As consumers increasingly turn to online outlets to access the same content they once could only get from legacy TV providers, streaming of sports and other linear content is more mainstream now than ever before. For content providers, it is critical to understand how to protect this content and the revenue it represents.
Operators must first consider all the types of content involved, the format of the content, and the importance of preserving the viewing experience. The skill and sophistication of today’s pirates is also a factor. Finally, the popularity of viewing illegally streamed content creates a perfect storm of constantly shifting tactics–all aimed at defeating advances in content protection.
In this article, we’ll look at how this boom in live streaming is changing how people consume live events, forever altering the dynamics of the traditional content distribution model.
The growth in demand
According to a report from Conviva, the global volume of live streaming grew 32% between Q4 2018 and Q4 2019. While on-demand viewing still generates the most traffic, live streaming is predicted to surpass non-live traffic by 2024. Now, a growing number of content owners worldwide are maximizing their audience reach through a wide variety of OTT services that carry live streams, including:
- Free ad-supported and combination subscription/ad-supported packages from virtual multichannel video programming distributors (vMVPDs)
- A new crop of branded online outlets from legacy MVPDs
- Direct-to-consumer (D2C) services from the content owners themselves, including sports leagues that have mounted their own services in addition to licensing distribution to vMVPDs
The end result is a massive amount of content exposed to online theft, particularly if the content isn’t properly protected.
Per the figure below, subscription revenue generated globally by providers of live and VOD content will increase six-fold by 2023, rising to a cumulative $23.68 billion. But the biggest driver to revenue growth for these services will be advertising expenditures, which will generate $56 billion across all OTT services, including pure-ad play AVOD services, by 2024.
These subscription and ad revenue sums represent 50% of the $160-billion revenue total forecast for all OTT services, which also includes about $80 billion in subscription revenues from SVOD services that don’t offer live content.
The numbers reveal what’s at stake regarding piracy and live-streamed content, and they predate the pandemic, which is sure to force revisions. As noted by Goldman Sachs, the pandemic is causing an unprecedented acceleration in digital revenue, as ad dollars shift away from traditional TV.
The percentage of video viewing time going to OTT content is surging, too. Globally, viewers spend an average of 6.8 hours per week consuming OTT video, with the U.S. topping the national averages at 8.55 hours. In the U.S., consumers with OTT connections are now spending nearly one-fifth of their TV viewing time streaming content. And, at 24.41 minutes per average view, the time spent viewing live-streamed content is 27% higher than the average time spent viewing on-demand services.
How UHD/HDR is changing streaming
One of the biggest reasons why live streaming is becoming more popular is the advancements in picture quality that have been made in both display units and adaptive bitrate streaming technology. The proliferation of 4K UHD content capabilities, including high dynamic range (HDR) enhancements has dramatically improved consumers’ viewing experience and made streaming a much more viable threat to traditional cable-delivered formats.
The numbers support this trend. More than half of consumers in major markets such as the US, Japan, and the UK owned a smart TV by 2019, and 4K sets will account for 52% of TV shipments in 2020, at which point the vast majority of households in major markets will be watching TV on big displays.
This streaming capacity is bolstered by streaming media players (SMP) like Amazon and Roku, which plug straight into TV sets. As of 2018, more than half of the SMPs shipped in North America and Europe were equipped to support UHD, and improvements in the delivery framework for content have not gone unnoticed by more established streaming providers. Netflix and Amazon now offer nearly all of their self-produced content in UHD.
However, it is not just the big-budget OTT shows that are being provided in higher quality formats; linear content producers have also started to step into the fray. The number of TV network channels carrying UHD 4K content jumped from 70 worldwide in 2017 to over 250 in 2020.
Adding to the momentum, an increasing share of live sports content is now streamed in UHD 4K. Several NFL and English Premier League games were made available to streaming consumers in late 2019, and the 2020 Super Bowl was the first sports event to be streamed in 4K/HDR. Put on hold, for the time being, were 4K/UHD broadcasts of the Euro 2020 soccer championships and the 2020 Summer Olympics. Moreover, in 2019 fuboTV began beta testing what was billed as the most robust platform for streaming live sports.
The increase in demand and potential for live streaming and the fracturing of the traditional content delivery model means that companies looking to live stream content need an affordable and flexible digital rights management solution to keep their investments secure.
To find out more about the risks and opportunities of live streaming content and how it will affect your business over the short to medium-term, read our in-depth whitepaper here. And stay tuned for part two of this series, where we dive into the impact of piracy on sports and other live streaming services.