Report: Ad opportunities to drive streaming industry growth
January 22, 2024
The latest Video Developer Report from streaming infrastructure provider Bitmovin reflects a turbulent economic year for the industry but one that is primed to seize many opportunities for growth in 2024.
Opportunities and challenges
This year’s Video Developer Report saw advertising (36 per cent) identified as the greatest opportunity for growth by video developers. Additionally, the research showed that advertising/AVoD is the top monetisation model for 56 per cent of respondents, and FAST is the priority for 39 per cent, up from 40 per cent and 26 per cent, respectively. Regarding advertising technologies, Server-Side Ad Insertion is used by 67 per cent of respondents and Client-Side ad insertion is used by 51 per cent, up from 55 per cent and 44 per cent in the previous year.
The second biggest opportunity for video developers is AI-generated content and video enhancements at (32 per cent), followed by low latency at (31 per cent). Ad insertion was also said to be the greatest challenge (33 per cent) for video developers in 2023, revealing that the opportunity advertising presents is not so simple to achieve.
The second most significant challenge faced by video developers was controlling costs (29 per cent), which is unsurprising considering macroeconomic circumstances; the third biggest challenge is playback on all devices (26 per cent).
“After a challenging year, 2024 could see the video streaming industry have a renewed focus on growth, which is reflected in the jump advertising has made as the greatest opportunity for video developers, the fact AVoD is the top monetisation model and the increased usage in advertising technologies,” notes Stefan Lederer, CEO & co-founder. “In 2024, it’s essential that video streaming companies diversify their revenue streams by evolving their monetisation models, and ad-based revenue models are clearly the most popular.”
Improving experiences through machine learning (ML) and artificial intelligence (AI)
The power of ML and AI is becoming increasingly appreciated by video developers, with Bitmovin’s research finding that only 6 per cent of video developers have no plans to use these tools in 2024. Over half of video developers (55 per cent) stated that audio transcription and speech-to-text are where they will be using AI tools to improve customer experiences. This is followed by personalisation (39 per cent) and tagging & categorising video (37 per cent), all of which combine to deliver a greater viewing experience to customers whilst increasing engagement time with a given platform.
Sustainability – a significant part of 2024 plans?
When asked how their company approaches sustainability and green streaming, video developers were caught between good intentions and economic realities. Most video developers (40 per cent) said their company would like to prioritise green streaming, but cost has been the main driver of business decisions instead. On the other hand, 24 per cent agreed sustainability is a high priority and factors into their business decisions, even if it means paying a little more, whilst a further 6 per cent stated green streaming is a top priority, regardless of costs.
“It’s clear that the industry has been constrained in making large advancements in sustainability and green streaming as a result of economic pressures,” adds Lederer. “However, despite this, 30 per cent of video developers and their businesses have still made it a key priority for their company, despite it meaning increased costs. As our industry sets its sights on growth and a more stable economy, the 40 per cent that have previously been hyper-focused on their bottom line will be able to invest in prioritising green streaming. There is great hope and the opportunity for innovation in this area in 2024.”
In terms of seeing opportunities to reduce carbon footprint, 52 per cent of video developers say it lies within lowering data transmission with more efficient encoding and energy-efficient network technology. Followed by optimising playback efficiency and power consumption of end-user devices (38 per cent) and utilising cloud native services and data centres in regions with ‘green’ power sources (35 per cent).
For live encoding, H.264/AVC (86 per cent), H.265/HEVC (46 per cent) and VP8 (9 per cent) are the codecs most used in production with AV1 down at 7 per cent despite the latest developments from big tech players. Looking to the next 12-24 months, 27 per cent of video developers say they are planning to implement AV1, only beaten by H.265/HEVC at 34 per cent.
VoD encoding tells a similar story with H.264/AVC (84 per cent) and H.265/HEVC (49 per cent) being the most adopted codecs with AV1 at 8 per cent. Similarly to live encoding plans, AV1 is the codec that video developers plan to adopt most at 32 per cent. Evidently, AV1 across both live and VoD encoding presents an opportunity for innovation in the coming year.