Submitted By Arti Kumari

US Market Size for OTT Streaming (2020)

• Revenue in the Video-on-Demand segment amounts to US$15,366m
• Current market volume is 182.8m users (with 1.6% yoy increase)
• Expected user penetration to increase from 55.2% to 56.3% by 2024

Revenue Users

https://www.statista.com/outlook/201/109/video-on-demand/united-states#market-revenue
OTT Media Companies Landscape

• The landscape is extremely fragmented

• With more than 200 paid subscription
and ad-supported streaming services
available, consumers have the freedom
to choose one – or several – that fit their
needs
• Streaming companies compete for
consumer share of time and share of
wallet

Digital Media Report 2019 – Video-on-Demand: A report by Statista Digital Market Outlook [December 2019]
 Competitors

• Netflix is projected to lose market share to competitors over the next several years. Moreover, % of subscription is estimated
to be constant i.e 87% for next four years.
• Hulu will surpass 40% of paid OTT subscription users. Reached 75.8 million viewers, accounting for 41.5% of subscription OTT
video service users.
• Amazon Prime Video will remain the second-largest subscription OTT provider by viewers in the U.S. (52.9% penetration). By
2021, the number of Amazon Prime Video viewers will reach one-third of the U.S. population.
• In 18-34 age bracket the user of traditional pay TV services fell to 58% in the latest survey, from 67%.
• The shift is because of convenience(33.9%), cheap(29%), no ads(28.5%), better selection(22.3%), new content(18%)
https://www.forbes.com/sites/danafeldman/2019/08/21/netflix-is-expected-to-lose-us-share-as-rivals-gain/#d550d5166d67
https://www.broadcastingcable.com/news/cord-keepers-dominate-in-new-study-of-pay-tv-subs
https://docs.google.com/viewerng/viewer?url=http://assets.fiercemarkets.net/public/007-Telecom/tivo-q3.pdf
Market Size (Media Ad Spending)

US Digital Video Ad Spending, 2016-2021

• As per the IAB 2018 Landscape report, total spending on Digital Video ad in US was around $17.56 billion in 2019
and 7.8% in terms of the total media ad spending and expected to grow to $22.18 billion and 8.8%
• Total spending on programmatic digital video ads is $13.43 billion

https://www.iab.com/wp-content/uploads/2018/05/IAB-Video-Landscape-Report-May-2018_-4th-Edition_Final.pdf
 Future of OTT Streaming
• Revenue is expected to show an annual growth • Asia Pacific video streaming market is expected to witness
rate (CAGR 2020-2024) of 1.8%, resulting in a significant growth over the forecast period, majorly due to
market volume of US$16,478m by 2024 increasing demand for high speed internet connectivity and
on-demand streaming
• The number of users is expected to amount to
• Advancement in enterprise video technology such as
127.4m with user penetration to hit 56.3% by
superior video codec, web based real-time communication,
2024
captioning, indexing, and transcoding and aggregation are
• Rapid adoption of mobile phones owing to the expected to spur the demand
rising popularity of social media platforms and • 42% US and 50% UK SVOD users downloading videos for
digital mediums for activities such as marketing offline viewing, advertisers may soon come with an option
and branding is projected to further fuel the to embed ads in the content itself. This is again a win-win
market situation for both advertisers and video streaming service
owners as latter can charge extra bucks from their users for
completely ad-free viewing.

https://www.statista.com/outlook/201/109/video-on-demand/united-states
Changes in User Behavior
• Massive transition of users from Television to OTT video streaming services due to increase in
mobile & internet penetration and convenience in terms of time and choice of content
• Around 6/10 between the ages of 18 and 29 (61%) claim that the primary way they watch TV now
is with Internet streaming services, compared to 31% who state they watch mostly via cable or
satellite subscription
• Since, there’s so much choice in the market, Consumers don't know where to get what type of
content at what quality and on what device – and they don't have an unlimited budget. So now
they have to figure it out, pick and choose
• Younger consumers prefer an ad-free environment, but are willing to sit through ads to reduce
cost
• Nothing sells better than free, and it is well established that viewers are willing to watch ads in
order to access content they don’t have to pay for. In fact, two-thirds of U.S. adults don’t mind
watching ads in exchange for free content, and 72 percent would rather watch a TV show with ads
than wait for the ad-free version to become available, according to research by Forrester.
Consumer Attitude towards ads
The findings reveal that
respondents who were OTT
viewers who watched ad-
supported content were overall
more receptive to ads, with 63
percent agreeing that they
didn't mind seeing ads if they
were not paying anything to use
the video service; compared to
53 percent of SVOD viewers and
Ad receptivity among television and over-the-top (OTT)
43 percent of TV only viewers
service viewers in the United States as of August 2018 who said the same.

https://www.statista.com/statistics/935304/most-used-ott-video-services-by-ott-streamers-us/
Gap in the current DIA players
• SVOD competitors offer mobile video download,
AVOD providers are losing to SVOD every time a • When monetized with video ads just like AVOD
viewer is offline or in a limited or expensive streaming, these additional download views could
connectivity environment and thus losing out on a generate substantial ad dollars and engender
significant amount of views and engagement— greater loyalty among viewers
and, therefore, revenue
• To meet the monetization needs of AVOD, a • According to Conviva’s “State of the Streaming TV
mobile video download feature must include Industry” report, up to 47% of streaming ads fail
processes to ensure that current ads are played, on average. A benefit of video ads downloaded and
measured, and reported viewed offline is that there’s little to no risk of this
• Ad-supported video download presents a huge kind of failure.
revenue opportunity for AVOD providers. If they
enable viewers to watch content offline, they can • Currently, DIA players are focussed on targeted ads
ensure no money is left on the table. Attaching for online streaming OTT platforms. But there are
dynamic ads to downloaded video gives AVOD opportunities to exploit DAI for offline video ad
providers a new way to reach viewers who targeting as well in attaching dynamic ads to
otherwise couldn’t engage with content—and that downloaded video
means an increase of ad dollars.
https://tinyurl.com/uu2okoc
New Product Line Concept (Business Model)
Concept: Offline viewing with ad-supported business model for OTT Media platforms and inserting ads (pre-
downloaded) dynamically while the user is offline
Detailed Specifications:
• AVOD platform apps will provide download options for free users as well
• The downloaded videos will also contain ads like while online streaming and will be stored in the
downloaded section of the app
• The offline video will be divided into packets of videos i.e. into actual video contents and ad video contents
• A bundle of ad video content packets will be stored in the video while an offline download based on
consumer profiling and the type of video downloaded. The selection of ad-video content packets will be
done through Dynamic-Ad insertion
• Also, in the background of the offline app, ads are regularly refreshed to ensure that ads served are always
relevant. Based on the configured refresh window, we receive a notification telling our technology to update
the ad in the background before the monetization expires, typically about 2 days before the expiration
• Every OTT App has access to Date and Time of User’s phone. When user is watching the video offline, any ad
video content will be picked up randomly to display at the desired time slot between the show.
New Product Line Concept (…continued)
• In case of a sale promotion ad video with a constraint of specific time period for validation of the
promotional offer , the target ad will be picked up only if the date of watching the video falls in that time
period. The validation of date will be done with the user’s mobile date and time information
• This feature will be a part of the offline video service provided by the AVOD platform app
• Once the user goes online again, the data about the date and time of watching the video will be stored
to online database to use it further for targeting ads online based on the consumer preferences of
specific time to watch offline videos
• Our Solution can plug into existing ad systems—FreeWheel, Google Ads, SpotX, and any other—so
providers and advertisers can access the same targeting capabilities and thorough analytics reports on
ad performance as they can for their streaming ads. Our SDK will provide analytics around when the
downloaded videos start or stop, download progress, and whether the downloaded video was watched,
while the ad server is able to provide all the standard insights into the ad performance
• We can incorporate the ability to track ‘click-heres’ in an add. That means a viewer can click on an ad
when they’re offline. Then, once they are back online, we can send them a notification that reminds
them that they expressed an interest in the content of the ad and that directs them to the appropriate
landing page, website, or App Store.
Technical feasibility
• The downloaded file is saved to the device’s internal storage after encrypting the downloaded
files by using a hashing technique called Password-Based Key Derivation Function 2 (PBKDF), a
type of encryption which divides the video data into chunks. A number is assigned to each chunk
of data. This is done to avoid user interaction directly which means that the user cannot access
the file contents but can only play it in the native app meant for playing the video.
• Once downloaded, when the user plays the video from the download location which is the
storage within the video player app and not the device storage, the file contents are stitched
back together via decryption and the user can view the video on the specific video player app
that is installed on the device and that belongs to the OTT service provider
• Ads inserted dynamically to the downloaded video will have validation parameters such as date
and time (for sales or promotional ads)
• While stitching back the file contents, the ad-video content can be randomly selected from the
lot of offline (downloaded) ads inserted while downloading of the video by the user after
validation of the date and time of the targeted ad
Revenue Model and Sales Plan
Target Market
1. Ad-supported free services (YouTube, Hotstar, Zee5 Pluto, Roku etc.) ~90%
2. Ad-supported subscription services (Hulu, CBS)- Limited ads ~ 9%
Value Proposition
Opportunity for Target market to increase user engagement and increase in their
revenue from ad-sales
Pricing Strategy
Pricing will be based on ‘Cost Per View ‘ (CPV) for every ad played in offline mode,
which is around $0.01-$0.03 as per industry average
Revenue= Number of Media Clients* No. of video downloads*Average no. of ads
played per video*CPV
Appendix

Share of streamers using selected over-the-top (OTT) video

services in the United States as of August 2018