Now Streaming to a Screen Near You

If we ever need proof that the digital medium is meant for a highly personalized audience and experience, we now have it in streaming of media and entertainment. The likes of Netflix, Amazon and Spotify have changed the entertainment landscape forever with on-demand video and music tailored to our specific tastes wherever we might be.

It is the internet that has made this possible. It is also the convergence in media and technologies that is allowing for such a fast-changing industry. And mobile broadband, with the possibility of even better and faster service with 5G technology makes this an exciting space to watch.

Right now, however, it appears that it is the additional revenue stream that is attracting new players to this industry. Which is why we have everybody, from media and entertainment companies to device makers and telecom service providers all flocking in, vying for a share of the pie. No doubt, they are also helping to grow the pie itself, but the fact is that the industry itself is in a state of flux and rapid change.

Nowhere is that more apparent than in the US, where cord-cutting is on the rise and Pay TV is becoming a thing of the past. Kevin Westcott of Deloitte Consulting LLP says in this report on the media and entertainment industry outlook, that 55% of US households now subscribe to paid video streaming services and nearly half (48%) of all US consumers streamed TV content daily or weekly, in 2017. At the same time, you have telecom companies such us AT&T snapping up Warner Cable when cable is nearing its demise, only for its media and entertainment assets. Everyone is only talking about content creation and delivering fresh content to consumers’ screens when and where they want it. And while Netflix and Amazon Prime are the giants in OTT video streaming, Disney has now launched a competitively priced streaming service and Apple has announced the launch of their video service, Apple TV+.

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Video on Demand is the way of the future; Image: Clay Banks on Unsplash

According to Statista, the SVoD (Streaming Video on Demand) industry is forecast to touch US$ 24.83 billion in 2019, registering a growth of 8% year on year. In terms of numbers of users, it is likely to reach 1.07 billion people at a growth of 5% year over year. This article from Forbes quotes a report from PriceWaterHouse that says that US OTT video will grow at the rate of 8.8% to reach US$ 30.6 billion, by 2022. And according to an EY study, quoted in this article from The Week, India’s OTT platform will reach 500 million viewers next year, making India the biggest market after the US. I think those numbers might be unrealistic and they also do not take into account the market in China, since it is closed to international players.

That said, it is true that from the US to Asia-Pacific and to a smaller extent, India, video streaming is threatening Pay TV. This has huge implications, not just for the future of the film and television industry, but for the advertising industry as well. Both Netflix and Amazon Prime are based on a subscription model, and are known to be relatively ad-free which, as it turns out, is a huge draw for viewers. And right now, subscription plans have yet to segment the market, by type of viewer, content (vernacular or English as well as genre), and price.

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Original content rules the day; Image: Charles on Unsplash

In India, for example, Hotstar (the video streaming service from Star TV network that is now owned by Disney) is the biggest player and the most popular. Around 80% of its content is said to be free, which explains its popularity in a price-sensitive market like India. As The Economist says in this article, the economics of Netflix in the US doesn’t quite work in India. It now appears that Netflix might have to start considering advertising on its streaming service even in the US, according to this report from CNBC. Free streaming on Hotstar also allows viewers in India the flexibility to watch content from several providers, instead of getting tied down to one subscription package and one type of content. You could, say, watch a TV show or soap opera on Hotstar and also be able to watch a particular cricket series on SonyLiv, or vice versa.

Speaking of Sony, it is one company that has not yet made its foray into streaming video or music as a new service internationally. Which is a pity, because that is where the industry is headed. I have always believed that Sony should have started thinking of themselves as a media and entertainment company, and not merely as a maker of consumer electronics. They have had the benefit of some amazing content, both in film and in music, ever since the 1980s, when Sony acquired CBS Corporation in the US. They should have capitalized on that, anticipated the growth of the smartphone and convergence, and rode the wave of content-based media consumption.

In addition, and separately, Sony is also a leader in the gaming business. It is sad that they not only missed the media and content bus, they are likely to miss the streaming bus too if they don’t decide to join the “stream” soon. In India, they have started their streaming service, but they are still quite a distance behind the likes of Hotstar, Netflix and Amazon Prime. What’s more, unless they push the development of original content, they are unlikely to make much of an impact by just streaming their current TV programming.

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Music industry seeing a revival; Image:

In India, there are several other important companies that have entered the OTT video space. Balaji Films’ Ekta Kapoor has started ALT Balaji which produces original content for video streaming and with her credentials in the television entertainment business, ALT Balaji will be a company to watch. The other big company to watch is Reliance’s JioCinema. Reliance, interestingly, is the only company on the Indian scene so far to be in the media, telecom and devices space. The company already owns several media channels, is behind some of India’s most ambitious broadband network plans and has deep pockets. If their aggressive performance in the mobile service is an indicator, we can be sure that they will compete aggressively in the video-streaming media and entertainment industry as well. Besides, they can adopt a similar pricing strategy as their mobile service; JioCinema is already streaming video free to all their mobile subscribers.

It’s not as if it’s video alone that is experiencing a renaissance. Music too is seeing something of a revival. And it too has gone though much flux and change. From the days of internet radio and services like Pandora, to audio streaming services like the hugely successful Swedish company, Spotify, and Apple Music, the music industry is being revolutionized. It is also believed that after almost 15 drought years for the music industry, it is experiencing a period of revival in the digital internet era, especially with music streaming and downloads. But, as this article in Forbes warns us, it is still too early to say if the streaming services will help the music industry out of the woods. Anyhow, as of 2017, the music industry’s total revenues touched US$ 17.3 billion, with 38% of it coming from streaming. You can retrace 40 years of the global music industry’s evolution in this article from the World Economic Forum.

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Browse and stream music whenever, wherever; Image: Heidi Sandstrom on Unsplash

In India, the music industry has been growing at a rapid rate through streaming services for the past many years. Here, the biggest companies are Hungama, Gaana (owned by Times Internet) and JioSaavn (launched in end 2018 as a subsidiary of Reliance Jio). They all specialize in local film music in several Indian languages and in Hindi, featuring Bollywood music. Many of these companies are recipients of funding from foreign investors, especially Chinese internet and telecom giants; Xiaomi is funding Hungama and Tencent is an investor in Times’s Gaana. Now, at the start of 2019, we saw Spotify launch its streaming service in India and it notched up a million new users in less than a week.

It is clear that companies see India as a huge market for video and music streaming services, especially since India is known to have a thriving film and music industry and Indians are crazy about song, dance and melodrama. With the corporatization of the entertainment industry in India which began at the start of this millennium, the circle is now complete with digitization. That would be music to the ears of anyone who loves music and films.

I can foresee resistance over perceived “culture wars” in the future from some quarters. And while I admit that I haven’t yet watched or listened to any streaming media, I welcome the change wholeheartedly. Streaming opens access to many kinds of new musical and cinematic influences for millions of people, and so we must let the stream flow. Let it flow, let it flow.

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