3 Video Trends to Watch in 2022

It’s becoming an annual tradition for me to write about the state of the industry, as well as sharing some thoughts about the year to come. We’re not yet out of the pandemic, but at the same time, the OTT tailwinds persist, which will continue to add fuel to the industry growth. That seems like a given, but how will the industry continue to evolve?

The trends I discussed a year ago are certainly still applicable. In particular, the strong trend for AVOD business models and how this impacts the industry is as relevant now as it was last year. However, to provide a different perspective, I’d like to discuss a couple of new trends ahead of 2022.

Finding a new role for the operator

The operator has traditionally existed for two reasons. First, to ensure service quality and second to manage customer relationships, such as billing and customer service. With OTT services, media companies can handle most of those challenges themselves and, other than Internet provision, they don’t really need the operators to be able to deliver video services. It’s no wonder that TV operators have struggled to find a new purpose over the past ten years. Their slow demise has almost been seen as a given.

That being said, I think we’re seeing the first signs of a new role for the operator, which is one that will only become more important in a constantly evolving OTT ecosystem, and that’s the role of the “master aggregator”. Consumers are confused about the plethora of offerings that are available to them, and while they might be interested in consuming more content, the hurdle of navigating between an ever-growing number of different video services is simply too much for large parts of the audience. Operators can be a trusted source of information, and can also provide a route between these services and the consumers, thus bringing value to both sides. With this approach, the operators can also make themselves relevant in a future multi-service context. While revenue streams will be comparably low compared to what they’ve seen historically, they will retain the all-important customer relationships, which can be used for monetization in other ways.

There are many challenges and temptations for the operators when embracing this new role. First and foremost, if the operator overstates its role and tries to capture a significant revenue share, like the channel reseller margins from the past, it’s clear that it will struggle to get a critical mass of OTT providers joining its platform. Second, it’s also tempting to want to control all the usage data, which is again something that will be difficult for the OTT providers to swallow. Instead, the operator focus should be on the overarching cross-service video consumption behavior, which, coupled with demographic data based on billing relations, will create a unique data set. This will prove very valuable going forward.

As we move into 2022, it seems like an increasing number of operators have come to the same conclusion regarding their role in the industry. Many are investing in becoming a forward-leaning, modern aggregator, focused on providing value to their content and service partners, as well as to the end consumer. At Accedo, we’re proud to be helping our customers on this transformative journey.

Expanding media offerings into the metaverse

In Accedo’s latest market survey, a whopping 75% of the respondents said that AR/VR would be important for their OTT services in the coming two years. It’s still early days, but 2021 has given us clear signals that the market is really taking off, opening up growth opportunities for any OTT video provider.

First, I believe that Facebook’s rebranding to Meta, coupled with its willingness to put investments into this area, will be like an energy jolt to the market. Meta is seeing trends in a 10-15 year perspective, and if you have that investment horizon, coupled with an extremely cash generative core business, we’ll see some very interesting developments over the coming two years.

Second, we are seeing very rapid developments on the device side. Compared to the first generation devices which were clunky and not consumer friendly, the latest generation is sleek, making use of 5G mobile technologies and more mature software stacks. As an example, Accedo has partnered with Nreal, an augmented reality device maker, whose latest set of devices offers an ability to stream high-quality video directly into the glasses. This opens up a new avenue of distribution for any OTT video provider. We’ll keep you posted on more about this in 2022.

Finally, we’re continuing to see examples of innovation and creativity, leading to new use cases that leverage this technology. From a video-centric perspective, it is clear that content is a key driving force in yielding high usage. One particular example is sports, where loyal fans are always looking for more ways to engage with a favorite sport, teams, or players. Extending the experience outside the core video environment will create new ways to entertain and engage, and has the capacity to transform the way we consume content over the coming years.

Hybrid OTT business models

As the OTT market matures, there is an increased focus on monetization. At the same time, it’s also clear that not all consumers would like to spend a lot of money on a subscription offering. It’s equally clear that some will be annoyed with a full advertising funded service. Instead, we’re starting to see hybrid models, where lower subscription fees are coupled with advertising, or potentially a lower ad-funded service tier with selected content.

The thinking is that it’s essential to establish consumer relationships early on to drive additional revenue streams over time as service loyalty and usage are built up. This will require improved system support as well as a thorough understanding of consumer behavior. Service providers need to understand behavioral trends from different consumer groups. What is the underlying reason for someone desiring a hybrid business model? Are they open to upgrading after a short period of time, or would it be better to keep them on the lower tier? Is it possible to upsell other things to them?

I believe that companies that spend the time to learn more about consumers’ behavior have a better chance of finding suitable offerings for each individual customer, thus making sure users are more happy, lowering churn as well as ensuring strong underlying revenue streams. At Accedo, we’re excited to be partnering with Jump TV, one of the leading companies in this area, and together we can support our customers on their journey to really understand consumer behavior.

To summarize, as we head into 2022, the OTT market is thriving and innovation investments are increasing, whether it’s in technology or new business models. I’m excited to see how this will impact the market.

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