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Evolution of Platforms

Evolution of Platforms

Evolution of platforms refers to the changing standards and expectations for broadcasting and media distribution.

Overview

From the introduction of television in the 1940s, the media distribution and broadcasting standards were relatively stable until the introduction of video-on-demand (VOD), television-on-demand (TVoD) and over-the-top (OTT) service providers, which changed the way people choose to consume media. This includes greater flexibility for the format of viewing and different quality of content provided by these services, which has led to traditional or linear television losing ground to the new platforms like Netflix, Amazon Prime, YouTube, and Disney Plus.

History of Television

Television began as a black-and-white medium that built on the transmission methods demonstrated by radio, which offered a way to transmit information between two places without the use of a wire. By the end of World War II, radio was popular and most homes had a radio. At the same time, television was a new and emerging technology; but unlike radio, the early television sets were large and relatively expensive. Even though the first scheduled television service began in July of 1928, it was not until after the second World War that popularity increased—when the technological advantages in manufacturing developed during the war drove the cost of television sets down. By 1962, 92 percent of homes in the United States owned a television. This made television one of the most important technological and cultural advancements of the 20th century from the mid-1950s on.

Starting in 1928, NBC was the first broadcaster offering regular television programs in the United States. Through the 1930s, rival CBS joined and began broadcasting regular programming. In order to ensure that broadcasters did not introduce new standards that would require consumers to purchase different television sets for different broadcasters, both NBC and CBS used the broadcasting standard set by the FCC. This technical standard included a recommended 525-line system with an image rate of thirty frames per second. The early analog systems were later replaced by digital signals, which broadcast by binary code rather than varying radio waves.

The Golden Age of Television

The 1950s is often called the Golden Age of Television. During this time, television sets became widely available and the color television was emerging and available. This technology was based on an all electronic color transmission standard that was developed by the National Television Standards Committee (NTSC), a group of companies with a financial interest in the development of a color television standard. This standard was in competition with a CBS-sponsored system, which initially won the support of the FCC, until 1953. In 1953, the FCC reversed its decision and approved the NTSC's RCA color system.

Following the approval of a color standard, NBC made the first color broadcast in 1954. Besides the increasing popularity of television and the emergence of color television, the 1950s also saw television broadcasters move away from adapted radio broadcasts toward producing content specifically for the medium, including dramatic anthologies such as The U.S. Steel Hour in 1953 and Playhouse 90 in 1956.

Broadcasters also began offering news programming with footage to accompany the coverage, rather than relying on newsreel companies as had been done previously. During this decade, advertisers often sponsored an entire program, until the expected length of those programs increased from fifteen minutes (adapted from radio broadcasts) into thirty minutes; this led to increased sponsorship costs and the introduction of multi-advertising breaks in a single program. As well, shows such as Today and The Tonight Show began to be screened daily, rather than weekly, and further increased the cost of sponsorship.

The growth of cable

Cable television originally grew out of remote or mountainous areas where there was a need to enhance poor reception or regular television signals. The system used cable antennas erected on high points to connect homes to the towers and receive broadcast signals. By the 1950s, cable operators began to expand on the services and bring signals from distant cities, providing not just local services, but also offering consumers more extensive programming choices. Areas that traditionally only had a few channels saw a growth to more than double the original offered channels. Further, cable often offered clearer reception and service, and soon viewers in urban areas wanted the service.

This growth was seen as competition, and broadcasters petitioned the FCC to restrict it, which the FCC did by placing restriction on the ability of cable systems to import signals from distant stations. This stalled the development of cable TV in major markets until the 1970s. In 1972, Home Box Office (HBO) launched. This had customers pay to access the channel and was the first successful pay cable service. HBO used satellites to distribute its programming to make it available throughout the United States, which gave it an advantage over microwave-distributed services and led to an increase in the use of satellite for distribution.

Following this was the 1984 Cable Act, which was passed to promote competition and deregulate the cable television industry and established a national policy for the regulation of cable television.

1990 - 2009: digital television

Following the 1984 Cable Act, there was a proliferation of transmission services. By the 1990s, cable operators upgraded to higher capacity hybrid networks of fiber-optic and coaxial cable that were able to provide multichannel television service along with telephone, high-speed internet, and advanced digital video services. Through lobbying efforts on the parts of broadcasters, the FCC decided to change the standard of television transmission for a digital broadcast transmission standard. The analog transmission had been subject to static, distortion, and poorer picture quality when compared to other mediums. Whereas the digital transmission used binary code to translate TV, similar to computers, and required less frequency space while providing higher picture quality. As of 2009, the switch from analog to digital was completed.

DVR and the Internet
Digital video recorder

Digital video recorders (DVRs) created a sea of change in the way consumers were able to watch shows. Previous to the introduction of services such as TiVo, consumers were able to purchase satellite or cable television packages where time-changing channels were available. Time changing allowed consumers to watch shows in a different time zone for some viewing flexibility. But the introduction of DVR allowed users to record shows to watch later and at their convenience. DVRs also offered consumers a chance to record not just new, but also older episodes of a favorite show. Advertisers used DVRs to track which shows were being viewed and offered targeted ads for these shows, which raised concerns from consumer groups and lawmakers.

Internet

DVRs grew in popularity, to the point that traditional broadcasters and cable providers included DVR systems in their products, removing the competition from third-party DVR services. At the same time, the internet began to emerge as the new medium for entertainment and created a major shift to the television industry. This brought the same difficulty and challenges to television that the internet brought to other industries, such as newspapers, magazines, the music industry, video rentals, and bookstores. One of the major changes the internet offered was the ability to pirate movies or television shows, which offered anyone with the interest and an internet connection a chance to watch, illegally, anything they wanted at any time.

The other major change, which signaled a coming change in the way media was consumed, was the emergence of two platforms: YouTube and Hulu. Both are media streaming services that emerged around the same time; while different on the surface, both services pushed the industry in different ways.

YouTube

YouTube was created in 2005 by three PayPal engineers. The service was initially intended to be a social media platform for users on which to to post, upload, share, and view video content without restrictions. This, in turn, saw users upload personal videos, television clips, music videos, and movie clips that could be viewed worldwide. Unlike other services emerging around the time, such as Napster, YouTube navigated copyright infringement lawsuits by forming agreements with media corporations.

Despite its start as a video sharing platform, YouTube has become a go-to entertainment website with video-on-demand rental services, offering live viewing of concerts and sporting events. By 2010, YouTube was receiving 2 billion video views per day and with twenty-four hours of video uploaded every minute. Google purchased YouTube in 2006 for $1.65 billion, predicting the site would be a part of the development of the internet and the entertainment industry.

This has, in turn, allowed viewers around the world to view content on the site—with availability in over seventy-six languages, local versions for eighty-eight countries, and reaching an estimated 96 percent of people on the internet—surpassing the viewership of traditional television. The platform continues to offer user-generated and original content, has created a profession for some users, and has become one of the most popular video distribution platforms.

2007

By 2007, in response to some of the copyright infringement complaints and complaints from major broadcasters, YouTube introduced the "Content Verification Platform," which helped creators identify videos that infringed on copyrights and remove them. In the same year, despite complaints from large media corporations, NBC used YouTube as a promotional tool to promote the company's coming broadcast lineup.

In 2007, YouTube also launched the first mobile application of the site after Apple launched the first iPhone, creating a platform that could be viewed anywhere and at any time. This is the same year YouTube launched its first ads on videos, which are semi-transparent banner ads that pop up on the lower section of the video during video play and cannot be clicked away for a few seconds.

During 2007, YouTube partnered with CNN to host a presidential debate that featured questions submitted by user video. And it is the year the company developed its "Partner Program," which allows creators on the platform to generate an income from ad revenue on their videos. This allows users to turn video production on YouTube into a career and allows popular producers to earn a six-figure income within the year.

Arguably, this was a big year for YouTube, as the partnerships with media conglomerates validated YouTube as an entertainment and news platform. As well, it set up the trajectory of the company for many years to come and allows the company to exist in tandem with user content, but with the platform not relying on the users to develop the platform, as other platforms tried and failed to do.

Other services

YouTube continued to develop services, such as the company's partnership with Vivendi, to launch Vevo, which was developed in response to complaints about piracy and unfair licensing terms for music videos on the platform. As part of the deal, Vevo distributed music videos on YouTube, which led to Vevo's massive presence on the platform. This turned the platform into a go-to platform to see artists' new music videos, and for artists to launch those videos.

Furthermore, to compete with other emerging online services, YouTube launched its YouTube Live to allow users to stream live broadcasts and other content, including concerts, sports games, the royal wedding, and the Olympics. It has continued to be used as a place for news outlets to stream new stories and content. Around the same time, YouTube launched a video rental service, allowing users to compete with other video on demand platforms, such as Netflix and Hulu.

After the popularity of some of the platform's services, YouTube has created themed spaces for interests and services. This includes the development of YouTube Kids, which is a family-friendly version of the platform that filters content to ensure it is safe for minors. By 2020, this service attracted more than 8 million weekly users. And YouTube Gaming was launched as a way for gamers to livestream play sessions with a live audience they can interact with in real time, and is meant to counter Twitch.

Later, YouTube launched YouTube Red, a subscription service that lets customers watch videos and stream music without ads and offers access to exclusive content. This was later renamed as YouTube Premium, which spun off the music streaming service to a separate service called YouTube Music. In 2017, YouTube launched YouTube TV, an on-demand streaming service launched in select markets. This proliferation of services and options has allowed YouTube to compete in most avenues of the entertainment and broadcasting services and to compete directly with television and be part of the change in the consumption of media.

Video on Demand and Hulu

Although not necessarily the first video on demand (VOD) service, and with a greater focus on television shows, Hulu was established in 2007 following a deal between NBC Universal, News Corporation, and a number of companies such as Yahoo!, AOL, MSN, and MySpace, to give users access to a library of television shows. This library included current shows with material syndicated to partner distribution rights and older shows. Similar to YouTube, the platform was supported through advertising and was available only to viewers in the United States. By 2009, the site received more than 38 million viewers and delivered more videos than any site other than YouTube. The company was able to increase its advertiser base to 250 sponsors and generate $120 million in revenue.

However, unlike YouTube, Hulu was dependent on the networks for its success, because Hulu was only successful through the syndicated programs. And as Hulu grew, networks became more concerned over threats the program had to the financial underpinning of cable TV, by reducing DVD sales and avoiding carriage fees. Broadcasters began to pull popular shows from the network. And following more disputes, Hulu turned off support for Boxee, which was an over-the-top (OTT) service that allowed users to watch Hulu on their television. Until and after the shut down of support for Boxee, viewers were only able to watch Hulu on their computers. During this time, cable networks began to offer streaming for free on their own websites to stop viewers from watching elsewhere and generate additional advertising revenue. This began to affect the quality and quantity of advertisers that Hulu was able to attract. As well, Hulu was unable to produce any compelling original content to convince consumers to move to their platform.

Disney acquisition

By 2011, Hulu was short of revenue targets, and equity stakes in the company began to be sold by large shareholders. This saw Disney, by December 2017, take a 30 percent stake in Hulu. With Disney's acquisition of 21st Century Fox in 2019, Disney's holding increased to a 60 percent interest in Hulu. In May of 2019, Comcast to relinquished control of Hulu to Disney and the streaming service became a division of Disney, with Comcast becoming a silent partner. This made Hulu a third component of the company's direct-to-consumer strategy, which complemented the company's sports streaming service ESPN plus and the then-forthcoming Disney Plus.

Disney's interest in the flagging streaming platform was not necessarily in Hulu's brand, but in the catalogue and rights that were attached to the brand, as even under acquisition many of the agreements remained in place. This allowed Disney to have a catalogue of their classic movies, but also a home for more adult content to keep Disney Plus a more family-friendly streaming service. However, outside of the United States, some of the content on Hulu found its way to Disney Plus, and the adult content that Disney did not put on the Disney Plus platform in the United States is on the platform in other regions.

Due in part to the limitations of the streaming agreements with Hulu, Disney restructured the company to move Hulu's Scripted Originals team under Walt Disney, meaning the team reported to the chairman of Disney Television Studios and ABC Entertainment. And as of November 2019, FX and Fox Searchlight supplied Hulu with content. This ended with Disney in 2020, eliminating the role of the Hulu CEO, and integrating Hulu into the Disney business model as the company continued to reorganize the business with a greater focus on streaming.

Disney Plus vs. Quibi

While Disney Plus was able to launch with Disney's catalogue of classic children's movies and content from the Marvel and Star Wars franchises, Quibi focused on developing original content specifically for the platform. Disney Plus and Quibi launched around the same time and needed to navigate the COVID-19 pandemic early in their existence. And both handled the pandemic differently.

Quibi

For Quibi, the company was launching with the mobile-first, if not mobile-only, format for the platform intended not to compete with other VOD platforms such as Netflix, Hulu, or Disney Plus. Except around this time, services such as Netflix, Amazon Prime, and Disney Plus were adding to or announcing the upcoming ability to download select content to allow subscribers the opportunity to watch content on their mobile devices without data cost concerns, and competing directly with Quibi. Quibi did not see their potential viewers as a primetime audience, but rather as those viewing content on-the-go between 7 a.m. to 7 p.m. This had Quibi competing with the download capabilities and multi-platform capabilities of the other platforms, and competing with the viewership of YouTube or TikTok, both of which have massive catalogues of user-generated content.

As far as content is concerned, the company was focused on three types of content. The first was movies broken into chapters; the second was unscripted short-form series; and the third was the company's "Daily Essentials," which were intended to cover news, sports, weather, and talk shows. The company's pre-launch plan was to launch with 175 original series and 8,500 episodes in the first year, with three hours of new content daily. As well, Quibi was expected to be spending up to $100,000 for every minute of content generated, whereas YouTube creators spend between $500 to $5,000 per minute. As well, Quibi tried to tie in celebrities and related projects to create buzz around the upcoming streaming platform.

However, Quibi came with a subscription cost, which was presented as low-cost—offering a subscription for $4.99 per month with advertising or $7.99 per month with no ads. However, Disney Plus offered better value at launch, which launched at $6.99 per month, offered cost bundles with Hulu and ESPN Plus, and was advertising-free. Quibi offered a free month, which after the first few months was found to have less than 10 percent of conversion; meaning in April 2020, the platform saw an estimated 910,000 users, but by the end of the trial period, there were an estimated 72,000 users paying for a subscription. Quibi lacked features in the application, especially the lack of OTT or casting support at launch, and an inability to take screenshots or captures; overall, the platform rollout faltered.

By October 2020, Quibi announced they were shutting down, six months after launch, after failing to gain traction. The company, in part, blamed the COVID-19 pandemic, despite the increased screen time during the pandemic and the competitiveness of the streaming landscape.

Disney Plus

Although Disney was able to launch their streaming service with an anticipated $1.8 billion to keep the service afloat, which Quibi did not necessarily have, and despite the platform's comparable 11 percent conversion of early free trials, Disney Plus saw 9.5 million people sign up for the platform in the first three days of availability in the United States in Canada. These early subscription numbers were propelled by the catalogue of classic Disney films and also by the anticipation for The Mandalorian show, which offered original content on launch that was exclusive to the platform.

Eight months after launch, based on Disney Plus's continued expansion into new regions and the announcement of new original and exclusive content, the company grew to 50 million subscribers, which had been the platform's goal for 2025. This was in competition with over 300 streaming options, including HBO Max, NBC Peacock, Quibi, and Apple TV. The surge propelled Disney Plus into the company of Netflix and Amazon, where Netflix enjoyed 190 million subscribers and Amazon Prime had 112 million subscribers.

Part of this success was also due to the wide availability of the streaming service, which was able to be viewed on all platforms with in-browser viewing and applications for iOS and Android available at launch, as well as support for the service on Apple TV, Google Chromecast, Android TV, PlayStation, Roku, Xbox, Amazon Fire TV devices, LG smart TVs, and Samsung Smart TVs. The wide OTT support allowed users of most widely available devices to access the platform, unlike Apple TV Plus, an original content streaming platform that was originally only available on Apple devices. And the wide region availability has allowed users globally to sign up to the service.

Netflix

Netflix is arguably the most popular and successful of the streaming platforms and is the first service to begin to convince consumers that they could do without cable subscriptions to linear television providers. The company was founded in 1997 by Reed Hastings and Marc Randolph as a video-rental company, where users paid a flat monthly fee for as many movies per month as they wished, but with a limit on the number of DVDs in their possession at one time dictated by their subscription plan. By 1999, this service was offered online.

Part of Netflix's early success, especially compared to rival Blockbuster, was the ability to use the company's website for suggested rentals based on a viewer's rental history. In 2006, in order to continue to develop this capability, Netflix launched a $1 million contest to see if anyone could improve the company's recommendation system; this was awarded three years later to BellKor's Pragmatic Chaos team. By 2007, Netflix began to offer subscribers the option to stream some of the platform's television and movies, with most subscription plans offering unlimited streaming. The company partnered with manufacturers of video game consoles, Blu-ray players, and related consumer electronics to offer the streaming service built in. The success of the streaming-only service saw the launch of a streaming-only plan, offering unlimited streaming but without access to DVD rentals.

Streaming and expansion

This was a major development for Netflix, as the streaming-only service was able to expand beyond the United States, no longer limited by the physical mailing of discs, into Canada in 2010, Latin America and the Caribbean in 2011, and the United Kingdom, Ireland, and Scandinavia in 2012. By 2016, the service was available in more than 190 countries and territories.

When initially launched, the Netflix streaming-only plan offered 1,000 titles, was limited to PC and Internet Explorer, and offered a cap in the amount of hours of streaming. However, Netflix understood streaming was the future of television and began to expand its availability, with the inclusion of the service on Apple devices, Nintendo Wii, and other internet-connected devices, as the service expanded territorially.

Original content and the future of streaming

The expansion was also not limited to device and streaming format, but included original programming. By 2013, Netflix was nominated for thirty-one Emmy awards, which made it the first internet TV network or streaming platform to be nominated for a Primetime Emmy. For some, this legitimized the idea of a streaming service in place of linear television. Content such as The House of Cards and Orange is the New Black offered consumers original and award-winning content not available elsewhere. In 2015, Netflix released the company's first original feature film, Beasts of No Nation, which premiered on the streaming platform. In the same year, Amazon won a major award for the original series Transparent, further legitimizing the streaming platform model.

Netflix's push for original content, mirrored by competitor Amazon Prime and later Disney Plus, came not only from a desire to build the catalog of the streaming service and to offer exclusive shows and services, but also to compete with major media conglomerates that were beginning to build their own streaming services and would begin to pull content away from the aggregating platforms like Netflix and Amazon Prime, in favor of their own services. This saw Netflix spend $12 billion to build a library of exclusive and original content, taking Netflix from platform technology to media producer. Arguably, the success of services such as Netflix and Amazon Prime legitimizes the streaming service model, creating a proliferation of services and the continued push for new content.

Emerging technologies

Television has continued to evolve beyond the living room TV and its weekly schedule of shows bringing people together—to a model where viewers can watch shows on-the-go, with different devices, and based on the viewers' schedules rather than the broadcasters' schedules. This has changed the way consumers interact with television and the way television and broadcasters offer content. For example, the rise in streaming platforms has led to an increase in services such as NBC Peacock, Apple TV Plus, and Disney Plus, which offer the network's or production company's content. They then compete on regional and technological availability, where the widest availability with the greatest amount of content, and award-winning content, generates the greatest number of subscribers.

This has led to an explosion of over 300 streaming services available in the United States alone, and offers a model where platforms such as Netflix and Amazon Prime, which offer original content and also work as super aggregators of other content, compete more successfully. The length of time a streaming service has been in the market does not necessarily indicate success. Amazon Prime launched in 2006, Netflix launched its streaming-only service in 2007, and Hulu launched in 2007; two of those platforms have continued to see growth, while Hulu has become a subsidiary of the more successful Disney Plus.

The increase in streaming services offered has not directly correlated with an increase in streaming service subscriptions. There are over 300 streaming platforms and on average, Americans subscribe to three paid streaming services, representing an average cost of $37 per month in subscription fees. This is a large jump from 2017, which saw the majority of Americans subscribed to a single service, which was overwhelmingly Netflix. Incumbency can be important, as the burnout on streaming services has seen once-hyped services, such as Quibi, struggle and ultimately fail, and even services such as Disney Plus needing to rely on wide availability on rollout and a strong back-catalog of content to compete. The clear thing the platforms have shown is that moving forward, streaming services seem to be where consumers and the industry are headed.

Personalization and algorithms

As of 2019, an estimated 21.9 million American households have cancelled their cable services, with an expected increase to 34.9 million by 2023. While a large part of this push towards streaming services is based on available content and wide-streaming support on devices, the effect of algorithms used to create personalized offerings is also an important key to the success of the platforms. This way, users do not have to wade through the massive libraries offered by a streaming service, but rather the service can use collected data to understand what a viewer wants to see and offer similar choices. The collection of viewer data has also allowed Netflix and competitors a chance to generate greater insight into what genres and talents the company should pursue based on real demand.

This personalization has offered viewers a chance to pay for content they wish to see, without the need to pay for superfluous content such as that provided by cable packages. One way television could continue to compete with streaming platforms would be through offering personalized cable packages that would allow consumers to receive the channels they want, without the channels they do not want. As well, television could work to integrate similar viewer data, beyond the traditional metric of views, to create more personalized choices and recommendations for channels and programs. Furthermore, automation and artificial intelligence could be integrated into traditional viewing experiences to give viewers more contextual data and a chance to interact with programming. For example, in a weather broadcast, the use of data and artificial intelligence could provide more contextual data based on a viewer's actual, rather than approximate, location, and could be updated in minutes, rather than each hour.

Proliferation of services

As streaming has become more successful and more popular, some suggest an oversaturation of the streaming market. Despite the COVID-19 pandemic showing an increase in screen time and an increase in streaming services subscribers, there have been concerns that streaming services could begin to crash in on themselves. Early suggestions of this came from the cancellation of cult favorite shows on Netflix and Hulu (One Day at a Time and The First, respectively), which were the kind of shows streaming services could support as there was not competition for time slots that would lead to low viewership shows being cancelled.

These cancellations were due, in part, to licensing and exclusivity deals, with One Day at a Time produced by Sony Picture Television, not Netflix, and therefore costing more than it could be deemed to be worth in viewership. Another example was Netflix's fight to keep the television show Friends, which led the streaming service to pay $100 million to keep the sitcom on the site; but the deal was not a non-exclusive deal, allowing WarnerMedia, the show's rights owners, to shop the show around to other streaming services. This kind of proliferation can lead to multiple services and platforms offering the same shows and undercut the competitive positions of the streaming platforms, while benefiting the cable networks and original producers of the content.

Furthermore, the streaming service landscape is beginning to grow in a resemblance of the plethora of channels, with each broadcaster or cable provider offering their own streaming service, similar to Disney Plus, HBO Max, and NBC Peacock, but extended to TNT, TBT and CW. Although oversaturation in the market would depend on the technological availability and the geographical availability of these services, in the United States it would lead to an increase in saturation which could push the market towards television, where the relative cost of multiple channels could be less than streaming services, and especially if those channel packages were able to be personalized, or it could lead to greater market domination by the more widely adopted streaming services.

Adoption of new technologies

Be it OTT offerings, recommendation engines, or the merger between traditional and new media platforms, the adoption of new technologies offers traditional or linear television service providers a chance to compete in a changing media consumption landscape.

Recommendation engines

Streaming services have been able to develop algorithms and recommendation engines to preclude the need for consumers to browse shows and instead offer a tailored library for the viewing habits of an individual consumer. This has driven the pressure to unbundle cable as consumers have grown accustomed to personalized choice. As these services continue to mature their recommendation engines, the platforms are able to better serve the viewers. As well, the streaming platforms have been able to disambiguate their offerings from advertisers while being successful. This is especially important as consumer concerns around undue influence of advertisers on programmers and their content has grown, which could push traditional cable providers to unbundle and offer a direct subscription model. Although it is more likely a hybrid model will emerge, where subscription fees are paired with limited advertising.

Merging with new media

As more potential viewers move to subscription services, traditional media has turned to social media, where news streams can be found on Twitter and Facebook. The partnership between social media companies and traditional broadcasters allows both to grow user bases and keep viewers informed. One example has been YouTube, which has offered traditional media organizations a platform to present new content. Furthermore, there has been a suggestion that a service offering a single subscription to allow users to watch content from multiple streaming services, similar to traditional channels, could enter a role known as "super aggregator," which would focus on aggregating rather than creating content. The challenge with this model is the streaming services have proven unwilling to license original content to other broadcasters or streaming services, as these shows and movies are considered competitive advantages as much as content.

However, in a reversal in the trend, Netflix offered a linear television channel in a pilot program available in France. The channel was presented as a remedy for viewing indecision and continued the traditional nature of Netflix binge-watching by offering up to five episodes of the same series back-to-back. In what seemed like a backwards move, Netflix Direct offered the streaming service as a promotional tool for those used to linear television as a chance to experience Netflix content and encourage new subscribers to join the service. As well, if offered to a wider audience, it has been suggested that Netflix would use Netflix Direct to release anticipated episodes in a fixed-time event. This way, the streaming service could turn the new episode into a viewing "experience" with a chance to go viral, similar to traditional shows on air times and live events.

For some regions, this would also offer Netflix a better "media chronology," which dictates when a service is allowed to receive a film. In the media chronology, a film is allowed to be released on DVD or Blu-ray four months after release, is broadcast on a free television channel twenty-two months after, and is available on a streaming service after 36 months. Netflix Direct would be able to compete as a television channel and would accelerate Netflix's schedule by fourteen months.

Evolution of multiple system operators

Another change that could see multiple system operators (MSO), such as Rogers Communications, Shaw Communications and Videotron in Canada; or Altice USA, Charter Communications, Comcast, and Cox Communications in the United States; or Virgin Media in the United Kingdom; evolve from operating the cable systems for television broadcasters to offer their bandwidth towards streaming services and off-cable networks. The MSO market has seen increased consolidation, such as Altice acquiring Cablevision and Suddenlink or Charter acquiring Time Warner Cable and Bright House. This consolidation can allow MSOs to increase their client base and deepen their commercial portfolio. This would allow MSOs to compete in the market as they increase their fiber portfolio.

MSOs have already moved from purely cable providers to ISP providers, and MSOs have begun offering OTT services themselves. They could limit the traffic over their networks to reduce the ability for non-MSO OTT service providers to compete in certain regions. Or as the market has moved towards OTT services and away from cable packages, MSOs could use their existing facilities to create access nodes and data centers usable by wireless and edge service providers. Access nodes for wireless competitors require location, power, backhaul, and maintenance, which MSOs could sell and provide OTT with, as well as local server space, power, and operators. And with edge services under MSO supervision, cable operators could also offer notice of performance issues, bandwidth constraints, or other problems.

Universal aggregation

Similar to this, MSOs could provide universal aggregation and increased choice and control of tangible business assets, such as coherent optics and pluggable dedicated and shared fiber. By supporting these services, including mobile services, aggregation could expand the MSO application space and help them provide the network speeds, feeds, and routing capability to support traffic from multiple service types. For MSOs to offer universal aggregation, these companies would have to build different access networks for different services. This could introduce a new version of simplicity to allow cable operators to bring their network to support a different type of services and support concurrent PON, IP, and Ethernet services without radical platform changes.

Over-the-top (OTT)

OTT devices were originally named for devices that go "over" a cable box to give users access to TV content delivered via an internet connect rather than through a traditional cable provider. This includes devices such as smart TVs, Apple TVs, Chromecast, PlayStation, Xbox, Amazon Fire Sticks, and related devices. OTT viewing has increased as people have left traditional cable subscriptions in favor of streaming platforms. And for traditional cable providers, the ability to develop programming for OTT devices, either with a focus on local content or on live broadcasting, would allow those services to retain or increase viewership. OTT could also offer traditional cable providers or networks to offer diversified content and develop OTT-specific content. The providers of OTT devices are developing similar resources themselves to give consumers either region-specific or device-specific content for entertainment or information.

OTT devices offer a way forward that can combine traditional broadcasting services and a place where users can find multiple streaming platforms in their applications. And with the wider adoption of OTT devices and the inclusion of these devices in Smart TVs, they offer a place where broadcasters can offer live events, such as sporting events. And OTT can offer VOD services or pay-per-view services. In this way, a user, through an OTT, has a single place where they can find apps for streaming services such as Netflix or Disney Plus, but also a place to access more specific or thematic streaming services such as Crunchyroll, Shudder, Dekkoo, or oQQur.

Other new technology, such as artificial intelligence, 5G, and cloud computing and storage, streaming over OTT can be optimized for users and enable content providers and aggregations platforms a chance to differentiate services, expand the supported areas, and optimize the streaming.

New network standards and live event streaming

Streaming live events without latency and with stability is bandwidth intense, which is in part the reason why much of live streaming events and sporting events remains on broadcast television, where the systems for live event streaming has been in place for longer. But, with new network technologies like 5G, there is the possibility of faster and more reliable internet, making it easer to stream live events with lower latency and greater stability, competing with broadcasters. Higher bandwidth internet connectivity also offers higher quality, such as 4K, streaming, and the possibility for virtual reality and 360 live streaming opportunities, with easer integration than trying to use similar technologies through traditional broadcasts.

New Codecs

With new cloud-computing and storage for streaming and live streaming services, new video compression formats have been developed to decrease the bandwidth cost of streaming while offering the same or higher video quality. The first codec is a video compression format called Versatile Video Coding (H.266/VCC). The codec prepares video for streaming over the internet for shorter video load times, better video resolutions, and a reduction in the amount of necessary data for streaming video.

The other, competing, video codec intended to offer similar streaming optimization as H.266/VCC is the open source AV1. This codec, developed by the Alliance for Open Media, uses new compression technology to offer twice the efficiency, transmit higher quality video faster, and continue to offer high-quality experiences to end users in the case of constrained bandwidth. Unlike H.266/VCC, AV1 does not have licensing fees and is expected to have wider adoption among content creators and web browsers as they do not have to worry about licensing fees. The AV1 codec already has announced support from Amazon, Apple, Facebook, Google, Samsung, and Mozilla.

OTT Platform competition

As OTT platforms continue to develop, the competition between services is expected to happen across two factors: the availability of content and the user experience.

Content

Content is arguably less important for OTT platforms, so long as they are able to provide a catalogue of available streaming platform applications for users to access and, likely, a video-on-demand service allowing users to rent digital versions of films or television series. However, with an increase in described "subscription fatigue", where consumers are less interested in increasing their subscriptions as more services are offered via subscription, an OTT platform capable of offering a personalized collection of services for a flexible pricing model, so that it does not become the packaging of content that cable providers have offered, but that it offers users a chance to pay and engage with a single platform while receiving the same experience the viewer is used is one way an OTT platform can compete and offer a greater service to the consumer.

User experience

As these platforms are often aggregators of streaming services and related content, the user experience (UX) of the OTT platforms is arguably of greater importance for the adoption of users. This is especially true as most OTT platforms all offer the same main streaming services, and may only differentiate in more user specific scenarios. The trend in UX is towards an aesthetically-pleasing platform, although based on personal taste this is more often called "pleasing to the eye", as well the platform needs to be easy to navigate, with the platform that is easy to navigate garnering greater consumers. And as part of UX, the ability for OTT platforms to connect to different devices and offer greater compatibility also offers a greater competitive advantage.

Google TV/Android TV

Previously known as Android TV, Google TV is a refresh and upgrade of the OTT platform offered by Google, with the expectation that compatible hardware running Android TV will be upgraded to Google TV. The platform offers a place to collect a viewer's favorite streaming applications, and from those applications offers a home screen with recommendations based on viewing history and a place for users to select a movie or show without directing through the specific streaming application. As well, with further integration into Google's Android operating system and the Chrome browser, users can add television shows or movies to their watchlist through the different service, meaning users would not have to log into the service or remember something they saw earlier.

Other Google and Android applications are accessible through the Google TV system, which further integrates the ecosystem into a viewing experience. And Google TV includes the Google Assistant for voice-based search, as well as voice-based commands when used with a Google Assistant-enabled device, such as the Google Chromecast with Google TV. As well, the Google TV platform offers a "For You" tab, which offers features from a viewer's favorite applications or movies or shows in-progress, and some tailored recommendations. The platform and related devices also offer up to 4K streaming and an aggregated platform with the promise of users not needing to switch between downloaded applications for content, but rather the content being accessible through the platforms home screen.

Apple TV

Apple TV devices are the oldest series of OTT streaming devices, originally launching as iTV in 2007 and changing the name to Apple TV later, due to copyright concerns with British television channel ITV. These devices offer applications for different content streaming platforms, including Apple TV Plus, Amazon Prime Video, and Netflix. As well, the devices have been developed to offer 1080p HD content and 4K ultra-HD streaming content, with support for HDR10, Dolby Vision, and Dolby Atmos standards. The purchase of additional remotes offers support for voice commands.

As other OTT devices began to offer support for live news and sports streaming, the Apple TV devices have also offered them for users in the United States. The Apple TV devices offer a user interface designed with the intention of providing ease of use and mirroring design language and user interface choices among other Apple devices such as the iPad and iPhone to provide a consistent experience across devices. And through Apple's integration of the company's HomeKit application, the Apple TV devices can be connected to other connected devices in a space.

Roku

Roku is a family of streaming media OTT devices originally launched in 2008 as DVP devices. These devices are intended to offer users a simple way to access streaming video and audio content on television, similar to the devices offered by Google, Apple, and Amazon. Roku offers users watching content through different content providers and their applications. As well, Roku licenses their technology out, and it has been built into soundbars, such as those offered by Onn, and included in televisions made by manufacturers such as TCL, RCA, Toshiba, and Hisense. These devices allow users to access paid-content options, such as Netflix, and free content from available sources. For example, Roku offers the Roku Channel, which is a collection of free-to-watch and ad-supported shows and movies, which can also be enhanced with optional paid subscription services, such as Starz, Epix, and Showtime. And users can access free live TV streaming channels, including providers such as ABC News Live, NowThis, and Reuters.

Fire TV

Fire TV is an OTT device offered by Amazon. The device allows users to access streaming content applications, including Amazon's Prime Video service, and video-on-demand services. Many Fire TV devices offer voice support and Amazon's AI assistant, Alexa. Through Fire TV, users are also able to stream live TV from various networks and use a Fire TV device to watch and record live TV with Fire TV Recast and an HD antenna. Similar to other OTT services, the Fire TV services work over WiFi, and more expensive models offer ethernet connectivity for more stable connections, with content able to be streamed in 1080p HD and with more expensive models in 4K ultra-HD.

During the COVID-19 pandemic, Fire TV saw an increase of around 115 percent in the use of the OTT device for streaming fitness classes. Even with an expected reduction in users post-COVID-19 pandemic, Fire TV and parent company Amazon expect these and similar services to continue to grow. Part of these developments have included a Fire TV news application, offering local news from over eighty cities. With the early success of this application, Fire TV is expected to include coverage from national and local news outlets for more locations.

As with other Amazon services, Fire TV has been included in televisions sold through Amazon and other retailers; the built-in Fire TV offers similar services to generic Smart TV. With the expansion of 5G, Fire TV and Amazon are developing the capability to offer their service in vehicles. The first vehicles to launch the service built-in are the Jeep Wagonners. The early focus is on rear-seat entertainment, with the possibility that as cars become autonomous, the entertainment could end up in a vehicle's infotainment system.

Reelgood

Reelgood is a content aggregator application. It is similar to the OTT devices and the services they offer, except Reelgood does not offer an OTT device and can instead be installed as an application on the OTT devices. The content available through Reelgood includes every major streaming option in the United States; the content can be accessed through the single application without having to go through individual applications. For example, rather than having to watch Netflix content through the Netflix application, a user can enter the Reelgood application, where they can browse Netflix, Disney Plus, and HBO Max content without leaving or entering new applications.

Market maturation scenarios

While streaming services have gained ground on a broad front, linear television remains the go-to place for popular live content, such as sports and major events. And TV and video advertising is adapting to new formats for greater personalization, made possible by greater amounts of user data and the increase in fast fiber optic networks and 5G, which can enable greater amounts of data for advertisers. These advances will also offer greater mobile consumption options. As subscription services, linear television, and to a lesser extent, social media platforms work to create more benefits for consumers, there is an expectation for an increase in network neutrality. Come 2030, there are many possible scenarios for where the television and video industry could end up, which could be summed up in four overarching models or scenarios: a universal supermarket, content endgame, broadcasters return, and lost in diversity.

Although all of these scenarios are likely, what is more likely is that different regions will see different outcomes, with countries or regions given to strong regulations influencing outcomes in certain directions, while countries or regions favoring little to no regulation seeing different outcomes.

Universal supermarket

This scenario would see platform companies taking over from broadcasting companies and working like a supermarket does for retail goods, with the platforms aggregating the services from multiple streaming services to create simplified digital platforms where artificial intelligence helps to offer users a more personalized experience. The differentiator between digital aggregation platforms would come down to exclusive content and live sports offerings, which would be where they compete. But in this scenario, traditional linear television broadcasters would cease to exist in favor of these platforms, which are capable of offering the few services linear television still offers, while also being divorced from an advertising revenue model. This would be especially difficult as more advertisers would, in this scenario, move away from traditional or linear television in favor of the more popular platforms, drying up the well of money that traditional linear television has come to rely on for revenue. This scenario would require regulators to stay hands off to not regulate the offerings from digital platforms.

Content endgame

This scenario would see content owners taking over the market with vertical integrations along the value chain, including video, television, distribution, and personalization services. Content owners would be withdrawing and withholding content from digital platforms, in favor of distribution through their own platforms where they can reach consumers directly. Most competition and diversification would happen in content, while recommendation, search, and related features would not factor into consumer choice. In this scenario, the ability for broadcasters to develop local content would help them continue to survive and develop into content suppliers. For this scenario to work, protections from regulators would be necessary to stop the content owners from buying the local broadcasters. And digital platforms would turn into distribution platforms focused on technical distribution with freemium features driving revenues.

Broadcasters remain

In this scenario, broadcasters would successfully switch to digital platforms with direct customer relationships and the capability to deliver on-demand products. This would require broadcasters to develop cognitive computing for targeted advertising and personalized recommendation functions. This would see a market structure where broadcaster and digital platforms coexist, with broadcasters focused on local content and digital platforms supplying global productions. This would give consumers the choice to watch linear or non-linear content. This would also require cooperation between local networks and network operators to help traditional broadcasters with digital media distribution and customer data, to develop platforms for broadcasters that could use the viewer data to further personalize advertising, which, in turn, would see advertisers helping broadcasters implement these advertising structures into their digital distribution platforms. For this scenario to work, there would need to be strong media regulation at a national level that would favor broadcasters over digital platforms.

Lost in diversity

This scenario would see the television and broadcasting market develop into an even more diverse market with no dominant players. Consumers would instead be served by many distribution platforms offering a richness of content with a steady turnover of players in the market. It would be likely that strong demand for local content would continue to drive partnerships in the market for platforms to be able to deliver the largest variety of local content. And this would see a strong link between content development and distribution in successful players, with everyone doing everything. And in this scenario, IP operators could begin to act as super aggregators, offering access to content and influencing how the market is structured from a consumer perspective. This scenario also suggests consumers driven more by a desire for new and interesting content, rather than offering a single digital platform or brand loyalty. This would, of all the above scenarios, offer one of the more rich and complex environments, both for content and for advertisers, and would also require regulators to favor local and national broadcasters' rights over large digital companies.

Timeline

June 7, 2021
The new video streaming codec, H.266/VVC will be published in fall 2020 and promises cheaper and higher quality video streaming.
December 2020
ABQQ.TV engages highly anticipated video streaming service targeting global multi-billion dollar and growing video streaming industry, will launch December 2020.
October 24, 2020
There is a growing acceptance among media executives that the decline of cable TV is near and more media companies develop digital platforms for content distribution.
September 21, 2020
Pandemic is found to accelerate cord cutting, and makes 2020 the worst-ever year for pay TV.
2020
From 2018 to 2019, 4 million households drop their cable subscriptions. In the same time, houses without pay TV increase from 36 million to 40.2 million; and this does not capture the amount of those who will never subscribe for pay TV.
January 2020
Disney eliminates the role of Hulu CEO, fully integrating Hulu with Disney's business model.
November 12, 2019
Disney Plus is launched, available across a wide range of devices in the United States, Canada, the Netherlands, Australia, and New Zealand, and an announced expansion for the United Kingdom, Germany, France, Italy, and Spain in 2020.
May 14, 2019
Comcast relinquishes control of Hulu to Disney, and the streaming service becomes a division of Walt Disney Direct-to-Consumer.
2019
Number of households using OTT for viewing media content rises from 170 million in 2018 to 182 million in 2019.
April 2017
YouTube launches YouTube TV, an on-demand streaming service.

Further reading

Title
Author
Link
Type
Date

11 Huge Streaming Trends 2021 - 2025

Kyle Byers

Web

May 24, 2021

11 Huge Streaming Trends 2021-2025

Kyle Byers

Web

July 10, 2020

AV1 & Media Codecs

Mozilla Research

Web

AV1 is a royalty-free video compression format for the web

Web

Disney+: Here's what we know so far about the upcoming streaming service

Chris Gates

Web

September 23, 2019

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Documentaries, videos and podcasts

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Date
Link

References

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