5 Ways The Online Video Industry Changed in 2015


siri-apple-tvThis year we witnessed bigger developments in the online video world than ever before. Video consumption continues to grow exponentially, benefiting from major technological advancements in the way viewers consume entertainment and fueled with an overabundance of top-notch original series.

Web browsing now accounts for just 6% of Internet bandwidth in North America with Netflix dominating 36% of traffic — more than YouTube, Amazon and Hulu combined. Since most people realize by now that Netflix is continuing down its path toward world domination, we’re in the golden age of original series and pay TV bundles are losing customers, here are 5 other future-altering changes that happened in online video this year. 

1. Airlines and hotels invested in bandwidth.

At any given moment there are 500,000 passengers on an airplane and 500,000 hotels housing guests. Historically, airlines and hotels have relied on outdated video rental systems installed into their aircraft and properties. The high priced pay-per-view revenues formed a good business, but consumers had limited options. While hotels move towards free high speed Internet, airlines are now investing in updated satellite technology that delivers enough bandwidth per passenger to stream HD video.

Consumption is shifting from the proprietary hospitality systems to the same Internet services you use at home, such as Netflix, Hulu, iTunes, YouTube or Amazon. Virgin America led the trend this year, announcing that their high speed WiFi partnership with ViaSat supports video streaming at speeds 8-10X other onboard WiFi systems, making Netflix available to passengers. Jet Blue followed suit announcing their new high speed Wifi system now supports Amazon Prime.

2. TV OS’s figured out cross-app search.

Video apps flooded devices in the last few years as the TV user experience moved from pre-programmed linear channels to interactive video-on-demand applications. But consumers were left confused, unable to figure out what movies or shows are available in which apps without searching in each app, one app at a time, with a clunky remote not designed for typing. New websites popped up, such as GoWatchIt, that scan stores and identify where to find something, but the info hasn’t been integrated into the TV viewing experience.

If you’re a TV app user, you might recall a time when you paid to rent a movie, only to find the next day that you could have watched it for free on Netflix or HBO. This year, Roku and Amazon Fire introduced cross-app search functionality with voice search, addressing this major flaw. The new Apple TV has a particularly slick cross-app search experience, driven by a new Siri voice-enabled remote. Siri now shows you where you can watch what you’re looking for based on your app subscriptions, otherwise offering up an easy rental via iTunes. This new functionality introduces a huge leap forward in the TV app experience, moving towards a more consolidated experience and making it easier than ever to ditch the cable box.

3. High Definition became outdated.

Analysts expect 30 million 4K TVs will be purchased in 2015. While consumers prepare for the move to higher resolution, video services are racing to launch 4K support, now supported by Vimeo, M-GO, Wuaki, DISH, Netflix, YouTube and others. Amazon and Google are starting to roll out 4K options to Smart TVs. But most homes have a TV-connected box that doesn’t support 4K. What good is a 4K TV and a 4K purchase if your Apple TV, Chromecast or cable box only supports HD?

Next year, the hardware will start to catch up to the software and 4K will become commonplace. The industry is already quietly preparing for what will be the next big push in online video quality: high dynamic range (HDR). While 4K’s high resolution (number of pixels) is impressive, images with HDR have a deeper range of lightness, darkness and color, providing a more noticeable improvement in picture quality than just 4K resolution. The fight for life-like quality levels in video streaming continues after blowing past Blu-ray quality this year. There are no signs online video viewers are taking their cues from music fans, who are flocking back to vinyl and now, surprisingly, audio cassette.

4. Cable operators entered the video publisher market.

Worried about loosing their TV audience to web videos, cable TV operators partnered with the digital publishing industry for the first time this year, striking deals with editorial brands such as Vice, Buzzfeed, Funny or Die, The Onion, Pop Sugar, Red Bull and TED to launch new free and ad-supported video services. Competing with YouTube, and with much of the same content, Comcast launched Watchable and Verizon launched Go90, with other operators following their lead to launch new app brands.

Considering an already busy market of web video aggregators such as Vessel, Pluto TV, Showyou, Xumo and Frequency, all struggling to take traffic from YouTube, these new apps from the pay TV operators may be a last ditch effort to try to engage the cord-cutting audience before they are lost to Apple, Google and Amazon. Time will tell whether the younger generation can be lured away from YouTube to these new video apps.

5. Subscription options exploded.

2015 introduced consumers to the future’s subscription video marketplace with more activity than ever. Millennials are cutting their cable bundles and moving to a collection of 3 or 4 video subscriptions to get everything they need. HBO and Showtime launched direct-to-consumer options through app stores, no longer requiring a cable TV subscription. Major League Baseball’s Advanced Media division succeeded in the launch of their service so much so that they are being commissioned by many others such as ESPN, the PGA Tour, YES Network, WWE and the NHL to launch their apps. Hulu invested heavily in original series and advertising and added a higher priced ad-free option. Hulu’s founder launched Vessel, raising $75 million in its first round. Mubi continued its quiet but steady rise. AMC Networks launched a horror service, Shudder. DirecTV launched a Spanish language service, Yaveo. YouTube launched YouTube Red. Lionsgate launched Tribeca Shortlist and announced plans for Comic-Con Demand.

Every week this year a new SVOD service hatched targeting a specific audience, and we will surely see dozens more born next year around the world. Many, if not most, will not survive, but until the options consolidate, consumers will benefit from more options than ever, but not without the overwhelming challenge of deciding, despite millions of options, what to watch.

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