The three big trends in streaming services

Paige Murphy
By Paige Murphy | 6 July 2020
Getty

Streaming services have seen a surge in popularity accelerated by the global coronavirus pandemic.  

Matthew Lynn, regional sales director South Asia at global content delivery network, cybersecurity, and cloud service company Akamai Technologies, says this surge has been predominantly led by video on demand (VOD). 

“Live traffic has not been growing as much as video on demand traffic,” Lynn says. 

“That’s not really surprising when you look at live sports, for example, which have been a key driver of live online and OTT (over-the-top) growth historically. We didn’t have live sports to watch [during the lockdown period].”

The Australian market has been flooded with streaming services over the last few years from Netflix and Stan to Disney+ and most recently Binge.

Lynn spoke to AdNews about three trends he has seen as a result of the proliferation of these services both in Australia and internationally.

1. The rise of direct-to-consumer
Media and tech giants are in a race to attract eyeballs across the globe with the content offered on their streaming platforms.

This has led to some content skipping the cinema altogether in a bid to entice consumers to subscribe to their service.

“We are seeing more and more direct-to-consumer type offerings by these major players,” Lynn says.

“Really it will come down to a financial proposition.”

He says major players like Disney and HBO will increasingly weigh up which will generate better revenue - the cinema or an OTT platform.

Disney released Frozen II via its own platform Disney+ instead of in theatres.

This is a move, Lynn says, was likely a play by the media giant to grab new subscribers to the platform.

“COVID has absolutely provided an opportunity for many of these big players to experiment around the OTT platforms and OTT-first movie versus what they get out of more traditional models,” he says.

2. The fragmentation of content
One of the key changes streaming services have brought about over recent years is a decline in piracy.

Offering affordable and accessible content to the masses has seen piracy drop significantly in Australia.

However, as more services enter the market offering different content, this could see that decline be reversed.

“Given the need for people to subscribe to three, four or five services to get all the content they want, does that take us back a little bit?” he says.

As the price to access all of this content starts to add up, Lynn says it will begin to feel like a return to expensive pay TV.

He predicts that it could be cause for people to use illegal sources to gain access to content.

3. The monetisation debate
The great debate over subscription versus ad-funded versus hybrid continues among streaming services.

Lynn says Australians tend to choose subscription video on demand (SVOD) services more than advertising video on demand (AVOD) compared to their global counterparts.

“Here in Australia, given the capacity of the Australian population to pay, we have seen more of a push towards subscription-based models in the local ecosystem,” he says.

“If you look at regions north of here, that’s quite different. The subscription models are struggling and ad-supported models do seem to be quite successful.”

The move towards a hybrid model with an ad-funded tier for free content and premium tier with no ads is also on the rise.

While there are more of these players overseas at the moment, Lynn says the local market will start to see more of this model coming into play across services.

Whether or not it is the winning choice for streaming services though, he isn’t sure.

“Some providers in the market do manage a dual model whereby they have a limited amount of advertising with a subscription and that works well in certain circumstances,” he says.

“There are quite a lot of experiments going on and the industry is still yet to settle on what is the right mix.”

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