Online Video Distribution Trends

Pay-TV carriers and content owners are responding to the consumer trends, as they prepare for the challenges posed by the new market environment. They are actively supporting/developing services for watching video on tablets and smartphones, and boosting internet speeds to support online distribution.

Content creators are essentially indifferent to carrier dynamics, so long as they get paid well. For now the cable/satellite/telco service providers offer by far the most lucrative monetization model. The disruption of this model by online platforms is an obvious concern; consumers are not accustomed to paying as high a premium for content on the net.

The market will remain in a state of flux, as new developments transform the industry. Opportunities of online video distribution have attracted a host of technology companies. Google, Netflix, Hulu, Vevo, Amazon, Microsoft, Apple and Yahoo present both an opportunity and a threat for traditional producers of TV content. Some of these companies are owned and operated by big networks, studios, and music corporations. Hulu for instance is owned by NBC, Fox, Disney–ABC, and Vevo is run by a joint venture comprising Universal Music Group, Google, Sony Music Entertainment and Abu Dhabi Media.

Vevo, in March 2013, launched Vevo TV, an advertising-supported internet television channel running 24 hours a day, featuring blocks of music videos and specials.

Meanwhile, in April 2014, Amazon added multiple scripted and animated shows to its subscription-based Prime service, and released the Fire TV box meant to stream the content directly on to televisions.

We are witnessing the confluence of a number of forces that, taken together, will further accelerate the growth in online media consumption.  Consumers’ viewing preferences and habits continue to steadily shift to online devices. Supply and distribution is better aligned with their tastes and preferences. And advancements in technology provide for superior consumer experiences.

Improvements in streaming technology and faster broadband links have dramatically reduced the time it takes for content to load. Developments in these fields also permit content providers and advertisers to engage with viewers in a number of different ways.

While many of the market developments in the earlier years had been U.S.-centric, by 2014 the momentum had moved to Europe and rest of the world. Netflix, for instance, which started its international operations in Canada in 2010, was offering its service to over 40 countries by 2014, and 190 by 2021.

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