OTT streaming consumption in the US has shown a tremendous increase with the rise of digital media players such as Netflix, Hulu, Amazon, Apple TV, Roku, and Boxee, and more.
With the rise of Omicron, COVID-19 is now a part of our everyday lives. And for the foreseeable future, the OTT streaming delivery landscape finds itself at a significant turning point as we enter 2022.
2021 has been a wild ride, and most of us are eager to leave the year in dust. So what will be the major change in the OTT industry ? How will OTT platforms be able to ensure customer stickiness? What are the best trends that will stand out in 2022?
Before thinking of 2022, let's dive deep into some significant happenings of the OTT industry in the previous year:
A recap Of OTT streaming insights in 2021 that you can't miss!
In-home media consumption due to Covid-19
The crippling effect of the pandemic reflects a significant change in the media consumption of the audience. With theaters and other public venues shut down, people had to stay indoors and consume entertainment. Due to COVID, the box-office revenue in the US decreased by four-fifths in 2020 to US$2.1bn.
A quarter of all US cinemas were closed in the past year. And quite obviously, the OTT streaming industry continues to grow significantly. The US is the largest OTT industry globally, bringing in $22.8bn via both subscription and transaction models. Though Television and box office had a strong year of growth in 2021, OTT is about 3.4 times the size, a ratio expected until 2025.
Subscription fatigue refers to losing customer interest in subscription services over time. This happens due to the spike in overall subscriptions. Customers get OTT streaming subscription fatigue as it is tough to keep track as they have too many subscription services.
OTT industry has seen substantial digital acceleration amongst rolling lockdowns and restrictions in the past 18 months. Despite the increasing number of subscriptions amongst US households, there is also growing subscription fatigue.
Subscription fatigue is a serious thing, especially as prices continue to rise. A recent subscription fatigue 2021 report says 52% of consumers have difficulty accessing content divided across many subscriptions. Consumers are also price-conscious, so rising prices happened in the previous years is the cause of frustration.
Media giants ruling the premium market
Netflix is the OTT streaming pioneer and remains the industry's clear leader. Netflix's churn has hovered between 2% and 3% for nearly the entire period. It is the lowest compared to all other OTT platforms, including Disney+, Hulu, Starz, Showtime and HBO Now. About 86% and 93% of other OTT platform subscribers subscribe to Netflix. More than 65% of Netflix subscribers do not pay for any of the alternatives, again showing that consumers mostly prefer Netflix.
Media giants like Disney and HBO have released Disney+ and HBONow in the past year. In addition, these media giants are flooding the market with premium content, making it difficult for new broadcasting OTT streaming services to compete with these established firms.
The US OTT industry increased competitive rivalry in the past year as more companies entered the market, leading to market expansion. And TV broadcasters also entered the market by launching their app or investing in other OTT platforms. Further, OTT streaming platforms have been engaging actively in new collaborations, multiple device integrations, etc.
For instance, in May 2021, HBO Max expanded its offerings to consumers, announcing that it would launch another ad-supported (AVOD) version of the service in the first week of June. The AVOD version of HBO Max costs USD 9.99 per month, which made other platforms also bring better plans.
5 OTT Consumption trends to dominate in 2022
In the past year, OTT streaming has been on the rise. With more consumers subscribing to multiple OTT platforms, it's no wonder that streaming services are a significant player in the media industry. In 2022, what OTT trends do you expect? Let's look at some developments in the OTT industry and the OTT trends to watch for the coming year.
5G is the new game changer!
5G is the upcoming generation of wireless technology that can fuel innovation and transform our media consumption. 5G transmits large chunks of data more efficiently, and we can expect faster download speeds and support more connected devices than ever before.
Currently, most virtual reality (VR) and augmented reality (AR) applications for OTT streaming are limited to 4G. This further results in glitchy experiences. With the advancement of 5G networks, viewers will have an immersive experience using the latest VR and AR technologies.
Innovative monetization models
Subscription Fatigue is a growing problem with more people watching subscription-based OTT streaming services. OTT platforms are switching to monetization models such as pay-per-view as an alternative to subscription bundles and models. Pay-per-view is a type of OTT streaming service option that enables a viewer to pay to watch individual platforms via private telecast.
There could be increased usage of bundling different subscription packages to create platforms. We can already see how Disney+ monetization models with ESPN, NBC, and others. OTT platforms might continue to follow the subscription bundle method for 2022 to eliminate subscription fatigue.
Localized streaming delivery
Localization is a significant trend that is designed to make online content accessible to audiences in various locations. This helps creators to expand their reach and connection with a larger audience and expand their streaming delivery.
Some OTT streaming localization techniques methods include translated captions, subtitling, multi-currency payment options, and more. The main objective of localized streaming delivery is to enhance the viewing process irrespective of where they are located.
Many creators also take streaming delivery to the advanced level and create localized content for different audience segments. For example, Netflix UK is an initiative by Netflix to connect with the British audience, with more personalized content.
Another major OTT trend to be expected in 2022 is content fragmentation. Content fragmentation is a strategy that broadcasters use to target niche audiences to maximize their conversions. The intent is that if the content is carefully segmented for OTT streaming delivery, it will connect with the target audience.
OTT streaming delivery that use content fragmentation can build loyal audiences around their brands. Since content fragmentation targets niche audiences, it brings an added benefit for broadcasters who want to monetize their videos through advertisements. Access to a highly targeted market is precious for brands who wish to deliver to a target audience with better conversions.
Subscribers stick around to an OTT streaming platform only where the content is engaging. An OTT platform's success depends on seamless content discovery.
User's like to see personalized content based on their previous experience that may break their preconceived notions of what to watch. Today the viewers expect you to know them and help them through the search and discovery process. Netflix has mastered content personalization and it is a great example to get started with.
It's renowned personalized recommendations. In the most advanced way, content personalization provides a clean, intuitive way to find and consume content comfortably and engagingly. Recommendation systems like Argoid are needed to leverage personalized recommendations, especially in the OTT streaming industry. If you think your business can get better with content personalization in 2022, it's high time you started investing in one. We would love to guide you with it.
As the OTT streaming platforms continue to mature, marketers must be willing to make the most of the above OTT trends for their business or brand message to maximize efficiency. Using the most advanced streaming technology, you can implement the above trends and boost your customer experience.
We foresee the rise of some exciting new technologies and the smoothing of others. It'll be exciting to see how 2022 looks like after some uncertain shifts over the past year.
FAQ's on OTT streaming consumption Trends
What is subscription fatigue?
As the subscription fee increases starts the exhaustion in customers. This causes potential decrease in consumer interest around subscription services over time as the total offerings among competitor OTT platforms also increase.
What is the future of OTT streaming industry in 2022?
2022 is going to be a very exciting year for the OTT players as there is high competition and also the content pipeline in the OTT industry will be stronger than ever. As the pandemic has increased the viewers, most of them have got acquainted to the new lifestyle, therefore in the year 2022 it is expected to further amplify the reach.
How is OTT changing the media industry?
The advent of OTT platforms has made it very easy and convenient for broadcasters to directly and more closely showcase unique content to customers. This helps build a direct relationship with the customers through an OTT platform. It also helps to create a strong brand image and improves the brand value. With content being so accessible most of the customers are choosing OTT over theatre experience.
Connect with us if you plan to personalize your OTT streaming experience in 2022!