The complexity of the behind-the-scenes architecture of video technology can be overwhelming; especially since there are so many new entrants to the streaming and video-on-demand market. And though massive media conglomerates like Disney+, Netflix, Hulu, etc seem to be leading the race to market dominance, there is plenty of space for newcomers to claim a stake of market share. As one of the drivers of improving back-end standards of video codecs, containers, video players, and analytics, Bitmovin has been hard at work to determine what are the most important factors and trends you need to know to compete in this rapidly changing industry. Is it Low Latency? CMAF? MPEG-DASH?
As 2019 came to a close and 2020 came into full swing, we’ve organized the three top trends (in no particular order) that you need to implement to succeed and to scale in the video technology industry:
- Better Viewer Experience – Increase viewer expectations with high-image-quality content
- Faster Time to Market – Producing assets and services at competitive speeds and efficiency
- Operational Optimization – Controlling your costs, risks, and managing the complexity of your app for the highest possible ROI
Your first thought might be – “eh, these trends are too broad and don’t offer a specific fix”, but the reality is, our industry operates in the back-end and contains a lot of moving pieces. Identifying a single factor (ex: Low Latency) would be the least helpful bit of advice that we could offer – however, these three trends act as a true trend should, as a guideline and/or theme aimed at improving your business’s chances for success. Our experts, Katy Oberdiek (PMM), Chris Müller (CTO), and Kieran Farr (VP of Marketing) explained these value drivers in depth during a recent webinar. This blog will explore and summarize their insights into a bite-sized reading experience.
Prefer to watch/listen instead of reading? Check out the full VoD webinar here
Video Technology Trend #1: Viewer Experience
It doesn’t take a video technology expert to point out that a great viewer experience is a key defining factor in succeeding as a content distributor. Bad press and viewer feedback can be permanently damaging and result in loss of subscribers and/or advertisers – a direct impact on your monetization potential). It’s through the viewers’ perspective that you’ll understand why experience should be at the top of your team’s mind when building out your video app or workflow.
There are well over 63,000 variations of devices on the market – consider a single brand name with video playback capabilities, ex: the latest line of iPhones (11, 11Pro, 11ProMax) and multiply that by a factor of X for smartphone brands, then multiple once more for device type (Tablet, SmartTV, OTT, etc). We anticipate that with the growing capabilities of manufacturers, device fragmentation will continue to grow exponentially.
It stands to reason that you need to ensure that you can offer a repeatable and memorable experience across all devices with as much consistency as possible. Optimizing your business’ workflows to hit as many viewers in as many locations as possible and with consistent quality will be one of the biggest ways your organization can “win” in 2020.
One of the many ways you can focus your attention on viewer-experience is with constant success measurements and metrics. For example, video quality metrics like PSNR, VMAF, or SSIM or advanced viewer metrics like adaptation behavior, bitrate usage, and the convex hull of encodings.
Video Technology Trend #2: Time to Market
Although no one individual trend is the end-all solution to succeeding or prepping for future scale, time to market is the absolute baseline minimum, as viewers expect your content online within minutes of the conclusion of the broadcast or stream. Similar to the viewer experience trends, bringing your app to market in a timely fashion is very heavily influenced by device reach and speed. Organizations that can reach as many devices as possible and as fast as possible are more likely to grab a sizable piece of market share. Consider the current scenario – below you can find the top 5 subscription OTT video services (SVoD) for the American, European, and Asian Pacific markets:
The US market has long been held by Netflix & Amazon Prime, but with the recent semi-global launch of Disney + (soon-to-be launch in the European market). The whole industry is getting a shake-up – in fact, according to Digitial TV Europe (via Nielsen reports) consumers are willing to pay more and add more SVOD services to replace their expensive cable services. Therefore, it’s imperative to bring your app to market as soon as possible to capture a share of the newly fragmented market.
A driver of this theme is not only the capability of launching quickly but the immediate turnaround time for new content. Billions of dollars are regularly spent on content creation, but making the content available in a timely manner is the largest workload and will yield a huge competitive advantage. Fast encoding offers near-instant turnaround time in the highest quality and cloud-based workflows to scale horizontally. 2020 will be the year where consumers and distributors alike will anticipate their content to publish efficiently and instantaneously.
Video Technology Trend #3 Operational Optimization
As with the previous trends – Operational Optimization is a trend that is both a stand-alone theme and one that is the culmination of the previous two trends. To achieve optimal operational functionality one must have the perfect mix of positive viewer experiences, device reach, and cost-efficiency. All of these factors require different measurements, metrics, and activities to succeed. In our webinar – Katy identified specific definitions for the factors listed before:
- Ability to scale while maintaining positive unit economics
- Content (and revenue!) protection via Digital Rights Management (DRM)
- Meeting viewer demands (content type, availability, quality) while maximizing revenue for advertising-based video on demand (AVOD)
- Mitigate the risk of failure by limiting app/platform downtime & maintenance
An example of an organization failing to optimize operational functionality efficiently was Sony (Vue) which repeatedly increased the consumer price to offset rising costs.
Our 2019 video developer report indicated that distributors are using at least one monetization model; the two most common models are subscription-based models (SVOD) and ad-based models (AVOD) – each coming with their own set of operational challenges.
Our 2019 Video Developer Report further indicates that ~60% of people working in or around content distribution use some form of DRM/content protection (and that number is expected to rise drastically in the coming year).
Consumers getting tapped out on monthly subscriptions will cause a rise of more ad-supported businesses. The goal here is to resolve technical issues behind serving ads, for example by SSAI. A smoother and better ad experience for the viewer will result immediately in better business results.
What can you do to help shape the future of video?
So how can you be one of the organizations who succeed in the industry and help shape the future of video? By applying custom variations of these trends to your target audience. Be sure to focus on your core competencies and work with experts that can help you optimize your video workflow. Determine which device types, countries/regions, and type of content you want to associate (hint: the endgame goal should be all), measure the correct metrics to ensure you’re providing the proper viewer experience, and most importantly, watch where and how you’re spending your money!
Do you agree with our experts and our assessments? What do you think are the top trends for 2020? Let us know by shouting our name to the socials (@Bitmovin) and use #DareToStream.
Don’t forget to catch the full (and free) VoD webinar here