Market Dynamics
Market drivers
High adoption of online video streaming to propel growth
Globally, digital media consumption is growing dramatically. Consumers can access media content anywhere in the world due to the growing demand for devices capable of providing digital media and faster internet speed. Increasing numbers of digital media players, including Amazon, Netflix, Apple TV, and Hulu, are challenging the dominance of conventional television as the primary entertainment platform.
The increasing prevalence of smartphones coupled with a vast array of high-speed internet technologies, such as 3G, 4G, and LTE, has led to a rise in data consumption. Global audio and video traffic have increased the internet's data consumption. In addition, there is a thriving market for connected devices and consumer electronics that can support digital media and high-speed internet technologies that enable consumers to access video content from anywhere in the world. These factors have significantly contributed to the increasing popularity of video streaming platforms.
Increased demand for high internet connectivity to bolster market growth
The proliferation of smartphones equipped with high-speed internet technologies such as 3G, 4G, and LTE has led to an increase in the consumption of data and production of on-demand content services. Some examples of these services include real-time entertainment and gaming services. Connectivity to the internet has made it much simpler to access video content, such as that offered by social media platforms like Facebook, Instagram, Google Hangouts, and Skype. It is anticipated that the convenience offered by video streaming services and the ease with which users can access various types of video content will contribute to the market expansion.
The evolution of the need for video streaming is driven partly by the rising demand for internet connectivity with high bandwidth. In addition, there have been rapid developments in the training industry, such as Microsoft's purchase of Affirmed Networks in 2020. Affirmed Networks is a cloud-native networking Solutions Company based in the United States for telecom operators. Microsoft anticipates that this partnership will assist in developing solutions for 5G and edge computing. As a result, new partnerships and technological developments will propel the market for video streaming services forward during the forecast period.
Market restraints
Expensive content creation and technical difficulties to hinder market growth
In the last few years, there has been a shift from traditional television to online digital platforms, resulting in a significant change in the production of content for various media. Online entertainment providers like Netflix, Amazon.com, Inc., and Hulu have successfully introduced critically acclaimed original content, including series like Bridgeton, Ginny & Georgia, and 25 21. The companies incur a significant financial burden to produce such unique content. It was reported that in 2018, businesses such as Amazon and Google LLC spent more than USD 3 billion on the production of such content. Consequently, the market expansion for video streaming is being hampered by the high costs associated with creating content.
Furthermore, the ability to stream videos is heavily influenced by factors such as the connectivity and performance of the network. For example, to stream a video at a higher quality, you need a rate of at least three megabits per second. In addition, a robust and stable signal is required to watch videos while they are being streamed. As a result, issues associated with network connectivity and technical challenges may slow the market expansion for video streaming.
Market opportunities
Impact of video streaming in the educational sector to spur market opportunities
Videos can significantly improve education by contributing to students' overall retention of information. Included in this category are video lectures and webinars, among other things. In today's day and age, educational institutions like universities, schools, and colleges produce interactive content and convey it in video presentations. In doing so, they are effectively utilizing technology to impart knowledge. The ever-increasing demand for videos that can be used in the classroom is bringing about a profound shift in teachers' roles. The latter can now use a variety of videos in the school and give lessons via video to virtual classrooms worldwide. As a result, the use of videos contributes to the development of a multimodal classroom.
The multimodal learning model requires the utilization of video streaming and video broadcasting as core components. The use of videos in education is influenced by many factors, including pedagogical considerations, technological developments, and social considerations. The adoption of tools that promote better comprehension on the part of students, the need for critical problem-solving skills, a competitive working skill environment, and an emphasis on globalization are some of the pedagogical factors. The use of videos for educational purposes is being positively influenced by technological developments such as the growing demand for mobile devices, the easy availability of video content, the rising number of people watching videos, and the increasing number of people who have access to the internet.
Segmental Analysis
The global video streaming market has been segmented across streaming, solution, platform, service, revenue model, deployment, and user.
On the basis of streaming
The streaming segment includes Live Video Streaming and Non-linear Video Streaming.
The Live Video Streaming segment will likely hold the largest market share, growing at a CAGR of 21.2% during the forecast period. This is due to the increasing popularity of digital media devices and the faster internet speeds that enable consumers to access media content remotely. Additionally, ad-free content, mobile viewing, analytics tracking, plenteous content use, enormous audience potential, and high-quality streams enhance the live streaming of videos. Live content, such as sports and other vital events, has maintained live video streaming's prominence.
Non-linear video streaming
Non-linear video streaming, often referred to as on-demand streaming, is one such key segment in the video streaming market that is characterized by flexibility and user control over content consumption. While in linear streaming, the content is broadcast in real-time on a set schedule, in non-linear streaming, users have easy access to an extended library of videos whenever they want to. It has services like Netflix, Hulu, and Amazon Prime Video, where subscribers can decide what to watch and when. This segment is driven forward by the consumer demand for customized viewing experiences and smart devices combined with high-speed internet connectivity. Such non-linear streaming offers a varied range of content, from films and television series to user-generated videos and niche content, that would attract a large audience.
On the basis of solution
The solution segment includes Internet Protocol TV, Over the Top (OTT), and Pay TV.
The Over the Top (OTT) segment will likely hold the largest market share, growing at a CAGR of 21.6% during the forecast period. OTT solutions provide film and television content through the internet without requiring users to subscribe to traditional cable or pay-tv services. The segment is anticipated to grow significantly over the forecast period due to the rising demand for enhanced automation of business processes and the widespread availability of broadband infrastructure.
On the basis of platform
The platform segment includes Gaming Consoles, Laptops & Desktops, Smartphones & Tablets, and Smart TVs.
The Smartphones & Tablets segment will likely hold the largest market share, growing at a CAGR of 20.5% during the forecast period. This is due to the internet's easy accessibility, rising disposable income, improved standard of living, and lifestyle shifts. Due to the abundance of dependable internet services, such streaming makes live streaming trouble-free. Due to their portability and ease of remote access, tablets & smartphones are more likely to be accepted for online content viewing.
Internet protocol
Internet Protocol TV has created a huge market in the video streaming market. IPTV delivers television content with different internet protocols that offer users the facility of media streaming through a high-speed internet connection rather than usual formats of cable or satellite. This solution makes much greater flexibility and customization available to the user and provides an array of on-demand and live TV services. The segment covers IPTV solutions, which include middleware platforms, CDNs, and application software that interact to raise the bar on the quality and reliability of streaming services. Growing demand for HD and UHD content and increasing penetration of smart TVs and mobile devices are driving the growth of the IPTV segment.
Pay tv
Pay TV remains huge in size, even after increased rivalry from OTT streaming services like Netflix and Amazon Prime. Normally, a Pay TV service bundles various channels, often with premium and specialty channels, offering wide options to customers for desired content. The change that many Pay TV providers have embraced is the introduction of on-demand content and integration with streaming services to help retain old subscribers and gain new ones. Exclusive content, sports broadcasting rights, and broadcasting technology innovation act as the biggest drivers for this market segment. In this respect, cord-cutting trends and a steadily growing preference for flexible, on-demand streaming solutions have become the main challenging factor.
On the basis of platform
The service segment includes Consulting, Managed Services, and Training & Support.
The Training & Support segment will likely hold the largest market share, growing at a CAGR of 21.5% during the forecast period. Enterprises implement a variety of mediums to make training programs more engaging and effective, despite facing various challenges when training employees. To meet this demand, businesses utilize video streaming service providers' training services to integrate and deliver high-quality training to their employees. The authenticity and interactivity provided by live-streaming content aid in retaining the audience's attention and enhancing the training experience. Consequently, the increasing utilization of videos for corporate training is driving the expansion of video streaming in the training and support service segment.
Gaming consoles
Gaming consoles such as PlayStation, Xbox, and Nintendo Switch have evolved beyond their primary function of gaming, becoming central entertainment hubs in households. High-definition video playback with seamless streaming capabilities has made gaming consoles an even more favored platform for a user seeking a unified entertainment experience. This is further driven by the fact that the popularity of gaming consoles among younger demographics goes very well with the growing demand for video on-demand content. With technological advancements in gaming consoles, like better graphics and faster processing, this sector will become even more potent with its diversified and highly active user base in the video streaming market.
Laptop & desktop
Laptops and desktops are major platforms in the case of video streaming due to the versatility and usage rate of these devices. These devices have the added advantages of larger screens and better processing power with more storage, making them perfect for content creators and consumers alike. This is attributed to the fact that high-definition, and even 4K, content could be streamed smoothly over laptops and desktops. Another reason contributing to this preference toward laptops and desktops is the incorporation of advanced technologies, such as higher refresh rates and better graphics cards, in the modern versions of these devices, all adding up to a great streaming experience.
Smart tvs
Smart TVs represent one of the largest platform segments in video streaming, with huge growth and consumer engagement. Equipped with internet connectivity and integrated apps, smart TVs provide an effortless streaming experience directly on larger screens, gaining them massive popularity among consumers seeking convenience and high picture quality. This portion of the platform caters to all users, from casual viewers to avid streamers, and hosts a wide genre of content, including movies, TV shows, sport, and live events. Growing Smart TVs penetration, further technological upgradient such as 4K and HDR, enhances viewing experience, fuelling higher adoption rate. Furthermore, partnerships between Smart TV manufacturers and streaming service providers increase customer engagement and retention by the integration of voice assistants and personalized content recommendations.
On the basis of service
Consulting
Consulting services intended to assist corporations in the formulation of strategies, planning, and execution of video streaming solutions that meet special requirements or objectives. These typically include assessment services related to technology, platform selection, setting up the infrastructure, content management strategies, and compliance with regulatory requirements. Furthermore, these consultants also enlighten businesses about the market trends, user behaviour analytics, and monetization strategies to maximize return on investment. With the ever-growing demand for high-quality, seamless streaming experiences comes the increasing demand for consulting services to ensure that organizations can deliver robust, scalable, and engaging video streaming platforms.
Management services
Managed services will play a very important role in the video streaming market because an increasing number of streaming services are being outsourced to improve their performance, scalability, and user experience. Managed services, from end to end, include content delivery networks (CDNs) and cloud-based services coupled with technical support, thus freeing firms to focus on content creation and marketing rather than on managing their infrastructure. This segment is powered by the requirements of high-quality streaming and low latency, seamless user experience if not, it can get very challenging to draw and maintain viewers within an intensely competitive market. Managed services also embed robust security in terms of content protection against piracy or unauthorized access.
On the basis of revenue model
The revenue model segment includes Advertising, Rental, and Subscription.
The Subscription segment will likely hold the largest market share, growing at a CAGR of 21.7% during the forecast period. Access fees or subscriptions are frequently required for online video streaming. For instance, Netflix provides various online video streaming subscription plans. The subscription model allows access to a wide variety of video content, including exclusive series. Consequently, growing subscribers to subscription-based services are anticipated to generate market expansion opportunities.
Advertising
advertising revenue model has been prominent in the video streaming market, with a focus on ad-supported video-on-demand. In this model, access to a customer's content is given in exchange for either no charge or a reduced price, provided their ads are shown. Principal companies like YouTube, Hulu, and Peacock have used this model in attracting a huge following without subscription fees, simply by fielding extensive and varied content libraries. The advertising revenue model is projected to continue its growth trajectory, benefiting both video streaming platforms and advertisers who seek to reach specific demographics effectively. The increasing consumption of digital content on mobile devices and connected TVs further fuels this trend, making advertising a pivotal revenue stream in the video streaming market.
Rental
Rental is quite popular with those users who prefer watching a particular movie or series without being tied down by a subscription. Specifically, the rental model is very suitable for newly released films, premium content, and special events. It offers flexibility and low cost to viewers. Companies like Amazon Prime Video and Apple iTunes have grown out of this model by making huge libraries of content available for rent. This will also help content developers and distributors reap some immediate revenues, opening it to a bigger audience that might not be interested in a full subscription. In this regard, the rental revenue model is going to remain one of the most critical factors in video streaming, giving in to different consumer preferences while fueling overall industry growth.
On the basis of deployment
The deployment segment includes Cloud and On-premise.
The Cloud Deployment segment is widely used and is estimated to grow at a CAGR of 21.4% during the forecast period. Cloud computing advancements have revolutionized video streaming and enabled the development of streaming platforms such as YouTube and Netflix. Video streaming platforms have adopted cloud-based deployment to help with high bandwidth and speed. Several streaming service providers have chosen cloud-based deployment over on-premises because it can handle larger data volumes and deliver a superior viewing experience.
On-premise
On-premise approach allows companies greater control over their data and streaming processes, providing enhanced security and compliance with industry regulations. On-premise deployments are often preferred by large enterprises, media companies, and institutions that require high levels of customization, data sovereignty, and reliability. The infrastructure is typically managed by the organization’s IT department, ensuring that the streaming service can be tailored to meet specific needs and integrated with existing systems. While on-premise solutions can involve significant upfront costs for hardware, software, and maintenance, they offer long-term cost benefits and operational control compared to cloud-based alternatives.
On the basis of user
The user segment includes Enterprises and Consumers.
The Consumer segment will likely hold the largest market share, growing at a CAGR of 20% during the forecast period. This is due to the media and entertainment industry's increased viewer numbers of video on demand and live streaming services. The consumer segment is expected to expand due to the convenience of remote video viewing. Growing smartphone subscriptions and the adoption of connected devices, particularly smartphones, are anticipated to contribute to the growth of this market segment.
Enterprises
Video streaming helps an enterprise with employee engagement, smoothness in corporate communication, and remote working. Enterprises under this segment include businesses from technology, finance, healthcare, retail, and education industries. Enterprises need high-quality, reliable, and secure streaming solutions for brand reputation and seamless business operations. Other important factors driving video streaming services in enterprises are hybrid working models and increasing emphasis on digital transformation. Other trends include the integration of advanced analytics, AI, and machine learning to personalize content, improve user experience, and measure engagement. Additionally, enterprises seek compliance to data security and privacy regulations in video streaming solutions.
