Internet-delivered video more than doubled (+114%) in the first quarter of 2018 versus same period last year, according to a report by Conviva.
These types of stats are indicative of the opportunity for providers in edge markets/close to underserved population centers. Over-The-Top (OTT) video is being embraced by the mass market, so internet infrastructure providers are positioning to aide in delivering consistent, quality experiences.
So which streaming services are really picking up steam? Apple TV Viewership was up a staggering 709% year over year, according to the report. Indicative of explosive growth, Roku’s streaming hours up 87% Y/Y wasn’t enough growth to prevent a 3% decline Y/Y in overall viewing hour market share. That is insane exponential growth – almost double the viewing hours still means a reduced piece of the overall pie by a couple of percentage points.
Apple TV’s growth makes it look like a prime whale of a customer for infrastructure providers – sort of. I wouldn’t call Apple TV the best customer opportunity, as it (and several other services) have reached critical mass prompting disintermediation in the delivery chain. In plain English: a few years ago, Apple was big enough to cut out third party content delivery networks (CDNs) and build its own in-house. The economics of the service reached a point where owning that part of the delivery chain just made sense. Apple still leverages several third-party providers in its infrastructure plans. If those provider bills are growing astronomically in conjunction with the OTT business, Apple becomes a prime candidate for bringing whatever pieces it can in-house.
However, the streaming platform landscape remains fragmented, as content on offer remains fragmented. Even aggregation platforms like Roku, AppleTV, Amazon Video and others often involve purchasing several disparate channels and services within. Anyone who has died a slow credit death via $4.99 and $9.99 a month charges can tell you that. The providers call app-based plays the “Appification of TV”. Cute.
In terms of regional growth, Conviva finds North America experiencing the largest increase – a staggering 174% growth in viewing hours over same period last year.
As for interesting, noteworthy stats outside of growth, the biggest improvement Y/Y was the drop in the number of videos failing to start. The global percentage of start fails was 2.34%, half of what it was last year. Annoying inconveniences like video launch failures make consumers finicky when it comes to paying for a streaming service. The low price monthly subscription model is a double-edged sword; customers can leave just as easily as sign up (as they should be capable of doing).
The average bit-rate for streaming video reached nearly 4 megabits per second on average across all devices – a 29% improvement over the same period last year. Bottom line: more data is moving across the pipes, end users are being acclimated to superior experiences across all devices, meaning ample opportunity for providers to message to and capture some of this OTT business. Everyone needs an OTT-specific customer strategy emphasizing the value brought in terms of delivering fast, consistent experiences across a wealth of devices and to population centers.
The Conviva report is one of many of what I like to call “Grain of Salt” reports. Any report provided by a company that stands to gain from crazy growth on the part of customers has a tendency to “juice” the results. Taken individually, these reports need to be taken with a grain of salt. Taken in context of several reports all touting astronomical growth in OTT, and these reports are fuel to the fire.
The full Conviva report is here. For those executives who only like to read spiffy bars with insane growth numbers, Conviva also provides infographics in the report.