S01E03: Game of Streams (Streaming, Virtual Reality, eSports and skinny bundles)

Our Media Solution Consultant, Magnus Svensson, is sharing his reflections from the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you don’t want to miss an episode.

Online Streaming continues to increase, 19% of US streaming subscribers are paying for three or more services, up four percentage points on the previous year. According to the report from 451 Research, consumers are creating their own bundles of video services, starting with Netflix.

In Sweden, we see a similar trend. According to Mediavision, 35% of all subscribers with SVOD subscribe to at least two services and 11% at least three.

To further prove the popularity of streaming video, the Consumer Technology Association (CTA) revealed that the number of adults in the United States who stream from free or paid video subscription services (68 percent) is now roughly equal to the number of pay TV subscribers (67 percent).

“We expect streaming subscribers to surpass paid TV services — and by a fair margin — in the next year or so,” says CTA senior director of market research Steve Koenig.

Virtual Reality, Augmented Reality and Mixed Reality

Since the last issue of this monthly letter, I had the opportunity to be part of the jury board of a VR hackathon where scientific ideas were used to produce unique VR experiences. Virtual Reality and 360 technology are improving every day, same goes for usage. But widespread consumer uptake of virtual and augmented reality systems will likely take years.

I believe that Virtual Reality and Augmented Reality will become big. Maybe it’s Mixed Reality, that merges real and virtual worlds, that will become most popular. The technique to produce environments where physical and digital objects co-exist and respond to users in real-time will influence the future of entertainment.

To quote Paul Jackson, Ovum principal analyst that spoke at TV Connect in London today, “the big broadcasters need to overcome their nerves and take their place on the VR bandwagon”. Gaming is the dominant application of VR today but Jackson expects video to overtake gaming as the most significant application of VR globally within the next couple of years.

However, one interesting news is that Accedo announced a partnership with HTC VIVE and the Australian National Basketball League to create exciting new user experiences for sporting events in VR. Accedo and HTC VIVE will also produce a series of joint seminars to educate the video industry and accelerate VR innovation.

Also, Swedish Com Hem keeps an eye on VR. Com Hem’s chief technology officer, Thomas Helbo says that Com Hem would be interested in working with both rival pay TV operators and other media companies in this space.

eSports

E-sport is also growing and is about to pass traditional sports. In a recent report from Swedish Mediavision eSports and gaming attracts 370 000 Swedish viewers daily, compared to 280 000 for traditional sports.

In Sweden the daily viewing on eSports has increased 60% per year since 2014, this is four times more that OTT in general the same period (15%). The average eSports viewer in Sweden spends two hours per day watching eSports.

Modern Times Group (MTG) made a big bet on eSports and launched an eSport channel last year. eSports is set to become the biggest sport in the world and surpass football in popularity, according to Gabriel Catrina, chief strategy officer.

Globally, Twitter is going into eSports with full speed. The social network says it will live-stream 1,500 hours of competitive-gaming events this year under deals with ESL and DreamHack.

Broadband and TV bundles

The bundled offers (broadband and TV) that I have been writing about for some time continue to grow. Established pay-TV providers create TV Everywhere apps, bundling it in with broadband service to create a very attractive offering.

In the US, Comcast is preparing to expand a skinny-bundled online service. Branded as Xfinity Instant TV, the service will be available to Comcast broadband subscribers. Verizon has been securing streaming rights from television network owners in preparation for the nationwide launch of a live online TV service.

The latest addition to the Swedish market is “Stream” from Telenor and Bredbandsbolaget, that will be offered to existing customers. The service will include streaming and SVOD.

To watch out for the coming months…

NAB Show, the annual trade show produced by the National Association of Broadcasters will take place in April at the Las Vegas Convention Center. I will spend the week at NAB and will report back my findings. Let me know if you would like to meet up and share some thoughts and insights.

Magnus Svensson is a Media Solution Consultant and partner at Eyevinn Technology. A Swedish consultancy company specialized in streaming, VR, and gaming.

Follow me on Twitter (@svensson00) for regular updates and news.