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Unlock your guides11.1 Streaming technology and business models
5 min read•july 30, 2024
Streaming technology has revolutionized how we consume TV and movies. From faster internet to smarter compression, these advancements have made it possible to watch high-quality video anytime, anywhere. The rise of adaptive streaming and cloud computing has further improved the viewing experience.
Streaming business models have evolved to meet diverse consumer needs. Subscription services like offer unlimited access, while ad-supported platforms provide free content. Live TV streaming and hybrid models combine elements of traditional and new media, reshaping how we engage with television.
Streaming technology advancements
Internet infrastructure and video compression
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- Broadband internet infrastructure development facilitated transmission of large video files
- Fiber-optic networks increased data transfer speeds
- High-speed wireless technologies (4G, 5G) enabled mobile streaming
- Video compression algorithms reduced file sizes while maintaining quality
- H.264 codec decreased requirements by up to 50%
- HEVC (H.265) further improved compression efficiency by 25-50%
- Content Delivery Networks distributed video across multiple servers
- Reduced latency and improved streaming quality for geographically dispersed users
- Major CDN providers (Akamai, Cloudflare) optimized content delivery
Adaptive streaming and cloud computing
- Adaptive bitrate streaming adjusted video quality based on connection and device
- Dynamically switched between different quality levels (240p, 480p, 720p, 1080p)
- Reduced buffering and improved user experience on varying network conditions
- Cloud computing advancements provided scalable infrastructure
- Amazon Web Services, Microsoft Azure offered flexible storage and processing power
- Enabled on-demand access to vast libraries of video content
- Smart devices created diverse ecosystem for high-quality video streaming
- Smartphones, tablets, smart TVs supported various streaming apps and protocols
- Game consoles (PlayStation, Xbox) integrated streaming capabilities
Digital rights management and user experience
- Digital rights management technologies enabled secure distribution of copyrighted material
- Widevine, PlayReady, FairPlay protected content from unauthorized access
- Allowed content providers to enforce licensing agreements across platforms
- and experience improvements enhanced streaming adoption
- Intuitive navigation and search functionality
- Personalized recommendations based on viewing history
- Cross-platform synchronization allowed seamless viewing across devices
- Resume playback feature maintained viewing progress across multiple devices
- Cloud-based user profiles stored preferences and watchlists
Streaming business models
Subscription-based models
- Subscription Video on Demand offered unlimited access for recurring fee
- Netflix provided ad-free streaming of entire content library
- focused on exclusive franchise content (Marvel, Star Wars)
- Tiered subscription plans catered to different user preferences
- Basic plans with limited features or lower video quality
- Premium plans with 4K streaming, multiple simultaneous streams
- Niche streaming services targeted specific genres or demographics
- Crunchyroll specialized in anime content
- BritBox focused on British television programs
Ad-supported and transactional models
- Advertising-based Video on Demand provided free content with advertisements
- Tubi offered large library of movies and TV shows with periodic ad breaks
- Pluto TV combined with linear-style channels
- Transactional Video on Demand allowed purchase or rental of individual titles
- iTunes enabled users to buy or rent movies and TV episodes
- Google Play provided similar functionality for Android devices
- Hybrid models combined elements of and AVOD
- Hulu offered ad-supported tier and ad-free premium tier
- Peacock provided free ad-supported tier, premium tier with limited ads, and ad-free tier
Live TV and freemium models
- Live TV streaming services provided access to linear television channels
- YouTube TV offered cloud DVR functionality and live sports coverage
- Sling TV provided flexible channel packages at lower cost than traditional cable
- Freemium models offered basic content for free with premium paid options
- YouTube provided free ad-supported videos with Premium subscription for ad-free viewing
- Spotify offered free music streaming with ads, Premium tier for ad-free listening and offline playback
Streaming impact on viewing habits
Binge-watching and on-demand access
- behavior became prevalent among streaming users
- Netflix released entire seasons simultaneously, encouraging marathon viewing sessions
- Viewers consumed multiple episodes or entire seasons in single sittings
- On-demand access shifted viewing patterns away from scheduled programming
- Users watched content at their convenience rather than adhering to broadcast schedules
- Time-shifting through cloud DVR services reduced importance of live viewing
- Personalization algorithms influenced viewer choices and content discovery
- Netflix's recommendation system accounted for 80% of content watched on the platform
- AI-driven suggestions based on viewing history and user preferences
Multi-device viewing and global content
- Multi-device viewing became common among streaming users
- Viewers expected seamless experiences across smartphones, tablets, smart TVs, and computers
- Cross-device synchronization allowed users to start on one device and continue on another
- Global content accessibility exposed viewers to international programming
- Netflix invested in local content production in various countries (Money Heist, Dark)
- Increased demand for diverse and multilingual content
- Short-form content platforms influenced attention spans and preferences
- TikTok's rapid growth demonstrated appetite for bite-sized video content
- Traditional streaming services experimented with shorter formats (Quibi, YouTube Shorts)
Social viewing and interactive content
- Social viewing experiences emerged in streaming platforms
- Netflix Party (now Teleparty) enabled synchronized viewing with chat functionality
- Twitch popularized live streaming with real-time audience interaction
- Interactive content blurred lines between passive viewing and active engagement
- Black Mirror: Bandersnatch allowed viewers to make choices affecting the story
- Trivia games and choose-your-own-adventure formats gained popularity
Streaming model sustainability
Content costs and market saturation
- Content production and acquisition costs rose dramatically
- Netflix spent $17 billion on content in 2020
- Disney+ invested heavily in original programming for Marvel and Star Wars franchises
- Market saturation and subscription fatigue emerged as concerns
- Average U.S. household subscribed to 3-4 streaming services in 2021
- Churn rates increased as users rotated between services for specific content
- AVOD models faced challenges balancing ad load with user experience
- Optimal ad frequency debated (e.g., 4-5 minutes per hour vs. traditional TV's 16 minutes)
- Competition with traditional television for advertising budgets intensified
Niche services and hybrid models
- Sustainability of niche streaming services depended on loyal subscriber base
- Crunchyroll maintained over 3 million subscribers by focusing on anime fans
- Shudder carved out horror niche with curated content and original productions
- Hybrid models combining subscription and advertising showed promise
- Hulu's tiered system provided flexibility for users and diverse revenue streams
- HBO Max planned ad-supported tier to complement premium offering
- Vertical integration became strategy for ensuring content supply
- Disney acquired 21st Century Fox to bolster content library for Disney+
- WarnerMedia merged with Discovery to create content powerhouse for HBO Max
Live TV streaming and technological advancements
- Long-term viability of live TV streaming tied to content deals and differentiation
- YouTube TV and Hulu + Live TV competed with traditional cable by offering cloud DVR and flexible packages
- Sports rights remained crucial for attracting and retaining subscribers
- Technological advancements continued to shape streaming landscape
- 5G networks promised to improve mobile streaming quality and reduce latency
- AI and machine learning enhanced content recommendations and user experiences
- Data analytics played increasing role in content production decisions
- Netflix used viewing data to inform development of original series and films
- Streaming platforms leveraged user behavior insights for targeted content acquisition
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