SeaChange is reporting a 30% increase in streaming activity for linear, video on demand (VOD), and Over-the-Top (OTT) across different platforms and networks driven by the growing consumer demand related to the COVID-19 crisis. The Company expects an acceleration of growth in streaming to continue as countries around the globe implement partial or total lockdowns to help mitigate the spread of COVID-19. In fact, Nielsen, the leading global measurement and data analytics company, is predicting a 60% increase in the amount of media watched.

Impact on TV Operators – Network Infrastructure Stress and Ad Revenue Decrease

As the spread of COVID-19 continues to disrupt what once were relatively predictable viewing habits, video service providers must figure out how to operate under rapidly changing circumstances. Whether customers are signing up for new OTT subscriptions, purchasing premium VOD, or consuming existing video services, the network infrastructure is under high demand. The rate at which these systems need to scale in order to meet the growing demand could not have been anticipated by the operators.

Additionally, advertising revenue has decreased more dramatically during this time. While many associate increasing viewership with advertising revenue growth, the reality is advertising revenue is dependent on supply and demand. With more people staying home, industries such as travel and retail are massively scaling down their advertising efforts. As a result, operators and service providers are finding it even more difficult to fill their advertisement slots.

A recent study from Facebook reported an increase of over 50% more time spent across their apps in Europe since the COVID-19 outbreak, with a reverse impact on the advertising revenue. According to Facebook analysts, ads business has weakened in countries that are actively taking measures to reduce the spread of COVID-19.

The fact is, most advertisers across industries are reducing their spending, including airlines, hotels, and other services impacted by consumer isolation. Sporting events and live shows are being postponed. Seasonal revenue opportunities that once united audiences and drove demand are vanishing. While overall viewership is increasing, the lower demand and the subsequent lack of supply is taking its effect on the advertising revenue of TV operators.

Consequently, with lower video average revenue per user (ARPU) and less overall advertising revenue, both “traditional” and OTT service providers are likely to further optimize their operating expenses.

How Video Delivery Platforms Can Help – Flexibility and Budget Control

During these trying times and to prepare for future uncertainty, TV operators and direct-to-consumer service providers require a complete system that offers flexibility, scalability, and budget control. Below is an example of what SeaChange’s efficient, end-to-end video delivery platform provides service providers:

  1. Analytics: Insight on subscriber engagement equips operators with information needed to make business decisions aimed at optimizing retention and monetization. SeaChange’s Framework offers an Analytics module that can signal TV operators when they should offer special pricing or discounted packages during otherwise unpredictable times. Targeting certain actions to demographics can help to reduce subscriber churn rate.

 

  1. Transcoding/Delivery: Streaming providers are reducing video quality to avoid straining the bandwidth due to increased viewership. With the SeaChange Framework, customers have access to a Content Aware Encoding engine that provides up to 50% bandwidth savings, which significantly reduces content delivery network (CDN) and storage costs.

 

  1. Asset Management Optimization: Scalable media asset management coupled with analytics sheds light on crucial information about asset viewership and streaming statistics. By adjusting the library offering based customer usage, operators can use SeaChange’s Media Asset Manager in combination with its Analytics module to translate it into cost savings for the video processing and storage.

There is no denying the disruption in the video industry today, but service providers can proactively adapt by implementing a video delivery solution that is both scalable and flexible.

By: Walid Hamri, Chief Product Officer of SeaChange International