The single biggest impact of generative AI for large content producers and distributors isn’t about disrupting the media-making process. It’s that it gives its fiercest competitors — content creators on YouTube and TikTok — more tools to eat further into everyone’s daily video consumption that the media industry is battling for.

According to a fresh report by studio-funded thinktank ETC, “AI and Competitive Advantage in Media,” generative AI “potentially disrupts the already unfortunate economics of the media business: stable demand (never more than 24 hours in a day) and exploding supply.”

In the report, Yves Bergquist, ETC’s resident data scientist and AI expert, argues that what’s happening in the media industry is proximate to what already happened in manufacturing: automation of the craft of making a product (i.e., making the product computable).

By computable they mean that content is produced in volume and is “machine readable” in terms of every aspect of its creation to distribution to feedback from audiences being data and therefore available for dissection

Traditional media companies currently are not “computable” in the sense that they produce products linearly, one at a time. It is scarce, whole, long-form (not conducive to being sliced and diced by an online audience) and unstructured (its narrative DNA is not yet machine-readable).

This is going to have to change if studios and streamers want to part of the bigger picture in a few years’ time.

ETC divides the creative process into three parts. Bergquist dubs the ideation part, where creatives “sense” what an audience wants to see, “zeitgeist intelligence.”

Then there’s the core of the creative process, where creatives define their voices and make strategic decisions about what product will be crafted.

Finally, the product is made.

AI’s immediate impact is on that final phase. But by automating production, “Generative AI not only puts more emphasis on Zeitgeist-sensing and creative decision-making, it gives creative decision-makers tools to quickly and cheaply tinker, experiment, and prototype.”

At the same time, traditional media companies “risk losing their monopoly on the craft of high-quality content.”

Generative AI empowers social creatives to quickly and cheaply craft “studio quality” content threatening the status of traditional media. They can do this because their knowledge of what the audience wants is crowdsources by links, likes and recommendation algorithms. The content produced is computable in the sense that it can all be digitally mined. And the scale of content production means there’s enough supply to fit cater for every audience whim.

But ETC spots a weakness. Social media platforms and content creators reliant on those platforms lack any real understanding of their audience, claims ETC. It is just “basic content match-making”.

Instead, studios and especially streamers, can strike back against pure AI content generators by using the data they have at their disposal more intelligently.

“Programmatic content distributors like TikTok match content with audiences without any semantic understanding of why this content resonates. It’s just a programmatic marketplace that computes the content de facto.”

With generative AI bringing high production value tools to social creators, we can expect a new category of “short-form linear content” to emerge on social platforms.

Studios, on the other hand, “have the longest experience and the largest dataset available to not only develop an intelligence go their audiences, but to draw them into a deep relationship with their franchises.”

Media organizations, “especially those with a streaming service,” have both the data and a unique capability to understand the cultural zeitgeist. They can use AI to better “know” what audiences want, Bergquist says.

ETC also suggests that it’s the large media organizations that have the financial backbone “to create highly integrated and replicable AI-driven virtual production workflows.”

It contends that traditional media players will need to differentiate through immersive, multi-platform, world-building franchises, a trend they are already pursuing of course.

This, says ETC, “is the greatest opportunity for large media organizations to leverage virtual production and generative AI together to quicken and cheapen the cost of producing these multi-format immersive pieces. This new form of computable content will run on game engines.”

In so doing, this “revolutionizes the way stories are told,” with integrated narratives spun across linear and immersive media products.

There are warnings, though.

“Media organizations don’t have a software culture, nor can they support large AI R&D assets. They could partner with (or acquire) key AI research organizations to leverage their data to create their own proprietary content and audience intelligence models, but this is a heavy lift.”

ETC also identifies a need for intuitive “human-ready” and “business-ready” interfaces for AI models, which continues to be the greatest bottleneck for AI in enterprise. Too often, says Bergquist, organizations can’t connect models and business needs.

“Whoever can redesign their organizations and workforce needs to best create a ‘culture’ of AI and data will move faster than its competitors.”

Education, insists ETC, is the largest opportunity in AI today.

While everyone seems to agree AI represents a big financial opportunity to automate some production and postproduction workflow it begs a question: Does taking knowledge of the craft out of creative work affect creative decisions and creative output overall? Or, put another way, does knowing the craft make a creative a better decision-maker? ETC has no answers for this, and perhaps we’ll only find out in time.

More globally, what the media industry needs right now is a distinct and actionable AI vision.

READ MORE: New data on the writers’ strike and use of AI in Hollywood (NRG)

As the Writers Guild of America strike continues to unfold, a new report reveals that streaming viewers are both supportive of the writers but also cautiously open to the role of AI in the entertainment industry.

The report, “Reading Between the [Picket] Lines,” from global insights and strategy firm NRG, is based on a study of 3,000 US consumers ages 13-54 who subscribe to at least one streaming service and watch a minimum of four hours of streaming content per week.

While public understanding of the WGA strike remains low, the report found, there is already strong support for the writers. More than 60% of respondents indicated awareness of the strike, but only 13% said they understand “a lot” about the strike and the reasons behind it. However, among those who feel they understand “a lot” about the strike, a staggering 74% say that they support the WGA’s decision to strike. Forty-three percent of viewers say that they either “strongly” or “somewhat” support the decision to strike — more than three times the number who oppose the strike (13%).

As media coverage continues, it’s likely that sympathy for the WGA’s position will grow — especially in the early stages of the strike while studios still have content to release and most viewers don’t yet feel personally affected by the disruption to the industry. The most immediate impact of the strike has been the suspension of late-night shows; however, only 10% of streaming viewers say this is an issue that they personally care about.

Interestingly in these politically divided times, support for the strike appears to transcend political divisions. Consumers who self-identify as liberal are among the most likely to back the strike, with 57% in support and only 10% opposed; but even conservatives say they support the strike by a two-to-one margin (34% support vs. 16% oppose).

When it comes to the role of AI in the entertainment industry — one of the central issues at stake in the strike — viewers are yet to fully make up their minds about where they stand, yet more than two-thirds expressed concern about the use of AI in Hollywood.

“To me that’s an early warning sign of a potential backlash if studios are seen to be using AI specifically for the strike,” Katie Kelley, NRG’s executive vice president of content and strategy and a former vice president of market research at Paramount Pictures, told Lucas Manfredi at TheWrap.

“That would suggest that as the media coverage kind of continues, maybe builds around the strike and those motivations do become maybe a little bit clearer to consumers that they are able to make up their minds,” she continued. “It would suggest that as awareness builds, the same level of support will probably pan out in the long run.”

While there’s a contingent who are strongly opposed to the use of AI to write scripts, most viewers are willing to at least wait and see what AI-supported content looks like before deciding how to feel about it.

More than a quarter (28%) say they’d be less interested in watching a show if they found out it was written with the help of AI, while only 13% say that they would be more interested. Overall, however, a majority of viewers — nearly 6 in 10 — say it would have no impact on their willingness to watch a show. This suggests that, for the most part, consumers are still making up their minds about whether they want to lean in or out of AI-generated content.

Only 12% of those surveyed believe that studios should fully adopt AI to script content with minimal human intervention. In contrast, a third of the respondents (32%) advocate for a complete avoidance of AI in the entertainment industry. Interestingly, a significant 38% see a potential role for AI in the sector, but insist that its use should be responsible and guided by seasoned human screenwriters.

“When you add those together,” Kelly noted, “it means that more than two-thirds either want the industry to avoid using it or only use it under the discretion of humans. “I think that’s a compelling data point.”

For generative AI to successfully carve out a space for itself in the entertainment industry, it’s critical that viewers see it as a tool to support human screenwriters — not as threat to their livelihoods. If studios are seen as turning to AI to replace striking writers, this could create a strong public backlash against the technology, Kelly said.

“If studios are generally interested in exploring this new technology, I think they need to tread a little carefully during the strike period.”

READ MORE: Viewers Are Wary of Studios’ Use of AI in Film and TV Scripts, Too, Survey Finds (TheWrap)

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READ MORE: IABM Technology and Trends Roadmap (IABM)

The Broadcast and Media (B&M) technology market was worth $67 billion in 2021 as the industry continues to rebound from COVID. The market will grow between now and 2026 at 1.6% a year, according to the latest annual survey by the IABM (The International Trade Association for the Broadcast & Media Industry) and research company Caretta Research.

Much of the decline in 2020 and the subsequent rebound in 2021 was driven by the production and post-production services industries as the creation of new content was postponed until after the worst phase of the pandemic.

Many areas of the industry are expected grow at closer to 3-5% CAGR, such as technology used in the production of content. For instance, the report expects rapid adoption of camera-to-cloud tools despite lack of a common interchange format between vendors. Remote collaboration and IP intercom systems are prime examples of the “enormous improvements” to efficiency forced into being across the industry by COVID.

PTZ cameras with more sophisticated optics and automation are being increasingly used for a vast array of events. PTZs with AI, for instance, are being used to assist in flagging and referee reviews of off-sides in sports. Distributing more live feeds from an event is now becoming a requirement yet “there is no prevailing format, metadata or rights management for this presently,” notes the report.

Most concern in the IABM report is placed around the shift to cloud.

“The words ‘cloud’ or ‘the cloud’ raise many different thoughts, prejudices and different meanings among our peers,” writes Lorenzo Zanni, lead research analyst at IABM. “To some, cloud is playout, others distributed computing, and yet some only think of this as offsite public storage within our industry.”

The vision of running everything in an off-prem cloud — whether public or private — still has limitations, the IABM finds. These limitations are typically overcome by using hybrid solutions, and sometimes even by including dedicated hardware. The trend towards object storage is clear, which means this scalable solution is quickly becoming a commodity. However widespread lack of understanding about cloud and cloud economics “has mid-size companies hesitant due to cost models and lack of fully scalable storage across various platforms.”

Uncertainties also remain over the understanding of public cloud security, meaning not so much concern about hackers stealing content but more about users having the know-how to configure security.

Overall, though, whether the cloud is public, private or hybrid, the IABM finds the infrastructure continuing to move away from dedicated hardware to more virtualized edge computing.

Although AI/ML are considered mature for closed captioning, script and data generation, AI is not widely used yet for QC and surveillance of networks. The use of AI for creating short-form advertising is underway. In sports AI is being used for player and ball tracking, off-side calls, and sound mixing.

“AI chatbots must be factored into new workflows especially on the creative side,” says Zanni. “AI video creation platforms are bleeding edge and many are finding this fascinating yet not ready for prime use yet.”

READ MORE: The State of the Industry Breakfast Briefing 2023 (IABM)

The creation of deepfakes with the assistance of AI is a worry, the IABM says, citing the use of Respeecher by sound editors without first securing permission from talent.

“ML systems leveraging complex language models will continue to improve interactive chat, and automated creation of editorial content, but also SPAM, Phishing and other security threats, including the building and drop of malicious code.”

LED wall virtual production using game engines for volumetric productions is no longer considered bleeding-edge according to this study, with traditional studios quickly adopting XR within their sets and production.

There are no recent dramatic breakthroughs in image sensors with momentum towards 8K slowed due to the COVID hiatus.

Media companies must learn, understand and respect the video game world, the IABM advises, as this will help them to quickly gain newer viewers, which in turn will give them the all important brand recognition within an interactive space.

Sustainability is starting to move beyond “nice to have” toward becoming a requirement. Companies that are merely greenwashing are being called out, and hard facts are becoming a requirement as carbon footprints are becoming part of the RFP process, along with surcharges, though “there is little balance yet between the costs of sustainability vs. profits.”

READ MORE: NPAW Survey: 76% of SVoD Services To Introduce Ads in the Next Two Years (NPAW)

More than three-quarters of SVOD streamers plan to introduce ads by 2025, according to a new global B2B industry survey by video intelligence company NPAW. And nearly 60% of those will implement a hybrid model that combines an ad-supported tier alongside a premium, subscription-based one.

All of the survey respondents agree that the main driver for this shift is to lower the price of subscriptions for their viewers. Of the sample of streaming platforms surveyed for this study, 41% currently have a two-tier business model.

In second place comes free services with ads (23%), also known as the FAST model, and subscription-based with ads (22%). The traditional SVOD model, subscription-based pricing without ads, was the business model with the smallest sample representation (15%).

Overall, 85% of the companies NPAW spoke to are using ads as part of their monetization model.

Since NPAW is a provider of video analytics and business intelligence, it spends most of its survey assessing the use case for analytics.

“One of the key advantages of having full visibility into user behavior and experience is that services can identify users at risk of churn early on and address their perceived shortcomings before it’s too late,” the company explained. “This can be done by monitoring drops in usage and Quality-of-Experience issues such as buffering or latency.”

With that in mind, the survey asked respondents using third-party analytics if they used it to pinpoint at-risk users. Seventy-four percent of companies use their third-party analytics tool to identify customers at risk of churn. Eleven percent identify such users through other means, while 10% cannot do so with their tool’s information.

The most popular measurement method is with the data received from the ad server (38%) — despite 39% of companies believing that their ad server numbers are not fully reliable and accurate.

Third-party analytics tools were the most popular among a quarter or respondents, and another quarter favor a combination of these methods.

“It’s encouraging to see that more and more companies are taking a data-driven approach to running their video business, especially as the industry’s shift to ads brings a unique set of measurement challenges,” said NPAW CMO Till Sudworth. “To truly make the most of their advertising-based streaming business, video providers will need an advanced, third-party ad analytics tool — one that can help them track ad performance from an end-user perspective and correlate that information with insights about user behavior and content preferences.”

READ MORE: 2023 Digital Media Trends (Deloitte)

As streaming video competition continues to intensify, subscription growth rates across the industry have slowed — and churn rates have increased, according to Deloitte’s 17th annual Digital Media Trends report.

On average, US consumers pay $48 per month for SVODs, Deloitte’s survey found. About half of those surveyed agreed that they “pay too much” for SVOD services, while about one-third said they intend to reduce their number of entertainment subscriptions.

Around half of consumers (47%) surveyed said they have made at least one change to their entertainment subscriptions because of their current financial situation, such as canceling a paid service to save money, switching to a free ad-supported version of a service or bundling services together.

Millennials are the most likely to have made changes to digital media subscriptions due to economic pressures. Indeed, millennials spend more than any other generation on paid streaming video services — an average of $54 per month. Nearly 45% of millennials have “churned and returned” with a paid SVOD service, cancelling a paid subscription only to renew that same subscription within six months, according to Deloitte’s study.

READ MORE: Americans Spend $48 per Month on Video Streaming Services — and Half of Those Surveyed Say That’s Too Much (Variety)

The report said that watching TV shows and movies at home is no longer the dominant, “go-to” activity it once was — especially with younger generations that are more evenly dividing their entertainment time across TV shows and movies, user-generated content (UGC) on social media services, and video games. They seek entertainment, connection, immersion and utility.

Deloitte describes millennials using media via a personalized tapestry of immersive, social and vibrant experiences. SVODs, therefore, need to adopt and accelerate new strategies to reduce churn that accounts for this change in consumer behavior.

Kevin Westcott, a vice chair who leads the US Technology, Media & Telecommunications practice at Deloitte, said, “The race to continue to add customers by commissioning and acquiring really high-cost content will not succeed on its own.”

The influence of video games is illuminating. More than half of younger gamers decide to play a specific video game after watching a certain TV show or movie. About 45% of gamers said they want to play games based on their favorite movies and TV shows. More than a third of gamers say they feel better about their self-image when they’re playing video games. In addition, Deloitte said, almost half of Gen Z and millennial gamers say they socialize more in video games than in the physical world. A majority of Gen Z and millennial gamers wish more of their favorite movies and TV shows also had video game experiences.

The report said 32% of people surveyed in the US consider online experiences to be meaningful replacements for in-person experiences. For Gen Zs and Millennials, it’s 50%.

Half of consumers say UGC videos help them to discover new products or services to buy, and around 40% of consumers say they are more likely to purchase a product after they watch a creator they follow review it.

Westcott said SVOD services should invest in diversifying the content on their platforms, including considering incorporating user-generated short-form video, music and games.

“Streamers are under pressure to reinforce their core offerings, but they should also be leveraging gaming and social media, especially considering the behaviors we are seeing in younger generations. To stay competitive, SVOD providers should seriously consider how to engage broader audiences, play across diverse media properties that add value, and advance their ad platforms to better support advertisers.”

Next, Watch This

Watch the NAB Show session, “Immersive Storytelling: Expanding Audiences with XR in Games, Education, and Location-Based Entertainment” that examines the growing convergence between traditional entertainment and advanced technology and what’s next on the horizon for virtual reality (VR), augmented reality (AR) and extended reality (XR).

READ MORE: The State of Subscriptions Report (Antenna)

SVODs are experiencing tremendous volatility and we should expect more targeted acquisition strategies from the major streamers, an increased focus on pricing and packaging, and numerous moves to mitigate churn.

According to market data platform Antenna in its latest report, “The State of Subscriptions,” last year represented a turning point for premium SVODs. While total subscriptions grew substantially at 14.1% over the prior year, that rate of growth was significantly slower than 2021’s 28.9%. Worryingly, Antenna observed 117 million cancels across Premium SVODs in 2022, up 49% from the prior year.

NBCU, Paramount, and WBD were especially successful at growing their subs in 2022 taking share from Netflix and Disney although the latter two still lead the pack.

“With an increased focus on profitable growth, SVODs are becoming more aggressive in their efforts to maximize revenue, even at the expense of some topline subscriber growth,” Antenna reports.

Price increases are the most obvious example of this: Netflix, Apple TV+, Disney+, and Hulu all raised fees in 2022, and HBO Max did so this January. Paramount and NBCU also announced pricing moves in the opening months of 2023.

Intra-company bundles are another strategy to drive increased Average Revenue Per User (ARPU).

Antenna estimates that the Disney Bundle now accounts for 22% of subscriptions for Disney+, 18% for Hulu, and 60% for ESPN+. The Apple One bundle accounts for 31% of Apple TV+ subscriptions, and subscribers to the Paramount+ and Showtime bundle grew 251% in 2022.

The role of advertising continues to grow in importance to premium SVODs, as a part of their profitable growth strategies. In 2020, only one in five new sign-ups were to ad-supported plans; last year, it was nearly one in three.

The four services that have had ad-supported plans since their inception — Peacock, Hulu, Paramount+, and Discovery+ — each have at least 43% of Subscribers on the ad-supported option.

And ads are gaining ground. The proportion of 2022 Gross Adds (i.e., new customers) who selected the ad-supported option is higher than the existing subscriber base for six of the seven premium SVODs.

Owning the Customer Relationship

An increasingly important battle is the competition for the customer relationship. 53% of Gross Adds that Antenna observed in 2022 came through a distribution platform — Apple, Amazon, Roku or Google — not directly with the services themselves.

“D2C models are great for brands because they do not share margin with retailers or wholesalers, and they fully control the customer relationship. When an SVOD service wins a customer through a distribution partner, they typically share the economics, and the distribution partner controls portions of the customer data and communication (sometimes, a lot of it).”

These distribution arrangements can potentially deliver substantial incremental customers. And in environments like Amazon channels which load the services’ programming directly into their app, SVODs can save product development and upkeep costs because they do not have to operate their own proprietary app.

Antenna says, “Balancing the benefits and challenges of distributing in third-party environments is a key issue that Services will consider as they manage to profitable growth in the coming years.”

The final theme is one that Antenna think will be a defining topic for subscription marketers for years to come: customer segmentation.

There are many different approaches for segmenting consumers, but two which it believe are especially important for subscription marketers are re-subscribers and serial churners.

Re-subscribers are consumers who sign up for a service after previously cancelling it and made up 23% of all gross additions in 2022.

“Netflix has a high re-subscriber number simply because so many Americans have already subscribed to the service at some point in the past. Put another way, Netflix is running out of Americans who have never tried Netflix!“

On the other end of the spectrum, Peacock had almost no re-subscribers in 2020 because it launched in April of that year, but already by 2022, 20% of their Gross Adds were observed by Antenna to be re-subscribers.

Serial churners are those individuals frequently moving in and out of services — often to chase hit shows they want to watch at that moment.

Antenna measures them as individuals who have at least three cancels in the past two years among the 10 premium SVOD services it measures.

So by that definition, one in five Americans is a serial churner and accounted for 29% of sign-ups in 2022, up from 15% in 2020.

Netflix is seeing a particularly pronounced growth, with serial churners making up 32% of sign-ups in 2022, versus 13% in 2020.

Per Antenna, “It is crucial that services segment out these serial churners. For one thing, their survival curves are much steeper than the rest of subscribers, resulting in lower customer lifetime values. If a service is not distinguishing between these two segments, then their analysis of cost of acquisition will be misleading.”

While changing macroeconomic conditions have played a factor in all these changes, the adjustment is also suitable in the context of a more mature market and a more fickle – or more sophisticated — consumer.

READ MORE: The Big Shift – Wave II (LG Ad Solutions)

Viewers take almost six minutes on average to select a piece of content to watch after turning on the TV, according to new research.

The results show that, even when viewers do know what they want to watch, 40% are still confused about where to find it because of the number of different streaming TV options available.

READ MORE: 40% of consumers confused about where to find content they want to watch (Fierce Video)

The new findings are from LG Ad Solutions, based on a survey of more than 750 US consumers in March 2023, seeking to determine consumer perceptions and behavior related to CTV.

Being a CTV ad sales company, LG Ad Solutions turns this into an opportunity. With an average 5.7 minutes spent between turning on the TV and watching content this represents a chance for service providers to advertise new programming in a contextually relevant environment, the company says.

READ MORE: U.S. Households Spend An Average of 5.7 Minutes Deciding What To Watch on Streaming Television (LG Ad Solutions)

Tony Marlow, CMO of LG Ad Solutions, commented, “Our data indicates that 39% of viewers have used recommendations from their TV’s homepage when they’re looking for something new to watch — and we anticipate that number to increase as Smart TV adoption continues to climb. The home screen is the new center of the CTV experience where consumers can search for specific content, and find recommendations when they aren’t sure what they want to watch.”

Being a CTV solutions company, the report naturally underlines the drift from linear TV and subscription streamers towards free and ad-supported on-demand content.

Per the survey, a fifth of viewers say they are watching less linear cable and satellite TV than 12 months ago. The reasons being: exclusive content only available on streaming; ability to watch major network shows on demand; alternative free ad-supported channels with curated content focused on specific genres; and major sports events like the Super Bowl and March Madness now available via streaming.

With 46% of respondents (extrapolated to approximately half of the US TV viewing audience) reporting they had cancelled a streaming service citing economic concerns, more and more are turning to free streaming services.

What’s more those free services are overwhelmingly likely to be watched on the main Connected TV. LG states that 93% of US internet users are reachable by CTV. “Any advertising plan that doesn’t include CTV is missing out on valuable opportunities to connect with consumers,” it says.

After rapid adoption of streaming content on CTV, fueled in-part by stay-at-home guidance at the onset of the pandemic, a second “big shift” is now underway.

“Consumers are drifting away from some of their CTV subscriptions and increasingly preferring free content that is supported by ads,” Marlow said.

The survey reinforces several trends from other recent studies. This includes SVOD starting to offer free and reduced subscription options as a way to entice viewers to stay on the platform and viewer confusion about where to find content given the multiplicity of choice (nearly half of US TV viewers feel overwhelmed by the amount of content choices available to them). The survey repeats the suggestion that viewers share a stronger affinity towards specific content rather than the streaming platform itself.

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READ MORE: Haivision Unveils 2023 Broadcast Transformation Report (Haivision)

Enabling remote production and transitioning to IP are the top investment priorities for broadcasters, this year, according to Haivision’s latest Broadcast Transformation Report.

The report was culled from 700 broadcast and media professionals around the world.

More than half of respondents put remote and IP transition at the top of their agenda and over half of those surveyed already use IP infrastructure.

Also of note is that 45% of broadcast professionals work for organizations that are actively working on developing sustainability strategies or already have sustainability plans in place.

To our minds that doesn’t seem nearly enough for what should be the issue driving all technology and organizational policies in any media company.

Cloud has become an integral element to broadcast workflows, but it is clear that on-premise technology remains critical. Haivision found that despite 84% of broadcasters stating their use of at least some cloud-based technology in their workflows, 60% rely on cloud for less than a quarter of their workflows.

Meanwhile 5G is a key enabler for the vast majority (73%) of those surveyed although the degree of its actual or planned use is not teased out by this survey.

“After diving into this year’s survey findings, it’s clear that in order to deliver engaging, high-quality content for audiences around the world, broadcasters must meaningfully engage with new technologies such as 5G, cloud, and IP,” said Marcus Schioler, VP of Marketing at Haivision.

“Next-gen technology offers true potential for production teams to effectively achieve broadcast objectives through faster and more efficient means. And, as cloud and 5G innovation continues, we anticipate the many benefits these technologies will bring to live broadcast workflows.”

That said the use of the internet to transport live video for contribution is booming. That would hardly be a surprise in a report from a vendor of encoding solutions and leader of the SRT pack. In fact, 86% use internet, with 3G/4G/LTE taking second place.

“As the internet becomes more popular in its use for video contribution, other elements of the broadcast workflow must follow suit. As a result, 68% of respondents use SRT for live video transport, overtaking RTMP.”

READ MORE: Streaming in Flux (TV Rev)

Streaming is now a vital part of nearly all Americans’ content diets. Yet, what viewers choose to watch, and where, differs greatly based on age.

According to the latest report from Publishers Clearing House Consumer Insights and analyst Evan Shapiro looks at recent American viewing habits. Based on responses from 16,650 consumers gathered in February, the report finds a substantial bifurcation of TV consumption along generational lines. Life experience — how we were raised to watch TV — still seems to influence how we consume TV now.

“For those under 45, streaming culture — bingeing, cancelling after a binge, streaming content for free — are TV norms,” Shapiro says. “Those over 45 years of age maintain many of the habits they had when choice and viewer control were not so abundant.”

Digging deeper: 40% of viewers under 45 say bingeing is their preferred way to watch series. Consumers older than 45 are most likely to choose their viewing method based on the show.

These habits seem to correlate to the number of services each group has: the younger a subscriber, the more services they subscribe to.

Forty-three per cent of Americans under 45 have three or more streaming TV subscriptions, while more Americans over 45 have zero premium paid streaming services (32%) than have three (31%).

Sixty-eight percent of consumers over 45 and 78% of those under 45 have one or more paid streaming services, leading Shapiro to conclude, “Paying for streaming TV is now normal entertainment behavior at all ends of the demographic spectrum.”

However, so is churning.

Forty percent of younger streamers say they occasionally or regularly sign up for a service for a specific show or movie, watch that content, and cancel before the next billing cycle. More than a quarter of older Americans also say they also participate in serial churning.

Movies remain the content genre subscribers value most. Together with premium episodic shows, these two content genres determine a large portion of subscription decisions.

That’s not to say that kids programming and live sports aren’t important, with around 15% of subscribers to each genre likely to be more loyal to their service provider.

According to this survey, Disney tops the chart of domestic streaming popularity, largely helped by Hulu, beating both Netflix and YouTube to take the crown.

Warner Brothers Discovery is in the elite tier, right on Amazon’s heels, and the combined Paramount+/Pluto TV is another streaming giant.

When it comes to free streaming services, this survey suggests that Tubi, Roku Channel and Pluto TV “appear to be reaching critical mass among younger viewers,” yet all are more popular than notable paid services like AppleTV+, ESPN+ and Discovery+.

Free streaming is now the top TV choice with consumers under 45, and second only to cable TV among viewers over 45. It is YouTube which is far and away the leading free video platform “quickly becoming the go-to channel on CTV for all ages.”

Shapiro writes, “What this data does makes clear is that subscribers are getting pickier, and nimbler in their leaps from one service to another. Bingeing has generated a growing wave serial churn, and the changing economics of entertainment have given consumers a vast content smorgasbord, which they are actively sampling.

“It is also clear that older audiences and younger see their content consumption and platform choices quite differently — at least for now. To keep customers from serial churning, platforms and publishers should respond with pricing and packaging flexible enough to serve all ages.”

LEARN MORE AT NAB SHOW: Creator Squared Sessions at NAB Show

READ MORE: The Creator Economy — Getting Creative and Growing (Citi GPS)

The burgeoning creator economy — of content creators monetizing their content directly with fans — is estimated to be worth $75 billion by next year and has caught the attention of big finance.

The findings of banking group Citi may not be revelatory but the fact that conventional finance has charted the market lends weight to arguments made by Web3 exponents that change in the distribution of labor and reward is afoot.

In its report, “The Creator Economy — Getting Creative and Growing (Citi GPS),” Citi calculates there are over 120 million content creators worldwide and expects 9% growth per year through 2024.

Estimating the figure is challenging due to platform overlap. For example, a gamer that creates a live stream on Twitch may also have a YouTube channel and a Patreon account. And some YouTube channels are associated with traditional media firms (like a film or a blockbuster video game).

However, even with these complexities, there are stark differences between platforms. Citi estimates YouTube has nearly 100 million channels (excluding traditional media). Roblox has about 10 million developers. Etsy has about four million sellers. There are currently more than four million podcasts. At the other end of the spectrum, Substack only has a few thousand writers.

Around half of the revenue stems from ad-based video platforms, like YouTube. The other half is spread across a wide array of industries: publishing, education and podcasting, among others. Platforms charge fees that can vary from less than 10% of creator’s revenues (Patreon, Spotify and Unity) to as high as 85% (Roblox). Citi thinks the variance often depends on the value the platform provides across five functions, which it identifies as creation, hosting, distribution/promotion, and monetization. The more functions these platforms perform, the higher the fees.

The lion’s share of the revenue is captured by a very small portion of the content creators. Far more than 80% of the revenue is created by far less than 20% of the creators.

How much can a creator make in net revenue after paying fees to the various platforms varies considerably. The report suggests that a writer for Substack generates, on average, $25,000 per year. The average creator that uses Patreon generates $6,000 per year. At the other end of the spectrum, a developer that creates items for Roblox generates, on average, just $50 per year.

Citi concludes that a creator’s average net revenue is inversely proportional to the number of creators that use the platform. That is, while Substack writers generate the most net revenue, the platform has very few writers. YouTube is at the other extreme. While there are many creators on YouTube, the average net revenue per creator is quite modest. Revenue per creator on the other platforms — Etsy, Twitch or Roblox — falls in between.

Going forward, the bank highlights three areas worth watching.

First, traditional social media firms may begin to share some of the spoils with content creators. That is, platforms like Twitter may begin to emulate YouTube’s business model. Or, as Instagram and Facebook push further into e-commerce, they will create opportunities for content creators to share in the economic spoils.

Second, Web3 tools — like blockchain and crypto — will allow consumers to finance, own, and trade content rather than simply paying creators to consume it.

Digital wallets are one way that new Web3 tools can help creators with monetization. Using a subscription model linked to a digital wallet, readers can access creator content stored on a decentralized storage layer. The subscription paves the way for creators to build a wallet-based community that enables far richer engagement than passive consumption more common with Web2 tools.

“Whether these new tools will be embraced by legacy creator economy platforms or new platforms remains to be seen. But, Web 3.0 tools will certainly result in new innovations that are apt to benefit creators and consumers alike.”

Third, artificial intelligence may alter the creator economy in several ways including by helping with content creation, helping brands find the right influencer or helping consumers find the right content.

“We expect AI to be used to help bring some order to the highly fragmented creator economy ecosystem. For example, AI will likely be used to help consumers find the right content and can also be used to help brands find the right influencer.”

READ MORE: 2023 Evolution of Video Branding (Hub)

The vast sums expended on marketing during the streaming wars have been effective: all the major platforms have brand awareness above 90 percent. But brand understanding is another matter: far fewer feel confident that they could explain to someone else what each platform does best, or how it’s different from the others.

That’s the chief takeaway from Hub’s 2023 “Evolution of Video Branding” report, which surveyed 2,400 US broadband users between the ages of ages 16-74 who watch at least one hour of TV per week. All things being equal, it is content that differentiates one streaming service from another in the minds of wallet-conscious viewers.

Take Apple, a master at branding: almost all respondents to the survey are aware of Apple TV+, but fewer than half feel they understand the value proposition.

“In the end consumers are choosing between a well-known set of brands, without a clear understanding of what differentiates them,” finds David Tice, senior consultant to Hub and co-author of the study.

Without a clear understanding of the difference between platforms, consumers are turning to other guideposts, such as program brands. Per the survey: 41% of viewers say they have signed up for a platform just to watch one specific show (up from 35% just two years ago).

This is even more pronounced among key audience segments such as young people: 57% of those ages 16-34 have signed up just to watch one particular show.

When lost in a sea of content, viewers look for what’s familiar: New shows based on familiar characters or histories have a leg up in the discovery process.

Forty percent of Hub survey respondents said they would be more likely to watch a new show based on the Marvel universe (the highest percentage of the 10 brands it tested.)

But the next three-highest were broadcast TV procedurals that have already had successful spinoffs.

Another example is the Yellowstone franchise. Among respondents who had ever watched Yellowstone, almost three-quarters also watched at least one of Sheridan’s other shows (1883, 1923, Tulsa King, or Mayor of Kingstown).

Perhaps most notably, viewers had to put in some effort to watch these: Yellowstone is only on the Paramount cable network and on Peacock, while the other shows are only available on Paramount+.

“Viewers have not lacked in choice of services and content over the past few years,” Tice added. “But this can be a two-edged sword for content providers, as the immense volume just makes it hard for viewers to remember what is different about each service. But at the end of the day, content is king, and unique content will drive viewers even if the service itself isn’t unique to consumers.”

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READ MORE: Audience Attention Myths & Facts Report (TVision)

Think that cord-cutters are primarily younger viewers? In fact, most cord-cutters within the last six months are 35-49 years old.

This is one of a dozen insights from TV data gathering and analysis company TVision, which sets them all out in a new report.

The report’s data was collected from an opt-in panel of 5,000 homes across the United States. The company says that every time a person walks into the room, its technology detects who the viewer is, where they are in the room, and what their eyes are looking at.

In other words, there are things in its data that could provide a more accurate picture of who is watching what, when and for how long rather than other ratings or ad impressions data.

Other “myths” the agency seeks to bust include the following:

That young people only watch CTV. TVision’s data suggests younger viewers are more likely to tune in to CTV, but also tune into linear.

That older viewers watch more TV. In fact, Baby Boomers spend the most time watching TV overall, but Millennials tie with these older viewers for CTV.

While it is true that men are more likely to watch sports, this gender divide is less prevalent among younger ages. Although women are generally more likely to tune in to reality TV.

It’s widely thought that when there are more viewers in the room, people pay less attention to ads on TV. TVision has quantified this, suggesting that co-viewing doesn’t have a major impact on attention until there are more than three people in the room.

The report also examines assumptions by marketers when media planning. For example, too many showings of the same ad reduces its effectiveness, right? Attention increases with additional exposures, finds TVision, but it takes 6-10 exposures for shorter ads to “wear in” with linear viewers.

Shorter ads are found to retain attention for a greater portion of the creative, potentially lowering their cost-the-cost per attentive second.

And is the Super Bowl really the best media opportunity of the year? The event may have the highest reach among all major TV events, but TVision data points to viewers of other events being more attentive.

“Between the rapid adoption of CTV and calls for more reliable currencies, the way we watch and measure TV is radically different from even just a few years ago,” the report states. “With that in mind, it’s essential that marketers challenge previously held assumptions about who their audiences are, where to reach them, and how they engage. After all, many of these may no longer be true. And even if they are, there may be new nuances that merit a closer look.”

READ MORE: Sustainability in Video Entertainment (Interdigital)

The chief culprit of carbon emissions is widely thought to be the airline industry but a new white paper suggests that global video entertainment is actually worse for the planet.

An average day of filming generates more than one person’s annual carbon footprint, claims a new whitepaper investigating sustainability in video entertainment. An average hour filming is equivalent to the carbon footprint of a return flight from London to New York, it reveals.

The white paper, “Sustainability in Video Entertainment,” released by InterDigital and written by Futuresource Consulting, explores the reasons why the video entertainment industry must lead on positive climate action, set higher standards when it comes to energy efficiency, and integrate solutions that mitigate energy consumption across the video chain.

The carbon footprint for production is immense. Even medium-sized films have an average carbon footprint of 769 metric tons of CO2e, with large films generating creating 1,081 metric tons per production.

In addition to reducing material waste and promoting recycling on set, there are many more approaches that film production can adopt to make the process more sustainable.

Accurate measurement of one’s carbon footprint is a crucial component and certification from BAFTA’s Albert, EcoProd’s Carbon Clap initiative, the Production Guild of America, and the Digital Production Partnership (DPP), among others, helps encourage people in the video industry to make a positive change. However, the reports notes, there are still no standardized measurement, which creates difficulties in creating a holistic approach to calculate carbon emissions across the industry overall.

Another way of cutting down on production carbon output is to use virtual production. One study quoted in the paper discovered that filming vehicle shoots in virtual production could reduce CO2 emissions by between 85% and 90% compared to conventional filming.

The move towards more sustainable film and TV production has accelerated a transition to cloud-native workflows. That’s an improvement since cloud technology consumes 20% of the energy footprint of on-premises data centers if running the same workload, per the report.

Live broadcasting has made efforts to become more sustainable — such as remote working — but more needs to be done. The highly expensive carbon footprints of OB trucks can be offset if the industry moves towards more modular solutions. This means provisioning only the equipment needed for specific broadcasts, reducing energy needed for transporting and generating it all onsite.

OB trucks can also achieve greater flexibility by using IP networks, by using electricity or biofuels, rechargeable battery units or simply being EVs.

However, it is the delivery/consumption component of video entertainment that seems to burn the most energy.

More than a billion hours of content is consumed on a single streaming platform every single day, the white paper states, and as a consequence the video streaming industry’s annual carbon footprint now exceeds that of the airline industry.

Meanwhile, global TV energy usage alone could increase 5% by 2026 as consumers upgrade to higher resolution screens and transition to 4K HDR video.

According to the white paper, the carbon footprint of streaming video depends heavily on how data centers source their electricity, and how efficiently they run servers and networking equipment, which in turn contributes toward CO2 emissions.

“With more investment in renewable energy to power data centers, the environmental impact of video streaming isn’t growing as fast as it was previously,” says Simon Forrest, principal technology analyst at Futuresource Consulting. “However, more must be done; it is increasingly likely that the efficiency gains of current technologies may be unable to keep pace with growing data demand. To reduce the risk of rising energy use and emissions, investments in efficient next-generation computing and communications technologies are needed, alongside continued efforts to decarbonize the electricity supply.”

The paper contends that energy-aware streaming protocols promise more than 50% in energy savings per hour of content.

VISIT OUR DEDICATED SUSTAINABILITY MICROSITE.

READ MORE: Inaugural Video Production Workflow Report 2022-2023 (Shift Media)

Remote from anywhere practices and technologies adopted at scale during 2019-2022 have now been cemented into the industry. A new report confirms that workflow efficiencies are a key reason for film and TV productions to use online collaboration tools over that of in-person office/suite meetings for an increasing amount of pre- and post-production work.

The inaugural Video Production Workflow report by collaboration tools vendor Shift Media surveyed postproduction pros about changes in their work habits.

The report found that the physical presence of personnel from all departments is still being limited post-pandemic:

“In the years since the initial pandemic lockdown, processes that at first took hours have been streamlined to minimize errors and quickly get review and approval from all stakeholders.”

While production teams have adapted to having fewer people on hand during production, this means depending on more tools for video conferencing, virtual interviews, and sometimes shipping equipment. It can sometimes mean relying on talent to record themselves while DPs guide the production remotely, the report notes.

The report also finds that production teams have become accustomed to going into a show remotely using high-quality cameras connected to platforms like ScreenFlow (from Telestream), allowing for high-quality capture.

Actors and interviewees have learned to prepare their locations for filming with props or set design, so they are camera-ready, then share footage for review and approval via links.

According to Shift Media, post supervisors and editors find it more convenient and cost-effective to work from home, without depending on a super extensive infrastructure or office to get the work done.

Further, clients and directors “trust the post-production process more every day,” using technology to their advantage, shortening review time by getting videos directly on their phones and computers, and allowing them to watch and provide feedback anytime, anywhere.

As an unnamed executive producer commented to the survey, “The biggest difference is that there are [fewer] people during shooting, which has both positive and negative aspects. There’s more focus on pre, and that’s good. There’s tougher work in post, and that’s bad.”

Platforms that allow reviewers to comment on rough cuts frame by frame to minimize the back-and-forth during approvals and reliably share large files securely and quickly have made remote post work much easier.

Recent changes have also helped create an industry that’s more flexible to the various needs of filmmaking teams, with many finding talent from other continents who obviously wouldn’t be able to come to an office.

One VFX supervisor quoted in the report says, “All of us have our own edit suites and production suites at home now. There will never be a need to put us all together in one building or office. Also, we have started handling clients from all over the world. They don’t care where we are working, just as long as we complete the work.”

All of this is positive, but limiting in-person meetings does come with some challenges.

Per the report, “critical conversations are taking place virtually, increasing the reliance on video sharing and collaboration platforms to share files and review animatics vital to navigating remote workflow.”

Difficulty capturing sound and dubbing has continued to cause frustration for some, requiring additional spotting sessions and pickups.

This new production process often leads to longer days and increased security measures.

READ MORE: New TiVo Video Trends Report (TiVo)

Consumers are so overwhelmed by the choices of content that discovering it has actually become a bigger headache than paying for it.

A new Video Trends Report from TiVo also finds that a majority of North Americans say they have too many services in their bundle and that the rate of change at which content jumps in and out is outright damaging to their overall viewing experience.

“We’re at an inflection point in the digital entertainment industry as consumers seek to take advantage of the flood of content choices and service types available, but now wrestle with the paradox of choice,” explains Scott Maddux, VP of global content strategy and business at TiVo owner Xperi.

READ MORE: Number of Video Services Used By Consumers Surpasses Double-Digits for First-Time, TiVo Video Trends Report Finds (Xperi)

While SVOD use has declined by more than a quarter in the last six months, the average number of video services used by consumers has grown, with free and ad-supported streaming becoming the beneficiaries. Per the report, consumers source their video viewing from an average of 11.6 services up from 8.9 a year ago.

Adoption of totally free video services, including AVOD and FAST, has grown by almost 70% year over year. Some 64% of consumers now use at least one AVOD or FAST service, driven largely by millennials, up from 60% a year ago.

Subscribers to pay-TV use a significantly higher number of sources on average, at 12.7, compared to an average of 8.3 services for broadband-only respondents (i.e., cord-cutters).

Video choices in this report range from broadcast TV and “virtual multichannel video programming distributors” (vMVPDs) such as YouTube, Pluto TV, and Sling to social media apps and AVOD.

The number of choices may benefit consumers, but it has led to content discovery becoming even more complex and varied. Frustration is boiling over. It is not only about having too many options to juggle and not being able to find suitable content quickly, it is also expressed in how frequently movies and TV shows appear and disappear (or shift from free to pay) on the services they subscribe to.

Right now, almost half of survey respondents find new TV shows and movies by word of mouth (47.9%) or through ads seen on other shows they watch (46.5%). From there, just over a third (35.6%) turn to social media, and about a third (32.2%) rely on display ads on the home screen of online video services. Suggestions in “my TV channel guide or other menus” is cited by just over a quarter (27.1%) of those surveyed, and more than half (55.9%) of those who follow recommendations to find content say they’re satisfied with the suggestions.

Some people are willing to “actively teach” a streaming service about their preferences to get better recommendations. Pay-TV subscribers are more likely to do so (60.3%), compared to broadband-only subscribers (47%).

Spend on Video Continues to Rise

The bigger picture for video entertainment providers is that despite the cost of living crisis, demand for content remains a “moderate to high priority” for most people. Overall spending on entertainment has actually increased to $189.38 per month. This is up almost $20 from a year ago.

While some (17%) respondents appear to be evaluating and adjusting their entertainment spending more often, and more than 30% claim that the wider cost of living has caused them to reduce overall entertainment spend, a massive 84.8% say they have no plan to reduce their entertainment spend or don’t know whether or not they will reduce their entertainment spending.

Much of this spend is being focused in the home and on the home TV. To support this, respondents to TiVo’s report says they are investing in their home setup, with one-third purchasing a new TV in the last six months.

Additional interesting information from the Video Trend Report:

More than half of people (53%) prefer to binge watch a whole season of a TV show when all episodes are dopped at once, compared to 24.7% who prefer episodes to be released once a week.

Fewer than half of respondents cite pay-TV as their primary way of watching local content, the first time this has dipped below 50% in a TiVo survey.

READ MORE: Quantitative study of the GHG emissions of delivering TV content (LoCaT Project)

Good, old over-the-air broadcast TV is greener than streaming, finds new research drawing on data from across Europe.

The LoCaT Project’s report, “Quantitative study of the GHG emissions of delivering TV content,” concludes that energy consumption and associated emissions of Digital Terrestrial Television (DTT) are “an order of magnitude lower” than estimates for OTT and managed IPTV.

This is true today — and in the future, the report states.

Its findings chime with that of a recent InterDigital and Futuresource report, which found that the carbon footprint of the video entertainment industry has ballooned to exceed even that of the airline industry. The report also aligns with recent studies by the Carbon Trust and the BBC.

READ MORE: New white paper examines the innovative solutions ushering the video entertainment industry towards a more sustainable future (Interdigital)

READ MORE: The carbon impact of streaming: an update on BBC TV’s energy footprint (BBC)

The LoCaT report focused just on TV delivery, not content creation, and aimed to compare the greenhouse gas (GHG) emissions associated with serving TV content across different platforms.

It analyzed all 27 EU countries plus the UK in 2020, and estimated that the energy consumption associated with one device viewing hour of DTT was 14Wh compared to 109Wh for OTT and 153Wh for managed IPTV. This equated to 3 grams of CO2 equivalent emissions (CO2e) for DTT, 26 grams CO2e for OTT, and 37 grams CO2e for IPTV.

This only considered viewing hours on TV sets, and excluded the energy consumption of the television itself. Excluding TV sets — assumed to be the same for each delivery method — enhanced the comparisons.

The pattern was found to be the case across all countries, but the reduction in emissions is most pronounced in countries with higher DTT penetration. Additionally, differences between countries relate to national energy infrastructure For example, overall emissions were lower in France and Sweden than EU28 averages due to electricity grids in these countries being less dependent on fossil fuels.

The LoCaT report explains that DTT viewership consumption is more energy efficient due to its simplicity. “DTT efficiency is due to most DTT households using a passive aerial connection to access the network, usually with a direct connection to TV sets without the need for peripherals. This is in contrast to managed IPTV that requires using a share of the in-home modem-router and — currently across European markets — a set-top box to decode content and offer additional features such as OTT apps.”

The authors stress that there is “inherent uncertainty” in their modeling noting that this is especially the case for in-home peripheral, as well as network modeling, where there is limited data at the country level.

Data from ISPs on the energy consumption of their networks, as well as the implications of increased demands on their network, would be a valuable contribution to the analysis, the report suggests.

It is also expected that video streaming organizations and broadcasters will have a detailed knowledge of their own audience, including their viewing time and choice of devices. This may impact on the estimates of energy consumption per viewing hour and could provide more accurate figures than the country-level average estimates produced here.

Consequently, the LoCaT Project calls for a common methodology to allow companies to benchmark against each other, and to provide a streamlined way to report these estimates to their stakeholders.

Primary data was drawn from LoCaT Project sponsors including Broadcast Networks Europe (BNE) — the trade organization of DTT network operators in Europe, French content delivery technology provider Quadrille, and French streaming platform Salto.

The report, compiled and written by management consultancy Carnstone, also used market research published by organizations such as European Audiovisual Observatory, BARB, Ofcom, and the European Broadcasting Union to understand TV viewing behavior across Europe.

READ MORE: Increasing Cost Consciousness: An Industry Snapshot (MediaSilo)

WATCH THIS: Increasing Cost Consciousness: How to Maximize Efficiency While Decreasing Cost

The media and entertainment industry is being reconfigured into an economic model that more closely matches actual consumption and spend. With that in mind, the recent run of projects cancellations, staff cuts, and production spending curtailed should be seen as more temporary dip than long-term decline.

“While we don’t want to gloss over the sobering facts, it’s important to note that they’re not a death knell for the industry but rather another pressure point when considering how you’re deploying budget,” says Michael Kammes, senior director of innovation for MediaSilo.

The storage and collaborative workflow technology vendor has dissected and analyzed industry data and come up with a snapshot of spend that it says indicates increasing cost consciousness. Watch the full webinar here.

Overall production in film, TV and commercials saw a decline of nearly a quarter in Q4 2022 compared to a year earlier. TV saw the biggest drop of 24.2% year-on-year. The final quarter of 2022 saw a stark drop in production days of television to 3,733 from 4,925 in Q4 2021. Unscripted shows didn’t see the same drastic drop, but MediaSilo notes that this content is also cheaper to produce and therefore under less pressure when considering spend.

“The main takeaway is this is a regression to the mean. The back half of 2020 and all of 2021 and really the first quarter of 2022 was an anomaly and a great anomaly when it comes to the projects that we’re worked on, the money that was being spent.”

The company reports a drop of 16.2% in feature films (Q4 2021-Q4 2022), which is less of a drop, but notes that there are far fewer films than television shows produced overall. Commercial production saw the most significant drop of 33.7% in the same period.

Meanwhile the media industry saw nearly 4,000 jobs slashed in 2022.

Even the games industry is not immune to budget cuts. While downloaded and boxed PC games grew by 1.8%, the broader industry dropped 4.3% between 2021 and 2022.

“While this information does not illustrate a rosy picture, it’s important to note that 2021 was an anomaly,” says Kammes. “We see 2022 as a corrective year following the market’s two years of lockdown-fuelled growth, and while the numbers aren’t great, the projections and views in the industry are not as dire as we may think.”

The company cites recent multimillion dollar deals for content signed at Sundance by Netflix ($20 million for Fair Play) and by Apple ($25 million for Flora and Son).

“The main takeaway is that the changes we’re seeing are a regression to the mean,” says Kammes. “The industry is being reconfigured in a way that actually matches spend and consumption. But commerce is still happening, and global content expenditure is projected to increase by 2% over the next year.”

READ MORE: Optimizing Video: Enhancing Content Performance for OTT Success (Parks Associates)

Ad-supported streaming services are the future of video consumption, finds the latest report by Parks Associates, as OTT and traditional linear TV merge with the rise of FAST services.

The white paper, “Optimizing Video: Enhancing Content Performance for OTT Success,” also says that streaming is giving niche content providers a platform to reach millions of consumers.

“As consumers continue to move away from traditional pay TV services, they will first seek out options to watch the content they want in ways they are accustomed to—a relaxed, lean back experience,” says report author and Sr. Contributing Analyst, Parks Associates, Thomas Schaeffer. “While most would say that they would prefer not to see ads, many are willing to accept them in exchange for free or lower-priced options.”

Some 87% of US internet households now subscribe to one or more streaming video services, and 20% subscribe to eight or more OTT services, the report finds.

This represents substantial growth compared to five years ago. However, competition is fierce. There are over 300 OTT video services in the US alone, in addition to thousands of FAST channels.

Content sellers and video services are experimenting with new ways to attract and retain subscribers, as well as introducing hybrid business models and partnerships.

Rise of Niche

Niche services, such as Shudder, PokerGO and Curiosity Stream, are seeing a “significant opportunity” to compete as consumers become less loyal to media brands when adding and removing services to accommodate their viewing habits.

Recently, mainstream media organizations have launched niche offerings. TelevisaUnivision’s ViX Spanish-language service, for example, is currently distributed through a variety of partners such as Prime Video, Roku, LG, DISH TV and SLING TV.

“Ad-supported streaming, particularly FAST linear channels, can be used to distribute content that has relatively limited audience appeal, and could never justify its own channel on traditional broadcast or pay TV,” says Schaeffer.

Examples include Dogs 24/7 and Cats 24/7 on Pluto TV and NHRA (National Hot Rod Association) TV on Tubi and The Roku Channel.

• FAST TV and SVOD Are “Channeling” the Cable Business Model
• SVOD vs. AVOD Today, All Connected TV Tomorrow
• Ways Pay TV Operators Can Win the SVOD Game

Per Parks: Advertising rates for these niche channels are likely lower due to smaller audience size, but they can allow content owners to generate some revenue rather than no revenue for content that might otherwise languish in a vault somewhere.

Content continues to be a key driver for subscriptions, with 48% of consumers referencing content availability as the primary reason for subscribing to an additional service.

Further, it is content variety and relevancy which Parks finds are the primary triggers for signing up for and cancelling services — but price is now a much more significant factor.

“Except for Netflix and Prime Video, consumers are likely to churn if the content library isn’t engaging or relevant and prefer services that offer content across a wide range of genres,” writes Schaeffer.

Elsewhere the report says that outside of Netflix, which carries an average subscription length of 48 months, nearly half of OTT subscribers are hopping from one service to the next multiple times over a 12-month period.

With OTT video advertising expected to reach $119 billion in 2023 much is at stake, with most of it riding on a service’s ability to understand and predict viewer behavior and content engagement.

Parks highlights the need for subscriber engagement data as an increasingly valuable asset for media organizations to assess, demonstrate, and predict the value of a service’s catalog.

“The ability to validate content performance enables content sellers and streaming services to buy and sell a greater variety of licensed content, optimize pricing, and satisfy audience demand.”

The report also forecasts that subscription revenue for OTT services in the US will increase from $34 billion in 2021 to over $46 billion in 2026.

READ MORE: The DPP 2023 Predictions (DPP)

Although executives will be focused on organizational effectiveness and responsiveness to market conditions, the turbulence of the market is set to be what we remember most from 2023, according to a new report from broadcasting trade association the Digital Production Partnership.

“The DPP 2023 Predictions” report contains eight business-focused projections.

After market disruption, the report showed that execs believe monetizing content, efficiency, and automation will shape the next year. They also see companies such as theirs diversifying their content monetization channels and that businesses will focus more on their core strengths. The latter was retained from 2022, a reflection, said the DPP, of this year’s discussions of transformation, cost savings and organizational change. Automation-augmented operations will also likely enable scale.

There was considerable caution about the speed of adoption of the latest AI technology such as ChatGPT. Existing regulatory frameworks, and concerns about accuracy, provenance, plagiarism and privacy would provide a brake — just as data regulations are already placing constraints on advanced advertising.

For most contributors to the report, the expectation was that it will be more mundane forms of automation that will have greater impact in the year ahead. This includes the use of AI in subtitling and automated promo generation as two main priorities for this year, especially where scale is needed.

Per the report, one of the outcomes of the current cost-of-living crisis and inflation is that the cost of employing staff will go up. As a result, the report expects a move towards automation systems that reduce the reliance on people, and that have a direct cost benefit.

“The prediction that ‘There will be market disruption and consolidation,’ which had only been fifth in the 2022 predictions, suddenly rose to the top this year,” said DPP CEO Mark Harrison. “In the impact ranking of DPP Predictions it is unusual for one prediction to emerge much more strongly than the others, so the huge impact assigned to market disruption and consolidation is highly significant.”

The issue of sustainability is also front of mind — when attached to cost saving benefits. The lesson here is, carbon reduction can be incentivized if solutions can be linked to financial gain.

As one anonymous respondent told the DPP, 2023 is the year where we’re finally going to have an adult conversation about how we deliver environmental sustainability in an economically sustainable way, “because to date we’ve paid lip service to it. We’ve been ticking the box of sustainability.”

The only way to move beyond that into actually delivering real change is by focusing on actions that have an economic impact, and the environmental impact will come along with that.

Another executive added, “We do a lot around sustainability but it always comes down to the economics. So there’s a TCO for sustainability that’s being weighed heavily in decisions. And that’s really just started in the last quarter or two, I’d say.”