Video Streaming and Its Success in the US
Streaming services have been making a huge impact in the US for quite a few years now. In turn, companies that are dedicated to the video industry have benefited from the significant growth of recent years, especially given that the US, more often than not, is the laboratory where success stories are made and from which they are spread to the rest of the world. Most of the industry forecasts predict continued growth in the coming years.
In the US alone, there are now over 200 OTT services that are streaming video. The success of video streaming has not gone unnoticed in the United States. Platforms like Netflix, Amazon Prime Video, HBO, Disney+ and Hulu have gained followers not only because of the quality and variety of the movies, series, and documentaries in their catalogs, but also because of the competitive prices they offer. Some time ago, it was believed that the film industry was on the verge of collapse because of illegal downloading and piracy. Nevertheless, video streaming and the platforms that offer this kind of content have demonstrated there is still hope. Also, we should not overlook another resource with which we are quite familiar that has made inroads in the landscape: social networks.
Social networks have also begun to incorporate tools that enable video streaming. Thus, streaming is being used as a resource by businesses and entrepreneurs so they can carry out strategies that extend their reach to more customers, increasing sales of their products or services.
For example, Facebook Live, is increasingly being used to perform live broadcasts with which followers can interact and ask questions that can be answered in real time. The same thing is happening with Instagram Direct and YouTube, not to mention Tik Tok or the success that options like Netflix Party, the new way to watch Netflix with your friends online, had during the quarantine period.
All of this has contributed to the growing success of video streaming in the United States.
Why is video streaming so successful?
Video streaming owes its success to the growing need to provide quality for a modest sum. This is why streaming has a number of advantages that make it a valuable resource. Its positive outcomes have been witnessed over the years first in the United States then followed by the rest of the world. Some of these advantages are:
- Streaming allows content to be displayed across a number of different devices: from computers, tablets, or smartphones, people can stream video with zero hurdles.
- An affordable price: The fact that the video streaming does not entail a huge cash investment and the cost is negligible reveals why streaming has been so successful in the United States.
- A unique content offering: an advantage to streaming is that many video platforms have created their own unique content, which adds value and helps them foster subscriber loyalty.
Given all these advantages, it is not surprising that video streaming has had such an impact in the United States. Additionally, because this video consumption mechanism has received such a warm welcome, it is estimated that the number of people taking advantage of it will grow in the coming years.
A more competitive market
The potential of video streaming has caused the market to become increasingly competitive. Therefore, it won’t be surprising to see partnerships and collaborations between different streaming platforms. Furthermore, it is likely that many will be available worldwide.
Netflix, HBO, and Viacom spent millions of dollars in 2019 for original content, so it makes sense that their proprietary series and movies are found on their platforms and nowhere else. Netflix exemplifies the power of the new format; its venture has turned the company not only into the premier video streaming pioneer, but the only one that can boast its huge number of loyal followers. To maintain its market share, in 2019 Netflix increased its content spend by $3 billion and upped its content volume by over 50% versus 2018.
HBO joined the video streaming fray as a competitor to Netflix by offering one of the most in-demand series of its day, Game of Thrones (Netflix does not offer it.) This prompted many people to sign up to the service for the two-week free trial period, and HBO was able to turn many of those trial users into loyal customers. Currently, it features a section for children. To continue its growth HBO expanded its production of original content by 50%, to 150 hours in 2019.
Amazon Prime Video also embraced the idea of video streaming, giving additional benefits to customers who buy via their website. They offer one-day free shipment for anyone who is already a client and offer unlimited photo storage on Amazon Drive.
Disney+ has splashed out the most on content, accounting for nearly one quarter of the entire spend. Its 2019 share totaled $27.8 billion and was distributed across its studios, networks and SVOD services. The company continues to lead growth in the market after a stellar debut in the streaming space.
CHART: Variety intelligent platform SOURCE: FINANCIAL TIMES (APPLE); BMO CAPITAL MARKETS (NETFLIX); CREDIT SUISSE (DISNEY, VIACOMCBS); RBC CAPITAL MARKETS, SNL KAGAN, COMPANY REPORTS (ALL OTHER FIGURES)
As we have seen, there is heightened competition which is reflected in even greater demands on video streaming in general.
When looking at the spend figures by company, several competitive tiers emerge. Disney comes out head and shoulders above everyone else, followed by the big five. The third tier, the serious but restrained spenders, includes Discovery, Fox, Apple+, and Sony Pictures.
Video streaming will continue to experience burgeoning success, and given this viewing model’s fiercely competitive market, this success is sure to spread to other parts of the world.
Video streaming has become profitable for businesses and a useful, easy, and eye-catching resource for those who put it to use. So, we will closely and eagerly follow the progress video streaming makes.