How the pandemic has changed the streaming market


Unless you live in one of the roughly 78 million U.S. households still holding on to traditional cable or satellite TV, you’ve likely helped streaming continue to take off and become the predominant medium for content delivery and distribution. The pandemic’s onset in the United States and Canada in early 2020 gave virtually all streaming platforms a boost as people sheltered in place and sought new ways to keep themselves entertained.

Within the last year, however, discerning consumers faced with a dizzying array of options have zeroed in on which platforms work for them—and which don’t. In 2020, competition became much tougher in what was already a saturated market as more streaming platforms tried to carve out space for themselves in niche categories. The streaming ecosystem is more delineated now than ever; just within the last year, several powerhouses—including Apple TV+, Peacock and HBO Max—entered the streaming market.

According to a late 2019 Wall Street Journal-Harris Poll, Americans use, on average, 3.6 streaming services. That number has continued to rise as the streaming market broadens to include new models such as subscription video on demand, advertising video on demand (AVOD), transactional video on demand and now premium video on demand through Disney+ Premier Access, which allows people to watch movies for a limited amount of time. (Streaming trends in Canada tend to be similar to those in the United States, and “around 41 percent of Canadians use streaming TV services on a typical day,” according to a 2020 report from market data company Statista.)

This highly fragmented model has overwhelmed and confused consumers, but has, nevertheless, created opportunities—and challenges—for multichannel video programming distributors (MVPD) such as YouTube TV or over-the-top devices such as Apple TV, Roku and Amazon Fire. These companies now must figure out how to consolidate this market and monetize a product to allow for simplicity and one-stop shopping.

Fighting for your free time

To make matters even more complicated, video gaming and esports saw significant growth earlier in the COVID-19 pandemic as live sports temporarily paused and more athletes and sports fans resorted to playing video games during their free time. According to data from esports data analytics company Stream Hatchet, Twitch streaming hours nearly doubled in Q2, to 5 billion hours globally. Streaming platforms and services are not just competing against each other, they’re fighting for your free time as well.

What’s ahead for streaming?

The future of streaming is bright as it continues to be a primary platform and means of delivering content to our devices and homes. With so many options now, price has become a more significant factor to consumers; it’s why we’ve seen a rise in AVODs to help subsidize the cost to consumers. We expect this model will continue to grow in popularity, as AVODs such as Roku TV, Pluto TV and Crackle have proven with the growth of their subscribers.

The market saturation also means there is a large reaggregation opportunity for businesses in the streaming space. Consumers are overwhelmed; so the more consolidated and simplistic solutions there are, the more likely consumers will gravitate toward them. MVPDs have had significant declines in subscriptions over the last year, so we expect to see consolidation and bundling of services at a more affordable price.

Moreover, data and algorithmic models will be of increasing importance in the future. These models are what make or break a platform’s ability to entice the user to click on the next video, song or movie recommendation, keeping them engaged longer. These recommendation engines will be front and centre in the near term as a means to generate traffic.

Even though streaming is an oversaturated market, consumers won’t be turning away from it any time soon. Legacy media and traditional broadcasting companies need to understand the streaming space, and how these trends factor into their digital transformation journeys. With an ever-growing list of platforms competing for consumers’ free time, it’s crucial to consider how to capture and sustain consumers’ interest. Companies without a digital presence should examine what opportunities such platforms may afford them.


Victor Kao, Partner, Technology, Media and Telecommunications Senior Analyst

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