Five years ago, most of us were probably setting our DVRs for the latest episode of Lost, House or NCIS. Or, Heaven forbid you didn’t have a DVR, you had to make sure that you were home during Thursday night prime-time.
Well, it is now 2014 and those days are (thankfully) over, thanks to a little thing called Video Services on Connected TV.
Video services on connected TVs are provided by various websites that distribute online content provided by the content developers. These services enable users to order content online, without downloading it, to watch on their TVs.
Connected TVs allow viewers to access online content from their TVs without using their PCs or laptops, and the devices used for this purpose include gaming consoles, streaming devices, smart TVs, and STBs.
In short: Netflix!
In 2013, the Global Video Services on Connected TV Market grew at a whopping rate of 131.58 percent, and the market is expected to grow at a CAGR of 74.73 percent through until 2018. The market will grow at a high rate as more people are adopting the pattern of online content consumption on their TVs.
Competition Between Video Services and Cable Intensifies
In the US, the average cable bill is approximately US$90 per month, which gets you around 150 channels (give or take depending on the service provider). There are also a large number of pay-per-view channels offering movies to rent for between US$5-8 for 24 hours.
Recently, many cable providers have even stepped up their VOD game, offering hundreds of hours of programming on demand.
But it seems that putting up a fight against video services like Netflix and Hulu is futile.
TechNavio analysts look at some of the key factors driving the growth of the Global Video Services on Connected TV Market:
More Smart Devices Means More Streaming
Innovation in devices, tablets, smartphones and connected TVs has led to an increase in the demand for VOD in the market. This has not only increased the volume of data traffic, but it has also increased on demand content such as videos, movies, music, and TV shows. These devices also help service providers collect user data and understand user preferences.
The number of connected TVs grew at a rate of 18.70 percent over 2012 and reached 311 million units in 2013. The number of connected TVs is expected to more than double during the forecast period and reach 768 million units by 2018, growing at a CAGR of 19.82 percent. The increase in usage of connected TVs will drive the growth of the Video Services market on connected TVs.
Control Over Program Selection and Viewing Timings
Users will have access and more control over the selection of the program through the internet. VOD services offer users the flexibility of viewing their choice of programs at a time that is convenient to them.
Further, the content is free from interruptions from ads. With easy navigation to lists of content and prices, users can check the options that are available to them and find value for their money. Moreover, the services are available to customers 24 hours a day.
Lucrative Subscription Offers along with Price Discounts
With the increasing competition, service providers are continually revising their prices to attract users. They are focusing more on active content mix and enhancing personalized viewing experiences. By gathering user information from social media and other streaming sites, they are building user interest profile databases. This will not only help them serve consumers better, but also provide accurate advertising targets. In 2011, LoveFilm announced various subscription offers with low prices and content.
Increase in Multiple Digital Subscription Options
Advances in technology and digital distribution networks offer more convenience to users. As SVOD gains momentum, subscription schemes for varying periods are being introduced. In 2010 and 2011, LoveFilm and Netflix revised their monthly subscription fees several times to retain their market share in the competitive environment.
