Thinking back while looking forward
2022 was a pivotal year for the video streaming industry. After a huge boom in demand for online video content in 2020 and 2021, while the world was locked down due to COVID-19, we now see many more services competing for eyeballs with vast content libraries, while demand has not followed that same super speedy trajectory in 2022. Yet, there is still a constant need for streaming video, served by well-known media and entertainment companies as well as eLearning, Faith, Social Media, Health and Fitness, and Gaming brands. This even applies to the corporate world, applications, and many more use cases within every industry that engage users with video.
It’s estimated that in 2022, the average viewer spent 150 minutes a day watching digital videos. Regarding this, I wouldn’t be surprised if TikTok and other social media platforms make up at least 100 minutes because it’s so easy to fall into a video reel rabbit hole and lose track of time.
2023’s hot topics
So online video consumption still growing, but what are the trends that will define video streaming in 2023?
We all know that video streaming is much more than what Netflix and Disney are up to, but it’s undeniable that they are the major players that define industry trends. One of the biggest stories of 2022 was when Netflix announced it would introduce an ad-supported tier to its business model, a significant move for the company that pioneered the SVOD business model. However, Netflix introduced its ad-supported tier at the right time as it faces increased competition and consumers who are currently scrutinizing every cost due to the looming global recession. While current Netflix subscribers are unlikely to switch to the ad-supported tier, this may convince consumers who are on the fence about having a Netflix subscription to sign up. Disney, and many others, have also decided to introduce an ad-supported tier, so we can expect advertising to be a massive trend in 2023, with an increased focus on delivering a high-quality viewing experience for both SVOD, AVOD, and hybrid monetization models. This is backed up by the findings in our latest Video Developer Report that a quarter of respondents see advertising as the area with the most opportunity for innovation over the next 12 months.
I am also excited to see the growing buzz around live streaming. While live streaming isn’t a new concept, once again, Netflix has brought the topic back into focus when it announced it would deliver its first live stream with Chris Rock’s upcoming comedy special. In addition, our Video Developer Report indicates that live streaming and low latency will be among the top priorities for video streaming companies next year.
While increasing top-line revenues and finding more eyeballs is a great way to answer the economic challenges we see in the world right now, companies will also be evaluating their costs closely, especially the ones related to streaming infrastructure, which is clearly shown in our recent report. I foresee there will be more efforts in making video streaming more efficient, using less bandwidth, and minimizing costs by adopting state-of-the-art compression and streaming technologies. Making the streaming infrastructure more efficient not only helps on the cost side but can also be a driver for better customer retention, as startup times, buffering, and stream errors benefit from this as well, which are some of the leading causes of users canceling their subscriptions.
On a slightly more technical note, I am excited about the future of AV1 in 2023. Netflix, Google, and Qualcomm announced support for AV1 in 2022, which is pretty huge, and we’re expecting AV1 adoption to double next year. At Bitmovin, we are huge advocates for AV1, which can be seen from our AV1 Hub, and we continue to improve our dedicated encoding support for it, so I am ready for this next-generation codec to finally take off!
Along with broadcasters and OTT platforms, we expect consumers to remain willing to pay for eLearning, health and fitness, gaming, and other subscriptions. With the current state of the global economy, more people are staying at home, so they want things to do at home to keep them entertained, healthy or allow them to upskill. This is a huge growth area for us, as our focus is ensuring developers at these companies, which are often smaller, can get their video streams up and running at speed and scale with solutions like Streams.
Daring to stream bigger in 2023
I am super excited and optimistic about the video streaming industry in 2023 and what’s in store for Bitmovin. 2022 saw us lay the foundation for our successes in 2023. We returned to in-person events in a big way, including NAB and IBC. We launched our Next-Generation VOD Encoder, Live Event Encoder, Playback, and Streams solutions, with tremendous success, and none of it would be possible without the amazing team of Bitmovers who constantly strive to be bold and innovative.
In 2023 and beyond, we intend to become synonymous with video streaming infrastructure and the go-to company for innovations in video streaming. It’s a bold ambition, but one we are on track to achieve because we are daring to stream bigger in 2023.
Until then, the team will enjoy some well-deserved downtime to recharge, so we are ready to take on 2023!
On behalf of everyone at Bitmovin, I’d like to wish you Happy Holidays and a healthy, prosperous, and happy new year.
