences that cater to individual preferences like never before.

By harnessing advanced user data, behavior analysis, and AI algorithms, OTT platforms are delving deep into understanding their audience on a granular level. This enables them to not only curate personalized content recommendations but also customize the entire user experience, from interface design to content delivery.

Here are some key elements that hyperpersonalization encompasses:

• Personalized recommendations that use sophisticated algorithms and analyze viewing history and preferences to offer tailored content suggestions, ensuring viewers discover new titles aligned with their interests.
• Adaptable interfaces that can be customized based on individual preferences, allowing layout adjustments, color schemes, and themes to enhance user comfort and engagement.
• Dynamic content that allows experimentation with interactive or branched content, and hence enables platforms to offer unique and personalized experiences that adapt based on viewer decisions during playback.
• Personalized advertising that leverages behavioral data and enables platforms to serve more relevant ads, enhancing advertising effectiveness while minimizing interruptions for users.

More Accessible and Engaging Live Sports

In 2023, streaming got all the headlines, with streamers spending more than $6bn on primary sports rights in the largest global markets. Both sports organizations and streaming providers benefitted from this symbiosis.

As for 2024, live sports broadcasting continues to drive the expansion of streaming platforms, with industry giants like Apple, Amazon, and SKY investing unprecedented sums in securing broadcasting rights. This surge in demand has opened doors for second-tier or niche sports as platforms seek to diversify their content offerings at a more affordable price point.

Using cloud-based remote production, automated camera technologies, and cutting-edge ingest protocols, niche sports can now be produced with high-quality standards at a fraction of traditional costs. These advancements have enabled the effective monetization of niche sports by creating FAST channels. These channels blend live events seamlessly with exclusive behind-the-scenes content, catering to the passionate fanbase of these sports.

Additionally, real-time streaming innovations have fostered a more interactive viewing experience for sports enthusiasts. Many sports streaming apps embrace creativity in fan engagement, offering opportunities for real-time interaction, supplemental media content, and more.

Convergence of TV Streaming + e-Commerce

Businesses continue to pursue new ways to attract consumers online, especially when it comes to e-commerce. By combining live streaming with online shopping, companies create the in-person experience and keep customers interactively engaged with the brands. TikTok, YouTube, and Amazon claim that the future of retail is live e-commerce.

TikTok Shop, launched in the US in September, has revolutionized the landscape by allowing brands and creators to directly engage with viewers through videos or livestreams, facilitating seamless transactions within the app. Though US adoption may never reach the levels seen in China, where we forecast 40.2% of internet users will make at least one livestream purchase in 2024, there is still potential for livestream commerce to take off stateside. According to Coresight Research, US livestreaming commerce sales surged to $50 billion in 2023, with projections indicating that it could account for over 5% of total e-commerce by 2026, as reported by CNBC.

Among other platforms leading the thriving trend of the convergence of livestreaming and e-commerce are Amazon Live and TalkShopLive. Amazon Live hosts daily livestreams across diverse categories, while TalkShopLive empowers brands and retailers like Walmart and Best Buy to broadcast live and facilitate sales seamlessly.

Final Thoughts

From the rise of AI-driven personalization to the convergence of TV streaming and e-commerce, the video industry is witnessing tectonic shifts reshaping how content is created, distributed, and consumed. To keep up with the change, the market players must remain agile and proactive in embracing emerging trends to thrive in this dynamic ecosystem. As we look to the future, the only certainty is change, and those who can navigate it effectively will emerge as the true pioneers of the streaming era.

If you are looking for assistance in pivoting or expanding your video streaming capabilities to stay ahead of the competition, learn more about how DataArt Media & Entertainment experts can help you.

Author: Max Kalmykov
Vice President of Media and Entertainment Practice at DataArt

Originally published on https://www.dataart.com/blog.