Starting with the golden age of radio, to the remarkable popularity of television and the ground-breaking invention of the smartphone, technology has consistently evolved with new products and services aimed at keeping us entertained, amused and even amazed.
Through the wonders of the internet, we now have access to vast amounts of media content and an ever-growing world of entertainment.
This new era, though, has also brought a host of opportunities and challenges for companies fighting for customers’ hearts, views and, ultimately, cash.
The media sector has long been a lucrative one. Revenue from the OTT video market alone is valued at about $80 billion today and is expected to reach $120 billion by 2024, senior analyst at Ovum Tony Gunnarsson told Mobile World Live.
So, it’s no surprise more and more names in the media sector are setting eyes on the prize, looking to take the crown from the current leader, Netflix.
App Annie figures show Netflix ranked top in the US in terms of monthly active users and spend on mobile at the start of 2020.
However, two major giants are looking to muscle in.
Let battle commence
Disney+ and Apple TV+ entered the world of video streaming in November 2019, promising to put the heat on Netflix’s market position.
And just a month after its debut, Disney’s streaming service racked up 22 million downloads, data from analytics company Apptopia showed.
By the beginning of February, the service had attracted 28.6 million paying subscribers. After such a solid start, the company moved quickly to win the European audience with an aggressive expansion planned for the end of March.
Netflix could, therefore, be feeling the pressure from competition, particularly at home, as it reported slow growth in its US subscriber base in Q4 2019.
Gunnarsson hailed the launch of Disney+ as “the biggest thing to happen to video since the launch of Netflix”, but added its entrance did not necessarily translate into a threat, with room in the market for both services.
He predicted “a fairly large proportion of Netflix subscribers around the world are going to keep Netflix and have Disney+ on the side”.
Apple TV+ might also struggle to shake Netflix’s ground long-term, with the Ovum analyst tipping users to sign up to the service through their Apple devices to watch a specific piece of content.
“They could then cancel their subscriptions and sign up again after six months,” he said.
In fact, Gunnarsson doesn’t expect Netflix to lose its dominance in online video in the next five to ten years at least.
He pointed out that there were multiple reasons for the company’s success, such as its playback technology, which enables a consistent level of streaming quality.
“Regardless of the broadband speeds you have or if you are on a mobile device, it doesn’t matter what internet connection you have, what device you’re on.”
As new names come into the game of video streaming, demand rises accordingly. The OTT video market is tipped to continue to grow in the next five to ten years: Ovum expects subscribers to reach 900 million this year and more than 1 billion in 2021, Gunnarsson stated.
Lexi Sydow, senior insights manager at App Annie concurred, while tipping the video streaming market on mobile in particular to be highly competitive this year.
“More time than ever before is spent streaming content on mobile. In 2020, this is set to approach 700 billion hours on Android phones alone. With the 2019 launches of Disney+ and AppleTV+, and the upcoming launch of Peacock and HBO Max, we expect to see growth in downloads, engagement and spend as consumers trial new services”, she commented.
Paul Barnes, MD for EMEA at App Annie, expects the streaming war to heat up in 2020, as consumers decide where to spend an estimated 674 billion hours on mobile.
But, for players in the increasingly competitive market to keep up, Sydow argued they will need to put an emphasis on quality and exclusive content, a major draw for consumers, along with original series and a strong recommendation engine.
“Ultimately, maintaining a strong, efficient and bug-free user experience on mobile is key”, she added.
Impact of 5G
As next-generation networks become better-equipped to deal with the influx of data usage, the next logical question is what impact will 5G have on the streaming services industry and will it create an even bigger boom?
Gunnarsson stated “5G on the surface does not have an impact on OTT video”, because consumers around the world are already aware that the future of watching TV, video and movies is through services like Netflix.
“Even if we were stuck with 4G for the rest of eternity, people would still be moving to services like Netflix,” he said.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.Subscribe to our daily newsletter Back