DTC Streaming, OTT Aggregation, and AVOD: Key Trends in the EMEA Market

BlogMar 23, 2022

Don Howarth

In our webinar “Monetizing Video Content in EMEA Today,” SymphonyAI Media’s CEO Mark Moeder and 3Vision’s executive vice president Jack Davison explored the themes of D2C streaming, OTT aggregation, and AVOD trends. The presentation highlighted the need for media companies to leverage data. Here’s how these top OTT trends impact the EMEA video market, and what television networks, studios, and video streaming platforms can do to remain competitive in a complex and changing media landscape.

Studios Enter the Direct-to-Consumer Streaming Wars

U.S. studios continue to focus on funneling content into their own direct-to-consumer (DTC) services rather than licensing to third parties, with two-thirds of last season’s studio content debuting on their own services. Pipelines for both current and library titles are set to become increasingly unavailable to third parties, particularly for certain studios such as Disney, which vertically integrated 93% of their new show slate in 2021.

The latest figures suggest an ever more heated battle for subscribers in the current streaming wars. This creates a sense of urgency for media companies to be equipped with real-time insight into content performance and audience engagement.

Streaming services will likely have to work harder to acquire the latest premium content, approaching distributors they may not have engaged with in the past, especially for genres that have not previously appeared on their platform. Understanding audience affinity will be key to making the best decisions. The data driving these discussions will need to be delivered in a way that brings the most valuable insight to the forefront, without requiring decisionmakers to trawl through endless datasets.

OTT Aggregation Attracts Pay TV Operators

Pay TV operators are taking on the role of super aggregators for SVOD services, supplying their customers with a one-stop shop for all their content needs – often included in a pay TV subscription. Aggregators offer audiences more content options, while offsetting the loss in global pay TV revenues seen over the past four years. Without a change in strategy, pay TV revenues in North America alone are expected to drop by $16 billion over the next five years.

While the trends we have seen in the DTC space may imply that U.S. studios are less interested in engaging with international pay TV operators, they will hit an inevitable limit in subscriber growth without pay TV collaborators in the mix. Studios are likely to continue engaging with pay TV operators, the nature of those partnerships will change. Rather than licensing content or channels, pay TV operators will work to build competitive bundles that get their SVOD services into more hands, with longer subscriber commitments.

With content available and integrated across multiple platforms, it becomes tougher than ever to keep track of content performance. Not every company has the luxury of keeping an army of data scientists on staff to make sense of their content analytics. Platforms such as Revedia will be critical to automating insight, allowing decision-makers to take advantage of real-time data rather than lose time (and their competitive advantage) wrangling data across platforms.

AVOD Dominates Digital as FAST Gains Speed

AVOD continues to grow at a breakneck pace, with digital now taking a significant share of the ad market. Total global AVOD revenues are expected to reach $66.4 billion by 2026. Historically, AVOD has seen huge development going since its advent in the from of early platforms such as YouTube.

Social media platforms such as Facebook, Instagram, and TikTok are gaining huge growth with ad-supported video content. More recently, however, dedicated AVOD platforms such as IMDb TV and Tubi have gained market share, either commissioning their own original series or acquiring and licensing content.

Alongside both this historical and current activity, broadcasters’ digital catch-up services have acted as de facto AVOD platforms for episodic television and feature film. Broadcasters are responding to these new AVOD players, as well as the threat from subscription-based streamers, by boxsetting more of their content than ever on their own FAST channels.

Rather than let decisions be driven by headlines, organizations are driving with data. Equipped with the right technology, they can summon insight that informs strategic decisions, such as whether the short-term boxset boom is worth the risk of subscriber churn further down the line.

Data-Driven Insight Is a Competitive Differentiator

The need for data is obvious, but data has no value if media and entertainment organizations can’t make sense of how it uniquely affects their business. Automated data analysis levels the playing field, but technologies such as artificial intelligence (AI) and machine learning (ML) confer an unfair advantage.

The ability to understand audience engagement, content performance, and distribution platform revenue can steer businesses towards opportunities and away from threats. Technology is the most powerful tool for organizations seeking to extract value from their data and succeed in EMEA, or any global video market.

While the right software enables organizations to navigate today’s DTC streaming, OTT aggregation, and FAST/AVOD challenges, the media and entertainment landscape will rapidly shift in the next few years. A deep understanding of the industry’s nuances is critical to developing technologies that enable networks, studios, and streaming platforms to retain their competitive edge in the future.