New Streaming Services by Apple and Disney Show The Importance Of Making Content Downloadable
While OTT viewership is on the rise, the number of streaming providers is also skyrocketing with Disney, Apple, WarnerMedia and many others launching platforms later this year. With competition as fierce as ever, and costs for content creation and licensing so high, OTT providers can’t afford to leave any monetization stone unturned.
To thrive in such a competitive environment, streaming companies need to ensure that they are providing a user experience that not only meets, but exceeds viewers’ expectations. With so many streaming apps in the market, users will have no problem ditching one service that plagues them with annoyances like buffering for one that offers a seamless experience. It’s impossible that every service will survive the long haul, and users will decide which video providers continue to reap the benefits of the growing OTT market.
One feature that promises to solve the most pressing issues faced by users, while also giving streaming providers new revenue opportunities, is mobile video downloads. Many of the common problems encountered by viewers are the result of connectivity issues, especially on mobile. Globally, many viewers are plagued by problematic cellular connections that can’t support their on-demand video needs. Studies show that viewers are increasingly impatient, and the lag or buffering that results from insufficient connectivity can create an intolerable user experience.
Some companies believe that 5G cellular technology will be a solution to these types of viewership issues. Just like 4G before it, 5G promises to be the holy grail of the mobile experience that solves users connectivity problems. However, 5G won’t be a solution in all situations. Not only will its eventual rollout be slow, especially in many places around the world, but it won’t be able to solve for simultaneous advances being made in video quality. Even when 5G ultimately comes about, there will still be an increased load on networks, especially as higher bitrates come about. Download, though, actually solves many QoE viewership issues by allowing users to download videos to their device when they have a great connection, so they can watch when connectivity is poor or nonexistent.
Yet download is more than just a way to make video viewing less frustrating for end users. It also presents an enormous revenue opportunity for providers. Of course, for SVOD providers, a feature like download increases engagement and reduces churn, which is a huge business win. But for AVOD providers, there’s an even more direct benefit of download: the monetization of downloads. Attaching dynamic ads to downloaded video gives ad-supported video providers a new way to reach viewers who otherwise couldn’t engage with content—and that means an increase of ad dollars.
When offline, AVOD viewers lose the ability to watch ad-supported content, which currently requires a wifi or cellular connection to view. That means millions of viewers can’t engage with AVOD companies at times when they would otherwise be watching video in high volume: on planes, commuting, on vacation, and other areas that have poor Internet service. With download, though, viewers can anticipate these moments and have content ready to view seamlessly when they’re on the go. And that means video providers can catch extra ad dollars that were previously unavailable.
Hypothetically speaking, if an AVOD service has 10M subscribers and 25% of them download one 30 minute video per month, with an average ad load of five ads per show, at a CPM rate of $20, that’s an additional $250,000 in ad revenue per month. And that’s with only 25% of the users utilizing the download option, and I think it would be much higher than that. In fact If you increased the usage of download activity to 1 hour per week, the revenue opportunity would be $2 million per month or $25 mil per year.
The business benefits of download can’t be overstated. Every downloaded video is new engagement earned, loyalty gained, and dollars won. Hulu has teased a potential rollout of ad-supported download feature in the past, but so far the AVOD industry has failed to prioritize this lucrative solution to lost viewership. Without ad-supported download, AVOD providers are leaving money on the table every day. And this holds true across the entire video streaming industry. Without features like download, providers risk losing views and subscribers to the services who allow viewers to watch whenever and wherever they want.