These are more complicated questions than they seem.
The ever-increasing volume of VOD content and the need for daily asset checks and reviews create challenges for content providers, not to mention the need for visibility across the entire video delivery chain.
According to recent data from Canoe Ventures, which “performs service assurance for video on demand (VOD) dynamic ad insertion (DAI) on multiple video platforms including set-top-box, IP, and mobile across its 38 million US household[s],” ad views on VOD content within their ecosystems have grown from 6.3 billion in 2014 to over 26 billion in 2020.
These are big numbers but they only tell part of the VOD story.
A report from Fortune Business Insights places the dollar value of the global VOD business at just under $54 billion, with growth projected to almost $160 billion by 2027 and the US market valued at nearly $20 billion in 2019. If growth rate estimates of 14% for 2020 and 2021 held fast, that puts the current US VOD market (aVOD, sVOD and tVOD combined) at somewhere around the $26 billion mark. I suspect this number may be conservative given the impact of Covid-19 on entertainment habits in the US and globally.
In fact, the report was prescient in its assertion in 2019 that a decrease in window between theatrical release of a movie and its availability on an SVOD service was likely to “influence the consumer’s preference for VOD platforms".
Nowhere is this more apparent than at HBO Max. After a rough launch, which saw the notable absence of the service on platforms like Roku and Amazon, HBO Max found its legs and started running, playing catchup to the big players, Disney+ and Netflix. After WarnerMedia announced its controversial movie release strategy of same day theater and in-home availability, the HBO Max app saw an increase in subscriber growth and cracked the Top 10 list for app downloads in 2021, “the only major streamer to do so.” While app downloads do not present a complete picture, this is at least a directional indicator of the growing success of the service in a market dramatically impacted by a global pandemic.
Even with a projected leveling-off of subscriber growth rate, and a decline in traditional cable subscriptions, overall subscriptions are expected to grow long-term, and VOD consumption in general is set to expand, regardless of the potential service consolidation looming on the horizon.
In fact, Digital TV Research sees total SVOD subscriptions reaching 450 million by 2026, with the average household paying for 4 or more platforms. Additionally, according to the “Global Video-on-demand (VOD) Market 2021-2025” report, the global VOD market is set to grow by $162 billion between 2021 and 2025, with one major driver being consumption on mobile devices.
So what does this mean for content providers, service owners, and platform operators?
It means more content on more devices in an ever-more competitive market with a rapidly evolving technical ecosystem. It means greater opportunity with equally greater challenges.
The opportunity is obvious - revenue growth through ad impressions, subscriber growth and, to some extent, growth in transactional VOD.
The challenges are multifaceted but for purposes of this discussion let’s lump them into two categories - Quality of Service (QoS) and Quality of Experience (QoE). Ramiro Nobre with Accedian, in a blog post from 2020, opens with an excellent example of the difference between these two measures of quality.
The difference between quality of service and quality of experience is immediately clear during a videoconference that garbles words or pixelates a PowerPoint slide to the point of illegibility. The video transmission might technically hit quality of service level agreement minimums over the span of the call, but the overall experience still is an epic fail. This is the difference between Quality of Experience (QoE) and Quality of Service (QoS).
While he’s referring to network performance metrics, for the VOD space we can use this as a model. For example, while a service provider might be meeting the terms of their SLA with a content provider, those terms may not necessarily ensure a high QoE for consumers, especially when it comes to on-time delivery of content to the consumer.
Consider the volume of content being delivered to VOD services today.
According to Mordor Intelligence:
The main reason behind the surge in the popularity of OTT streaming platforms is the growing demand for unlimited access to original and high-quality content.
Think about that for a minute. If the major factor in the continued growth of the market is an increasing demand for content, then it makes sense that content providers will continue to grow their available catalogues, either through new content (e.g. “The Wheel of Time”) or the revival of existing content (e.g. “Friends”) in the VOD space.
While most content carries some form of license window, meaning it won’t live on a service or platform forever, this still indicates a growth in volume of content delivered across all content providers and VOD services.
As a content provider, how do you know your content is reaching your consumers on time, and in the format, with the metadata, in the location you expect? (QoS)
And if it isn’t, how are your viewers impacted (QoE)? One impact is diminished findability, and if your viewers can’t find your content, you can’t monetize it effectively.
Pick any tent-pole initiative or high-profile program, “Yellowstone,” “Game of Thrones,” you name it, content has multiple paths to follow on its journey from provider to viewer. How do content providers know whether or not the asset arrived at its destination? In many case, they don’t know unless someone reports a problem.
In other words, a viewer complained.
This is true for other key aspects of the viewing experience. For example, is the asset playable on all platforms to which it was delivered? If it’s not, how long does it take a content provider to become aware of the problem and, more importantly, to fix it? The second can’t happen without the first. Is this a task you, as a content provider, want to trust to just anyone?
And what about license windows? Does the content availability respect the C3, D4 and Day & Date windows? If not, there’s even more at stake if contractual obligations are not being met.
What about the artwork and metadata? It’s not enough to have correct metadata, content providers want their assets to display the artwork and metadata they delivered in the VOD package. This is not always the case as some services choose to present art, images, and descriptive metadata derived from third-party providers, like Gracenote.
Not all networks will be OK with “clean” images, those that do not carry the network’s logo. Yet some OTT services and even traditional MVPDs prefer art without a network bug. Viewers might be confused as well - did the episode of “Big Bang Theory” they’re watching come from TBS or CBS? I think most content providers would agree, this matters.
Metadata mismatches can happen the same way. If a program, let’s say a 30 minute episode of a kids' cartoon (because not all cartoons are for kids these days) was split into two 15 minute episodes and delivered as two separate VOD assets, what descriptive metadata will appear for each of them if the streaming service uses third-party metadata?
Which brings us back to the question - how do you, as the content provider, know when this happens? This question is, or should be, just as important for streaming service operators.
In some cases, at least from my experience on the content side of the business, the first viewers to report a problem are employees of the content provider - people in programming or marketing who know exactly when and where their show is supposed to be at any given moment, and how it should, from their perspective, be presented.
Is this ad hoc method any way to monitor your VOD assets? Obviously it’s not efficient, but for many content providers, human reporting via limited content consumption is the only method available. The larger the content library, the more fraught with risk this becomes. Rapid delivery cadence can be a force-multiplier for these issues too.
But there is a better way, and it starts with AI and automation in the cloud.
This is where eDigital comes in with VODSmart.ai.
VOD Monitoring, the Smart Way.
Competitive Analysis In The VOD Space
If you are a streaming media company - a content provider - how do you identify your competition?