Video on Demand Market : Growth and Resulting Factors

May 29, 2019
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Online video content streaming has become a key driver for video content viewership and media consumption growth in the world.


The popularity of over-the-top (OTT) content over conventional forms of video and traditional media is evident through its revenues in the last few years. The revenue from OTT content has seen a CAGR of more than 40 percent from 2005 to 2017. That said, the OTT segment is expected to see a growth of 20 percent in the period 2017-2023.


According to a report published by the Boston Consulting Group (BCG), the global video streaming market size is expected to reach $124.7 billion by 2025.


In India alone, the online video streaming market would reach a value of $5 billion by 2023, as per the report.


The growth of the online video base in the country is primarily driven by the rising affluence, increase in data penetration (especially in rural markets) and acceptance across demography such as women and older generations, BCG reported.


How does Streaming Happen?


Before delving further into the world of online video streaming, let us see what “online streaming” is and how is it different from downloading?


The word “streaming” is self-descriptive as the video content reaches a user’s device in a continuous, steady stream of information. Streaming a movie can be compared to watching a VHS tape.


When a VHS tape is played, the player scans every second of video and audio piece by piece. In the case of streaming, the same process happens but in real-time.


Thus, while streaming a movie or a song online, small random pieces of the media file are downloaded and decoded on your computer in real-time.


That said, anything that you stream isn’t stored into your computer’s permanent storage (although there are services such as Spotify, which may put some small cache files on user’s device to make future playbacks quicker).


Businesses Work Hard to Make Streaming Convenient and Fast


Streaming video and audio content from the internet is not new; it just feels like that because it has finally become convenient. Earlier, streaming a video online used to be a time-consuming and an annoying affair. The stream would continually stop and start, and users had to spend minutes waiting for the media to buffer.


While the process has mostly stayed the same through the years, it is the infrastructure that has changed, with online streaming services such as YouTube and Netflix working hard to build that infrastructure.


Earlier, YouTube and Netflix used to have only a few servers to host their content, which caused a lot of lag for users that were located far away from the servers, especially on high-traffic days (such as weekends).


In the last few years; however, these companies have solved the lag problem by building Content Delivery Networks (CDNs), to manage and stream content. CDNs are a dense, global network of servers, all of which contain the same content. This helps reduce lag and keep servers from becoming overloaded, especially in densely populated areas.


Along with these powerful CDNs, online service providers are also benefitted from faster, more advanced ISPs (Internet Services Providers) like worldwide Google Fibre and Open Connect Appliances (or OCAs).


Live Streaming Presents a Newer Set of Problems


With live video streaming on social media platforms such as Facebook Live, users have started to upload and receive information about events happening in real-time.


As users record their video, every millisecond of that video (and accompanying audio) is divided into tiny files, which are compressed and organized by an encoder. These packets of information are then flown across the internet and downloaded on the user’s device.


Subsequently, these miniscule files are decoded and pieced together as a comprehensible video.


Overall, live streaming is affected by a variety of factors on the network side, which impact latency and cause network congestion. While popular live streaming services cannot use OCAs, they can reduce latency and improve video streaming quality, by utilizing a global network of servers.


How Can Colocation Data Centres Help Make Streaming Faster?


Both live and online video content streaming are subject to lags and performance degradations as any other kind of web content because the streaming videos are stored in geographically panned-out locations, the choice of hosting site makes a big difference.


For example, if a user in New Delhi is trying to stream from a Netflix server in Los Gatos, the files will have to cross more than 12,000 kilometres to reach the user’s device. As a result, the user may have to wait for the video to buffer.


For this reason, popular online video content streaming providers join hands up with reputable data center colocation providers such as STT GDC India to build distributed content delivery networks (or CDN), which help store the same content in varied locations across the globe that are much closer to users.


These data centre colocation providers provide state-of-the-art cloud-enabled data center facilities, where businesses can store, process and maintain the sizeable percentage of video content and user data, eventually improving their streaming performance.




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