The Rising Popularity of Streaming Video Services
Over the past decade, online streaming of video content has gone from a niche concept to the dominant form of digital media consumption. As internet speeds have increased globally and mobile devices have become ubiquitous, consumers have embraced the flexibility and convenience of streaming their favorite shows, movies, sports, and more from any device with an internet connection. Subscription video on demand (SVOD) services like Netflix, Hulu, and Disney+ have amassed hundreds of millions of paid subscribers worldwide by delivering large libraries of on-demand entertainment directly to consumers' screens. Meanwhile, platforms like YouTube have emerged as the de facto destination for user-generated videos and other short-form internet content.
Technology Advances Enable Streaming Video Growth
Underlying the rise of Video Streaming services have been revolutionary improvements in internet infrastructure and compression technologies. Widespread deployment of fiber networks and upgrades to cable and DSL speeds have enabled HD-quality streaming for tens of millions of households. Meanwhile, improvements to video encoding standards like H.264 AVC and subsequent generations have dramatically reduced the bandwidth needed to stream high-definition and even 4K resolution video without compromises to quality. Codecs developed by the Alliance for Open Media like AV1 promise even more bandwidth efficiencies, paving the way for widespread adoption of high-dynamic range and virtual/augmented reality streaming applications. Advances in cloud infrastructure have also allowed streaming platforms to distribute video globally through content delivery networks, making popular titles immediately available to huge audiences.
Rise of Mobile Viewing Transforms Streaming Habits
Another major driver of the streaming boom has been the emergence of video as a primary use of mobile internet connections. As smartphones and tablets proliferated in the 2010s, platforms optimized their apps and websites for smaller screens to capitalize on the opportunities for “away from home” viewing. Mobile viewing now accounts for over half of all streaming video consumption according to many reports. The ubiquity of mobile connections untethered audiences from their living rooms, transforming viewing into an activity that can be enjoyed virtually anytime, anywhere. Younger demographics in particular have come to prefer streaming media on phones and tablets versus traditional "appointment TV" watching.
Advertising Innovation Supports Free, Ad-Supported Models
To complement subscription offerings, major streaming services have also introduced and refined free, ad-supported video platforms. Enabled by advanced audience targeting tools, technologies like dynamic ad insertion allow for sponsorships and commercials to be stitched seamlessly into long-form streaming content. Multiple companies now offer programmatic advertising platforms tailored for streaming environments. These support more engaging ad formats like video pre-rolls and mid-rolls. Analytics also provide rich insights into viewing behaviors, enabling precise audience targeting. The monetization opportunities created by streaming video ads have given free streaming tiers and user-uploaded platforms a viable business model to complement subscription revenues. As a result, ad-supported streaming now commands its own massive global audiences.
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