Since the internet became more widespread, media consumption globally has seen higher take up of audio and video than ever before. Online video consumption especially has continued to rocket across the globe, particularly as people utilise smartphone technology to consume a wide range of media in video format, whenever and wherever they like.
To emphasize the importance of smartphone use, it is estimated by Deloitte India that globally smartphone handsets are predicted to reach 4.6 billion in 2019 and measured data traffic for smartphones now accounts for 70% of global data traffic. This is also combined with growth in the tablet market which is predicted to see a 20 times growth in data use in the next few years.
A major impact of these booming technologies has been that more and more people are able to access online video content on their devices and as such have become less and less dependent on traditional media devices like television. Simultaneously, OTP streaming services like Netflix, Spotify and YouTube have seen exponential growth and ushered in a new era of online streamed content, particularly video, and Deloitte now predicts that audio and video could reach 83% of global internet traffic by next year.
It is now predicted that roughly half of US consumers now view video content via online streaming services, a number that increases for younger generations to around roughly 60%. But only around 35% of these actually watching paid for content - around 40% are free services. Despite this, some 75% of American households still subscribe to pay TV, but many of these say that they maintain this largely because it is bundled in with their internet subscription.
An interesting dynamic, particularly among younger consumers, is the growth of so-called binge watching. It is reported that just under three quarters of US consumers binge watch video content, a figure that rises to around 90% of millennials and Generation Z. A binge is considered to be three or more episodes in one sitting, although it is found that these generations regularly consume five hours of content in one go.
For advertising firms, this has caused them to ask several questions about how to reach younger generations that consume media in this way, particularly when they may also utilise ad-blocking software and can avoid the traditional ad-breaks they would have between TV shows. Advertisers have found that rather than traditional advertising, social media recommendations are more influential than TV advertising, with 27% of Generation Z now saying that a social media recommendation can highly influence a buying decision.
The growing demand for video content does obviously come with its challenges however and while consumers may be getting more of the content they want, where they want it, there is the question of sacrificing quality for both audio and visual content. There is also the issue of formatting video content properly and amalgamating a range of content, particularly if consumers want to view it on a television for example. This has led to a whole side-industry of video conversion apps and software that has grown alongside this huge growth in online video consumption. There has also been an emergence of firms like Brightcove that will offer a range of services to help manage video production, hosting and streaming all under one roof.
Such software is of course important for individuals and firms putting out video content and streaming video, particularly if they are looking to host it on a range of platforms, such as social media sites. This is something that has grown in prominence particularly after the success of Snapchat, which has harnessed streaming technology so effectively and which Instagram and Facebook have employed. Although it has raised some questions about the type of content users should stream.
Social media adoption of live video only looks set to grow and Facebook has commented that its live videos get ten times the comments as regular videos. There are also new players coming to the market that see the potential in live video, with Casey Neistat’s live video app Beme being bought by CNN for $50m and a new virtual, video-based community for young people, Houseparty, reportedly getting over a million users a month.
The next logical stage in the development of online video is in connection with artificial intelligence, machine learning and, in particular, virtual reality. With the growth of augmented and virtual reality allowing people to consume online video in a new and exciting way, it is no surprise that VR companies are reported to have a combined market value now of US$13bn – it already looks set to take the burgeoning online video industry to the next level.