**Key Trends In OTT Technology Today**
Much of the technology in play, despite being in early adoption stages in other industries, is relatively well-established in OTT. Learn about some of the key trends here.
Expanded Use of AI and ML
There is an inflection point arising in OTT. Leveraging data to fuel the insights that artificial intelligence (AI) and machine learning (ML) generate to personalize and monetize content is now essential. Even casual OTT users expect a personalized experience from their interactions.
The Advent of AI-Powered Recommendation Engine
Building a robust recommendation engine is imperative to creating a personalized user experience.
Netflix uses ML and AI algorithms to help go beyond viewers’ preconceived notions and find the content they are likely to enjoy but may not have chosen to view.
Increasingly Personalized Upsell and Retention Packages
OTT consumers actively seek personalized services at every stage. Personalization should not be limited to content recommendations but include the entire app user journey.
For example, when users switch between multiple devices while accessing the platform, providers must acquire and analyze the data around that activity to notify the users about upselling and renewal offers.
Growing Use of Cloud Hosting Solutions by Streamers
Recently, we have seen widespread adoption of cloud and cloud-native technologies — especially as leveraged by DevOps — take a higher profile role in content distribution and cost optimization.
This reflects the increased demand placed on businesses that transport OTT data, as more people switch from cable to OTT and the quality of the content (such as video moving from 4K to 8K) increases.
The aggregate effect is to make the network a potential weak spot. Add in the required increases in computational power to handle requests, and broadcasters face great challenges in building scalable video streaming infrastructure.
Cloud-based streaming infrastructure offers broadcasters service continuity and provides a higher quality experience for viewers.
We are seeing many brands — including some of our customers — shifting to OTT cloud video streaming solutions that offer greater flexibility and efficiency at a more affordable price.
Cloud-based OTT hosting is emerging as an affordable option.
Evolutions in Advertising Technology
Among the more marked changes we see across the industry is the spread of a hyper-personalized user experience enabled by increasingly sophisticated analyses of user behavior.
For example, GlobalLogic implemented an AI-powered analytics platform for a client based on a user behavior prediction of 10+ million subscribers.
Such leading-edge analytics systems enable businesses to get the most useful insights and maximum value from their data. Ad tech does not rely solely on internally available data.
GlobalLogic built a custom data analytics pipeline to integrate with external and internal analytics systems to increase our client’s revenue.
It takes a significant amount of data and analysis to provide useful insights.
For example, we assisted one client in developing a big data recommendation engine capable of processing 350 million events daily with a data import time of just fifteen minutes.
Another pivotal evolution in ad technology is in monetization strategies.
Industry giants like Disney and Warner Bros. are moving beyond exclusively subscription video-on-demand (SVOD) and testing the waters with advertising-based video-on-demand (AVOD) options.
For OTT businesses to thrive, they must develop low- and no-cost options for subscribers and rely on advertising revenues to fuel profitability.
Ad-supported streaming content — which includes AVOD, free ad-supported streaming TV (FAST), and owned-and-operated apps — has become a necessary and massive opportunity.
Another client sought to develop a real-time advertising exchange. GlobalLogic developed a robust platform capable of processing more than 150 billion advertising requests daily.
We provide complete technical ownership of support of the exchange and implement both feature enhancements on the back-end and the corresponding front-end changes.
Ad-Supported Streaming Content in Action
We’ve seen this play out in various ways within our client base.
For example, one client sought a platform that would constitute a single source of truth for their data.
We built an advertising platform they can use globally to gain complete visibility into ongoing advertising campaigns to meet this need.
The platform connects to 47 APIs, works with 750 employees, and processes 5 terabytes of data daily.
Real-time bidding became important for another of our clients. In that case, we developed the core components of an advertising solution that enables campaigns across OTT, linear TV, and omnichannel.
The solution works across data management, ad cloud services, an ad mediation server, and ad insights, supporting tailored workflows, device browser targeting, and forecasting tracks.
Increasing Advertising Revenue
The growing OTT media market attracts advertising opportunities, and OTT advertising investments are rising. More brands are investing in OTT advertising by the day.
Experts predict that OTT ad revenue will reach $119 billion by 2023.
Critically, these ads will be more targeted and personalized (based on detailed analytics) than previously possible in the OTT framework.
GlobalLogic helped a leading US streaming service achieve a 10% improvement in advertising sales.
**Key Trends Impacting OTT's Future**
Which areas of technology will have the greatest impact in the next two years?
- The impact of 5G
- Rising importance of globalization
- Growth of streaming audio
- Moving into VR / streaming / metaverse
- B2B adoption of streaming services
The Impact of 5G
While OTT has already achieved significant market penetration in the U.S., around 3 in 10 potential OTT consumers have not yet adopted OTT.
Among that group, some have not switched to OTT because they know or suspect they do not have access to the bandwidth that streaming video over the internet requires.
As 5G spreads — particularly to areas of the U.S. where physical infrastructure for high-speed connectivity, such as fiber, is not yet available — OTT will come within reach.
The characteristics that make 5G highly anticipated make it well-suited for OTT.
The high bandwidth that 4K and 8K content require is well within 5G specs, and the superior stability of 5G connectivity is ideal for continuous and seamless video streaming.
Even the low latency of 5G helps improve the user experience of interacting with apps.
The Rising Importance of Globalization
The current OTT market already reflects a slightly greater revenue base outside the U.S. than in.
OTT growth globally is likely to increase as connectivity driven by 5G has a greater market impact in developing markets where connectivity is limited. We have already seen the effects of globalization within our customer base.
To cite just one example, there is increased complexity in testing apps when you must incorporate multiple distinct versions of devices targeted at specific geographies and account for the prevalence of some devices only in specific geographies.
For example, an iPhone sold in the U.S. market is distinct from the same generation iPhone sold in the European market.
From a content perspective, global versus domestic distribution rights require functionality both server-side and client-side, as well as support for both from infrastructure, to ensure you do not run afoul of distribution restrictions by geography.
We expect that new entrants to the OTT market will likely follow the lead of giants such as Netflix by first operating exclusively in the U.S. However, that will not prove a sustainable model for long-term growth.
OTT is an irreversibly and increasingly global market.
Growth of Streaming Audio
Audio streaming is gaining momentum. The global music streaming market size was valued at $29.45 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 14.7% from 2022 to 2030.
Music streaming apps are becoming more accessible, and audiences have an increasing variety of platform options.
GlobalLogic developed OTT applications on various platforms for one of the largest US radio companies with a base exceeding 40 million registered users and 260 million app downloads.
GlobalLogic develops OTT applications on various platforms for one of the largest U.S. radio companies, with a user base exceeding 40 million registered users and 260 million app downloads.
In addition to music streaming, audio capabilities will grow in such forms as voice recognition features and smart speakers in OTT applications.