Video streaming services need to focus on cost for survival | Media Analysis | Business
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Despite skyrocketing video consumption due to Covid-19 driving consumers to stay home and consume streaming video services, the Bitmovin 2020/2021 Video Developer Report is warning that the party may be over for some operators as costs to satisfy demand take a similarly sharp rise.
Bitmovin 9Oct2020

The latest edition of the over-the-top (OTT) operations optimisation solutions provider’s annual survey was taken between 29 June and 9 August 2020. The number of participants in the survey and countries was said to represent and reflect the global surge in demand for streaming. Bitmovin surveyed a sample set of 792 video developers, industry experts, customers and prospects from 87 countries. Participation was up dramatically by 46% from 2019. Consistent with years past, demographics such as industry, company size, and job titles were predominantly in three key industry categories: broadcasters, integrators, and OTT streaming services.

Putting the 2020 report into context, Bitmovin said that while the Covid-19 pandemic and shelter-in-place requirements have accelerated global growth opportunities for the video streaming industry, it recognised this year has ushered in an unparalleled number of challenges and unique opportunities for all businesses within the video industry.

It showed the top challenge among respondents was reducing costs, replacing 2019’s top concern of complex technology such as ‘live low latency.” Bitmovin added that it made sense that “reducing cost” and “taking services and assets faster to market” are the top challenges in order to stay competitive. It needs to be seen if intensified competition might also lead to changing the business and pricing model as 2020 has certainly been a year unlike any other.

Despite the majority of participants holding technical roles, over 51% of respondents indicated that cost control for such things as bandwidth and storage is their biggest challenge. The results are clear that many in the industry believe that video streaming services need to focus on cost optimisation in order to survive. And underneath the widely reported vastly increased numbers of viewers streaming video and associated viewing hours, at the same time, given the uncertainty of the global business landscape, video providers are cautiously scaling back on new projects to control costs.

Another key finding was that many streaming media industry innovations were already in progress before Covid-19, but the crisis has sped up the adoption of some specific ones. For example, Bitmovin cites mastering live streaming as both a key challenge but also one of the key opportunity areas for innovation. It added that recommendation and personalisation will play an even great role moving forward, as developers are tasked with new ways of retaining viewers. Bitmovin believes that the industry can also expect “innovative” ways streaming services and providers find to put on compelling content, whether live sports, concerts, musicals or shows.

“As the streaming/OTT industry continues to rapidly expand, new challenges and opportunities will develop. Bitmovin is proud to be on the front-lines of the industry each day and this year’s study shows that even with growth there is a need for deep reflection on how money is spent and where to put assets and talent,” explained Bitmovin CEO Stefan Lederer explaining the findings of the Bitmovin 2020/2021 Video Developer Report .“In today’s Covid world, there is huge volatility that is accompanied by large demand. The industry players that best recognise the changing technological and financial landscape will be the ones to not only survive, but to thrive.”