Home Business Not Only YouTube: Future Expectations of the Streaming Platforms Market

Not Only YouTube: Future Expectations of the Streaming Platforms Market

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“Is there any life outside YouTube? Promising content platforms for promotion and monetization”, so provocative and tempting was named a report by Konstantin Kuznetsov, representing the agency Dialla and the portal Reklamaster, presented at the conference devoted to the achievements and prospects of digital projects within Ukrainian Tele-Com Festival “UATF”.

Today, no one would challenge the leadership of YouTube in the streaming video segment, since this platform accounts for a monthly audience of one million viewers and is probably a kind of symbol of present segment. And Konstantin’s speech was preceded by several short reports devoted to the current situation on YouTube, as well as to the opportunities of launching, developing, and monetizing own channels on it. However, the leader is the leader to show a clear, efficient, and stable operation, which everybody gets well acquainted with.

However, YouTube is not the only player in the fast and dynamic streaming media market. The market, a full understanding of which requires knowing and seeing the whole picture in its riot of colors and hues brought by one or another player. At the same time, everything that happens with other market players, their strategies and techniques of competing for the audience and their possible surprises for us in the near future, are likely to be even more interesting than the situation with the recognized leader. That was the point along with the platforms, which the Western companies gradually start using, that were offered by Konstantin Kuznetsov to discuss with the audience.

To start, Konstantin Kuznetsov presented some statistics, enabling to understand the current balance on the streaming video market. It would seem that it is quite simple. The market leader Youtube has about one billion views per month. At the same time, the Hulu platform can boast of 12 million views, Netflix of 70 million views, and Vimeo of 170 million views. As is obvious, the second-ranked platform Vimeo and Youtube have a huge audience gap, so let alone Hulu, for example.

At that, according to the speaker, there is no saying that Youtube skimmed the cream off thanks to be the first on the market, since other platforms were also launched and developed alongside Youtube. Youtube administration, just managed adopting the best strategy (at least, at that moment) in due time to gain the lead. And the support of the search giant like Google rendered a considerable help to the platform. For the time being, Youtube is 100 hours of video uploaded every minute to the network, this is a greater number of US viewers aged 18 to 34 years than any cable network of the country has, this is 6 billion hours of video watched monthly.

But despite the undisputed leadership of Youtube on the market, an active motion goes on. What is the reason for it? Why does the Hulu Cartel keep on operating, notwithstanding that it is losing out to Youtube and other competitive studios? Why does the Amazon Unbox (2006), also known as Amazon VoD aka Amazon Instant Video, rush into competitive war with Netflix once again? And why does the recently launched Amazon Video Direct project plan to grant USD 75.000 to the best content providers starting from 2016? The reason is quite simple, the market goes on growing and developing, there appear new technologies like 4K, 8K, and so on, so each company tries to find own niche in this bustling sea, or to do something innovative and useful for its audience before it is done by competitors.

Let us take an example of Vimeo. The company has been operating on the market for a long time, and in spite of significant (hundreds of times) gap with the leader, it, according to Konstantin Kuznetsov, managed to find own niche and conquer own audience. As well as it offered own monetization model effective for several years. How do they contrast with Youtube? Earning decent money from advertising on own Youtube channel requires both investment in hardware and software, creative approach, as well as 2-2.5 million views per month. And this is regardless of the category of audience of that channel or its focus. Vimeo, in turn, offers to sell content to the audience through its platform.

Own monetization models are applied by Netflix, Amazon and other market players. But why are they fighting for a place in the sun? What makes them tick?

According to statistics, today in the US, the services of platforms providing access to video on demand are enjoyed by near 100 million people. In 2017, their number is expected to grow by 25%, and in 2020, it will double. It is also expected the data traffic growth in the SVOD segment. If in 2015 it amounted to 2 exabytes, so before the end of this year it will exceed 3.5 exabytes, and in the coming year it will increase up to 6 exabytes, in 2018, up to 10 exabytes, and by 2020 it is expected to double once again. There appear new formats, new standards, and new models of working with audiences, followed by growing figures! According to the forecasts of some sources, the global streaming video market will reach USD 100 billion by 2020! Today, it is about USD 30 billion. However, with increased audience, advertising market, and other indicators, as well as aggravated competition on this market, the average revenue per user will drop.

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Accordingly, Konstantin Kuznetsov pointed out that in order to stay afloat with regular income, the companies operating in this segment would require a totally new marketing strategy. And the companies start moving slowly towards this new strategy, which essentially means backing to basics.

The YouTube platform, while conquering market, had one great initial advantage, i.e. it was purchased by Google, which played stakes on data search online. Having achieved some success in this area, Google also decided to focus on the data storage, which, as we understand, is quite expensive. And the only company in the world that can come near Google in terms of capabilities in this area, investment and engineering capacity, as well as capitalization is Amazon.

However in general, all the platforms have much the same strategy. All of them invest in new channels, new tools, but at the same time, as Konstantin Kuznetsov remarks, they also invest in communications, advertising, attracting new audiences and gaining users from other platforms. They also run tools that allow them to monetize indirectly. Thus, one can say that all market players apply the model AIDA (S) (Attention, Interest, Desire, and Action, often completed with Satisfaction). This model is far from new, but it works, and the Western companies are increasingly resorting to new communication means.

However, Facebook, which is, in fact, site №2 after Google, can also afford another model to attract audiences. At the same time, it can not be ruled out that Facebook would outrank Google on popularity, i.e. there are observed certain trends of this situation. Accordingly, Facebook can slowly accumulate video and test different monetization options now. And, perhaps, we will see in time an independent project like Facebook Video. We can also remember Snapchat, Perescope, as well as Instagram (750 thousand users in Ukraine, starting from scratch, in 2011-2012).

Of course, as noted by Konstantin Kuznetsov, is too early to speak of the prospects of the same Snapchat, there is actually no official statistics regarding this service in Ukraine (as the speaker remarks, he can only rely on own subjective statistics, according to which the platform is used by near 3% of friends from his phone book). Same deal with Amazon, just making first steps in this segment, and that is on the US market. However again, according to Konstantin Kuznetsov, Snapchat is a real platform with pretty good potential and prospects. In fact, different platforms apply and always applied a variety of tools.

At that, according to the consulting company L2, the market will experience more and more rapid changes in the future. Competition increases, some brands withdraw into the shadows, and others die out at all to be replaced with others. Moreover, as the speaker remarked half-jokingly, the market also expects a striking change of managers, experts and other promoters of this business. The experienced but “hung up” in the past people will be substituted with the “Generation Y”, which is objectively well-versed in the realities and the world of advanced technologies. After all, there is nothing unusual in this process. As pointed out by the media expert Alexander Glushchenko who joined the discussion, we had long been observing similar trends on the mobile phone market, dominated by Nokia, which then was pushed out of leading positions by competitors, almost immediately followed by the next coming ones. And then the process of changing market leader grew and developed incrementally. Similar trends, according to Mr. Glushchenko, would affect the streaming video market. If, for example, in the near future, Amazon manages pushing YouTube out of its leader’s podium, it is far from certain that it would keep this podium for a long time, and it is likely to be replaced very soon with another new leader.

Konstantin Kuznetsov agreed with this comparison, underlining that everything is good in its season. And he mentioned again Snapchat and Periscope, which are not very popular in Ukraine, and generally in Europe. But one never knows. Therefore, for example, many Western companies even employ special people who are responsible for selling products and services, which, in fact, hit the market a few years later. Today, many leading Western companies (specifically Red Bull, Universal, National Geographic and many others), shaping their brand promotion strategies, lay a rather important emphasis on Snapchat and Periscope.

That is why the speaker decided to tell a little more about Snapchat, so that the audience would get a bit more understanding of the contrast between what was happening in that field in our country, and in the West. So, Snapchat is actually 10 billion video views per day. Its frequent audience totals 100 million users. The only thing that, according to the speaker, the company does not show in statistics, is the fact whether these views are the video ones from the beginning to the end, or it is just simply pressing the “play” button.

Snapchat realizes its need for finding new audiences, as well as its need for making money and monetizing content. The same principles guide the companies that start cooperating with Snapchat in the field of promotion and advertising of their content through this platform. That is, in fact, Snapchat is actually a platform for monetizing someone else’s videos. And thus, the company’s prospects look very optimistic.

It should be emphasized that the fundamental difference between the operation principles of Snapchat (as, for the record, Periscope) and YouTube is that videos uploaded to YouTube can be stored there, figuratively saying, for centuries (since Google data storage facilities allow for doing it), and the videos uploaded to Snapchat or Periscope “live” in the network only for one day to be removed then. That is, while YouTube provides for earning from once unloaded video for a long time, so those ones posted on Snapchat and Periscope are not deposited or stored at all, just remaining available for 24 hours. However, Snapchat permits to comment on the video, to share it with friends, to discuss it and express opinions. And this model of working with content has its “customers”, as the number of advertisers coming to Snapchat grows and, respectively, the company’s capitalization and value go up.

At the same time, Amazon tries to copy YouTube strategies to a greater or lesser extent. However, this approach does not yield it desired results, i.e the company has repeatedly changed the names of own streaming projects, adjusted their operation principles, but, according to the speaker, in fact, it goes around in circles. YouTube’s positions in the occupied niche are quite strong and, according to Konstantin Kuznetsov, barring any disaster, this situation may still persist for a long time. Facebook, to some extent, is also trying to adopt the model of YouTube strategy. In the meanwhile, Snapchat and Periscope just go on growing due to using other models and conquering popularity among the “Generation Y”. And the result is not late in coming, i.e. some Western brands and celebrities can already boast of running very successful promotional campaigns in Snapchat. Snapchat itself, just having a four-year history, managed leaving behind most of social platforms, thanks to the above featured and its openness to innovative solutions.

Therefore, the speaker recommends starting to discover Snapchat even now. It is quite easy to download and install a corresponding application on mobile device, and after that the software will check over the phone book the friends using Snapchat. And then you will be able to view your targeted content (truly speaking, this is mainly US content) and discuss it with your friends. That is, according to some people, it does not look like YouTube, but rather Facebook or Viber.

In the future, according to the speaker, we can also expect targeting or location-based features in Snapchat, which will boost its popularity among the companies interested in promoting their content. Therefore, it is necessary to hurry up; otherwise when Snapchat finally and officially enters Ukraine in active search for content providers, you just can be missed.

So, which are the future expectations of the streaming media market in Ukraine? What is its further development? In what areas? Konstantin Kuznetsov feels optimistic about the future. However, to wait for this very “bright future” and meet it head-on, it is still required to apply certain tools and the right strategies.

First, Konstantin Kuznetsov recommends that all market players would apply advanced promotional tools. Apply them, even if the monetization does not seem so obvious at first glance. For sure, it is no good forgetting about the need to stay tuned for various innovative processes and to size thoroughly up the new promising platforms and tools in terms of future. Thus, if you are not a pioneer, so you will be left behind by others who are more ambitious, decisive and open to changes. The same Snapchat will sooner or later become popular in our country. And, perhaps, you will be the first company to open the door for successful use of this platform in Ukraine. Finally, the speaker advised market players to unite and cooperate, trivial as it sounds. All in all, it can not be ruled out that this union might result in giving birth to a new social platform in Ukraine, which would replicate the success of its foreign analogues.

Konstantin Kuznetsov’s lecture evoked quite an active response of the audience, followed by a short discussion, which sometimes went beyond the presentation topic. In particular, the audience stated that an important role in shaping image of a platform and creating its success story is played not only by hardware and software, peculiarities of legislation, or promotional tools, but also the very quality of hosted content, and the general platform audience. There is no secret that, namely in recent years, the network gets a lot of highly questionable content.

However, this line of discussion led to one but rather important conclusion. In fact there is nothing new. Different audiences have always existed. Some people read classic literature, visiting museums and libraries, and some people told jokes on the back-street. Just if we could not see or heard back-street talks before, so today, thanks to advanced technology, this back-street went online and public. Thus, the social platforms and social media became an integral part of the today’s society, its mirror reflecting a snapshot of the same society. And, accordingly, it depends on us, as a part of society, what kind of social media to have, because we and our future generations are to create future, as Konstantin Kuznetsov summarized.