The Future of Video Streaming : 7 Predictions
By now, you’re likely in one of two camps when it comes to video streaming.
You’re either like, “Yeah, I can’t live without [insert video streaming service here],” or, “Wait, you mean, like YouTube?”
The truth is, video streaming services like Netflix and Hulu have made major inroads since they first started a few years ago. If you’ve been with Netflix since they were strictly for renting DVDs via snail mail, it can seem like video streaming has been around for an eternity. But the reality is, even with the prominence of video streaming in the U.S., Asia, and other parts of the developed world, it’s still a relatively new thing and it’s just starting to warm up.
If new research and expert opinions are any indication, video streaming is about to explode in a mostly good way. To get you ready for the future of video streaming, here are 7 video streaming predictions based on the newest data on this burgeoning industry:
1. More video streaming services
Do the current dozen or more video streaming services out there already have your head spinning? Well, I wish I could tell you that your options are going to be trimmed down, but the opposite is much more likely, if the tea leaves are to be believed.
According to a 2015 survey by eMarketers, 4.9 million U.S. households parted ways with cable in 2015 alone. This same survey predicted that, by the end of this year, fewer than 100 million households would remain on cable or satellite subscriptions.
One of the big draws away from cable has been the ability for customers of video streaming services to pick only what they want. Definitely an improvement over the “pay-for-400-channels-but-use-only-five” model that comes with cable. But the cable companies and TV networks aren’t about to go down without a fight.
What does the old adage say? “If you can’t beat them, join them.”
Some of the biggest cable companies and networks are taking this wisdom to heart and launching video streaming apps of their own.
For example, Dish read the writing on the wall and invested in SlingTV, which streams a sizable selection of cable channels live.
HBO has launched its own streaming app, HBO Now, which allows subscribers to stream Game of Thrones and other popular content for $15 a month.
Showtime has released a similar app, but for $11 per month.
CW, ABC, ESPN, and CBS have launched free streaming apps with limited programming.
These apps have been a success so far, with one survey finding that, as of the middle of 2016, 30% U.S. adults have TV network apps downloaded onto their mobile devices. Which means that more networks and other media companies are all the more likely to jump into the fray. Which means you’re going to have more options to choose from than ever before. Sometimes knowing the future can be more of a curse than a blessing.
2. More original content
Earlier this month, Netflix announced that they’d had an expectations-shattering quarter. Their analysis: people love Netflix’s original content — Stranger Things and Narcos, in particular. They’re so sure, they’ve committed to add another 1,000 hours of original programming to their existing library.
A few years ago, when Netflix announced that they would be investing in their own original shows and movies (as opposed to just purchasing existing shows from networks and studios), people balked at the idea, claiming they wouldn’t be able to make back their investment. Now, with Netflix and their original shows dominating video streaming, those critics are singing a different tune.
When it comes down to it, video streaming services can only differentiate themselves by the programming they offer — and that means either making exclusive deals with networks or studios or producing their own exclusive movies and shows.
So expect other video streaming companies to invest more vigorously in making more of their own original programming. Which means more Daredevil-, Stranger Things-, and Man in the High Castle-quality shows for me and you. Yes, please.
3. Video streaming services will get more personalized
As mentioned earlier, Netflix is leading the video streaming market comfortably with a majority market share of 54%, according to a new survey by Digitalsmiths:
But this lead isn’t just because of their original programming. Netflix has also led the charge in providing a more personalized viewing experience — including individual user profiles, preference-reading algorithms, and a decent recommendation engine. And customers have taken notice:
As with original content, you can expect that Hulu, Amazon Prime, and other streaming services will race to improve their personalization capabilities. And you will be able to find shows and movies that fit your preferences easier than ever before.
4. Their prices will not equal cable’s
After all the setup fees, monthly bills, and contracts, cable costs got downright ridiculous. It’s no wonder that they’ve begun to fall so easily before the lower costs and better convenience of video streaming services. But what happens when cable and its higher costs have left the scene? Will video streaming services jack up their prices, just because they can?
The Digitalsmiths survey found that video streaming customers are, for the time being, very resistant to price increases, with 39% saying they won’t pay more than $15 a month and 29% saying they won’t tolerate any price increase:
As long as this attitude remains, Netflix and other services will be forced to keep their prices low. At the same time, however, Netflix jacked up their prices earlier this year. Even as some customers threw a fit about the increase, most just went along with it.
This feels like it could go one way or the other in coming years, but here’s hoping it stays low.
5. Video streaming rentals will go away
If there’s any endangered species in the world of video streaming, it is the idea of rentals. While Netflix and Hulu don’t bother offering rentals of individual movies and episodes to customers, plenty of other services do, like Vudu, Google Play, and iTunes. Redbox is also included in this group.
According to the Digitalsmiths survey, only 36% of U.S. households use these rental services, with Amazon Video being the most-used, Redbox second, and iTunes second. This represents a 1.9% yearly decrease for the last few years. At the same time, a whopping 63% don’t use these services at all, a number which is steadily growing. Survey analysis also found:
“The bulk (46.9%) of respondents who use these TVOD services spend $1 — $8 per month. Survey results do not show a positive growth trend for monthly spend, since those who spend $12 — $30+ is down slightly [quarter over quarter] and [year over year].”
In short, people are using rentals less and those who do use it are spending less than before. It’s not guaranteed but definitely likely that rentals via video streaming or kiosk are on their way out.
6. Streaming sports will go big
Live sports might represent the final major frontier for video streaming. Most of the video streaming services have focused their attention on delivering non-live entertainment, pre-recorded movies and television shows. These are a natural for the “watch anytime” ethic of video streaming. At the same time, live sport events seem chained to cable television, if only because they’re meant to be watched live.
The survey found that this has limited live sports’ presence on video streaming services, with live sports being the least watched form of entertainment consumed via streaming.
Having said that, with the continuing mass exodus away from cable and the eyeballs at risk, you can bet that sports broadcasters will find a way to make their product work on video streaming. SlingTV and ESPN apps, for instance, are breaking through, but they still need to solve the convenience issue and the problem with events spread across so many different networks, more than can be covered by one app.
If sports broadcasters want to get a piece of the streaming migration, they will have to find a way to make live sports viewing fit what viewers have come to expect from their video streaming experiences. But with all that’s at stake, they are guaranteed to find a way.
7. Streaming companies will have to sneak in advertising somewhere
Eventually, streaming companies will have to face a big problem. Customers are strongly opposed to paying more. Companies are being driven to spend more on original programming. If they’re getting the same revenue but spending more, how can they expect to generate and hopefully increase profits, as will be expected by their shareholders?
There is a strong possibility that they will run to the same place that all Internet companies run to when they need to increase revenues: selling advertising.
While highly likely, this risks chasing away customers. Consumers have an aversion toward commercials. It’s one of the reasons they’ve run to Netflix, with 47% of Netflix subscribers saying so.
So will it come in the form of cheesy product placements and maybe banners above, below, and to the sides of your favorite shows? Only time will tell, but those profits will have to come from somewhere.
