As we close out 2023, Applicaster is revisiting our 10 OTT Trends to Watch in 2023 to explore where we hit the mark, where the industry threw us some curveballs, and what to expect in the coming year.
What did we miss in 2023, and are we on track with our 2024 predictions? Check out 2024 OTT Trends: 6 Shifts Changing the Industry to see what’s next!
Trend 1: The Rising Importance of Data Analytics
Prediction: Emphasis on data analytics for smarter advertising, customer retention, and content personalization.
Reality: True! Data analytics is more important than ever. According to Caretta Research's Making Streaming Ads Pay report, content owners are increasingly using technology and data to improve UX and unlock new advertising inventory. This approach has been especially effective in hybrid monetization models (Trend 3), where streaming platforms are using data to inform their move from subscription-only revenue to more diversified, ad-based strategies.
Trend 2: Personalization of Streaming Experiences
Prediction: Enhanced personalization in streaming services, from content to advertising.
Reality: True! Streaming services have advanced in offering uniquely tailored experiences, with product managers moving from traditional wireframes to more adaptive, user-focused designs. As explored in our Redefining OTT App Product Design: Going Beyond the Wireframe white paper, achieving deep personalization with innovative tools and strategies is the key to growth in an incredibly competitive streaming market.
Trend 3: Hybrid Monetization Models
Prediction: A rise in hybrid models combining various monetization strategies like SVOD, AVOD, and TVOD.
Reality: True! This trend was vital for platforms like Netflix and Disney+, which continued to grow their AVOD models in 2023 to complement their SVOD offerings. According to Parks Associates, the use of AVOD and FAST services in US households rose from 31% to 41% in just six months. This indicates consumers' growing preference for flexible options amidst streaming businesses’ search for profitability.
Trend 4: Sports Streaming’s Continued Dominance
Prediction: 2023 would see a rise in sports streaming, with more exclusive content and streaming packages.
Reality: True! Sports streaming has experienced incredible growth, with Applicaster's 2023 beIN Sports partnership serving as a prime example. This network, offering exclusive international sports content, highlights the industry's transition towards premium app experiences. Additionally, S&P Global Market Intelligence's analysis of sports media rights payments and Netflix’s foray into live sports signal the industry's continued shift toward streaming, showcasing its dominance and appeal.
Trend 5: Localization in Streaming
Prediction: Streaming services would focus on localization to connect with broader audiences.
Reality: True! Our The Power of OTT for Regional Broadcasters article illustrates the marked move towards streaming localization. Regional broadcasters like Omroep Brabant have leveraged OTT platforms to deliver culturally relevant content, reaching both local and international audiences. Their custom TV app is a prime example of how regional content is gaining prominence and expanding audience reach.
Trend 6: Expansion of Video Streaming into New Industries
Prediction: Diversification of OTT into sectors like education, healthcare, and more.
Reality: Mostly true! The OTT industry is witnessing significant growth in education, as detailed in Technavio's forecast of a USD 285.46 billion market increase by 2027. Forbes also emphasized streaming’s transformative impact in education through remote and online learning. The opportunity for similar expansion into healthcare and beyond is still being realized and suggests limitless potential for OTT tech.
Trend 7: Aggregation and Bundling to Combat Churn
Prediction: More aggregation and bundling of services to reduce churn and subscription fatigue.
Reality: True! The SVOD market is increasingly turning to telecom partnerships for bundling, which Variety outlines with their take on telecom's role in streaming's future. Additionally, Disney's integration of Hulu with Disney+ in 2023 exemplifies this pivot toward unified experiences, aiming to boost engagement and lower churn. These developments show that the streaming industry is actively adopting bundling strategies to address user retention challenges.
Trend 8: Utilization of Short-Form Video
Prediction: OTT platforms would integrate more short-form video content.
Reality: Not quite. The integration of in-app short-form content has yet to really catch on. Netflix's quiet discontinuation of its TikTok-style 'Fast Laughs' feature and the absence of impactful short-form content from major OTT players reflect this reality. However, the widespread use of short-form YouTube and TikTok videos to promote long-form content highlights their potential. As content consumption habits continue to evolve, new opportunities for short-form video in OTT will emerge.
Trend 9: Gen Z's Influence on Streaming Habits
Prediction: Gen Z’s unique media consumption habits would shape the industry.
Reality: True! Gen Z is significantly influencing streaming, from their extensive OTT usage to their overwhelming preference for mobile content. Deloitte's insights reveal Gen Z's radical shift towards digital socialization and frustration with subscription costs, leading to high churn rates. Their inclination towards user-generated and ad-supported content shows a demand for more affordable, interactive media experiences, driving streaming services to adapt with new strategies and offerings.
Trend 10: Gaming Integrations in OTT
Prediction: Increased gaming integration across OTT platforms.
Reality: Developing. While 2023 didn't bring a major takeoff in OTT gaming integrations, the foundation for future growth has been established. Netflix's experimentation with cloud gaming services in the U.S. and gaming expansion to TVs are indicative of emerging efforts in this space. Additionally, Forbes discusses the potential of 5G to enhance OTT video and gaming experiences, revealing a growing market interest and technological support for deeper OTT gaming integrations.
In looking back on our 2023 OTT trends, it's clear that the industry has largely embraced these predictions, reflecting a dynamic year and setting the stage for the innovations we anticipate in 2024.