The VOD and ISP market grows frantically
- May 19, 2020
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Social isolation and children out of schools, movies and series have allowed parents to work, children not to freak out, families to unite
If the growth prospects of the VOD market were already great in 2020, with the announced pandemic and social isolation imposed on the global community, the trend is that the year will be a milestone in the segment. Unfortunately for a complex reason, the confinement of many to avoid the incidence of cases of the pandemic, but a milestone.
With the world in social isolation and children out of schools, movies and series have allowed parents to work, children not to freak out, families to unite. If before the video had a status of fun, in these times it has become a necessity. The increase would be much greater even through the mutual aid network that the world has established. Many VOD companies have opened content for free to help parents, which we did too, even to help relieve the emotional tension that the moment is bringing. And with social help, the growth of video on demand is sure to be leveraged.
Research done before any sign of coronavirus already indicated growth of almost 30% in streaming services. The Consumer Technology Association projected that consumer video streaming spending in the US in 2020 would increase 29% from 2019, taking the market to a figure of $24.1 billion. Technavio presented research that indicated an incremental growth of $33 billion of the VOD market during 2018-2023.
And, if VOD in the world grows at rates of around 30%, the good news is that Brazil is able to grow even more, as the penetration of streaming services in relation to the proportion of population is still low here. And, along with the growth of VOD, there should be a boost for internet services from regional providers, the ISPs.
As we are a country with large territorial extensions, it will be almost instinctive for consumers to perceive the difference in internet quality at that moment. If the consumer used to use the internet little, now he needs a great connection to survive in a new pandemic context with home office. ISPs will have a unique competitive advantage and a key role for many more remote regions.
Now, companies and people more than ever depend on technology to keep their jobs and their businesses up and running. In our base of ISPs, today Watch has more than 160 regional providers as partners spread throughout Brazil, which bring together more than 500 thousand subscribers, of which about 300 thousand are already users of the Watch Brasil platform, which represents the great potential of video under demand among our customers.
The explosion of on-demand content had already been happening in the last year. The increase in own productions has a positive and negative impact on consumer behavior. According to a PwC study, 36% of streaming subscribers are motivated to subscribe to the channel by original exclusive content (research done before the pandemic). And, among the youngest (18 to 29 years old), the percentage who subscribed to streaming services with this motivation was even higher, 46%. Hence the increase in content productions.
This fight for content production is positive on the one hand and will benefit the production of films and series, increasing quality and options. On the other hand, it brings a feeling of frustration for not having all the contents in the same place. The many subscriptions and their most varied prices are among the main challenges of streaming in the near future. The market is very competitive and the consumer is price sensitive. Therefore, the chances of success should increase more the streamings with robust packages.
A survey by the TRH – Morning Consult Poll, published on the Hollywood Reporter website, indicates that consumers want platforms that offer packages of streaming services. Of adults, 33% are more likely to buy streams in bundled formats. Remembering, this data predates the pandemic. The pandemic scenario only increases the pressure. The challenges of the streaming market in this new scenario, now more than ever, go through trends such as reorganizing business models and making a series of partnerships to be able to offer more and more and bring added value with the maximum of exclusive content and varied in a single subscription.
Oh, and it will also be essential to offer robust technology for a better end-user experience, both from the broadband point of view (from ISPs, for example, or large operators), as well as from the application of data intelligence and more complete packages in a unique marketplace. We believe that all the streaming market forecasts that were taking slow steps will be accelerated in the face of the world pandemic scenario.
Photo: Maurício Almeida, CEO of WatchTV