Fresh off of a successful Consumer Electronics Show and the announcement of the acquisition of DivX, the brains at NeuLion have put together an outlook for the coming year. You can access the full presentation here, but if your attention span is a little shorter, here are five highlights that I believe are particularly noteworthy:
- Content is going direct to consumers: Content owners like CBS, HBO and ESPN are moving to launch direct-to-consumer services driven by changing consumer behavior (more content is being viewed via online streaming and linear TV viewing is down). Media companies are able to develop one-on-one relationships with viewers, acquire more data and customize new revenue streams
- The industry is all in on 4K: 11.6 million 4K (ultra-high definition) enabled devices shipped in 2014 – up 700% year-over-year. By 2018, 4K devices are forecast to represent 38% of the market. Major OTT content providers are beginning to offer content to subscribers.
- Multi-platform content delivery is still king: Multi-platform delivery was the most important item on Devoncroft’s Big Broadcast Survey (4K was number four). Accelerating sales of connected devices illustrates this tend: Smart TVs overtook sales of non-connected TVs in 2014. Second gen XBOX and Play Station sales are well ahead of the last generation of consoles at the same point in their life cycle. Phablet sales outpaced laptop sales in 2014 and will outpace tablet sales in 2015. All this to say, the big players are all betting on a multi-device UX optimized for mobile accessibility.
- International market content consumption is outpacing the USA: Global online TV and video revenues will surpass $42B USD in 2020, up from $19.3B USD in 2014. While the US remains the dominant OTT TV territory, its share of total revenues is forecast to decline from 59% in 2010 to 37% in 2020.
- Global SVOD / PPV revenues will soar: Online TV and video subscription revenues will climb from $1.06B in 2010 to $7.65B in 2014 and onto $16.77B in 2020. The purchase of physical media and digital downloads are both declining as consumers become increasingly comfortable with renting content by paying for access to subscription services.
We are seeing a watershed moment in the history of TV and video content. The shifting to internet TV is akin to when TV overtook radio, and then later when cable overtook broadcast. Is your content ready to capitalize on this new world?