On the move: Qvest on why the global shift from traditional TV to OTT is far from finished
By Tobias Künkel, MD at Qvest Engage.
Every year, 30 billion minutes of video content are produced, with an annual growth rate of 20%. In the past four years, the amount of content processed has doubled, reflecting the rapid expansion of video production.
The top four consumer needs in today’s content landscape are quality, relevance, brevity, and immersive experiences. Viewers expect high-quality content that is both engaging and relevant to their interests. In addition, shorter content is increasingly in demand for quick consumption, while immersive experiences provide a deeper, more interactive way to engage with the content.
In 2024, the broadcasting industry generally experienced fragmentation and rising costs. Broadcast margins have significantly decreased over the past 10 years, dropping from 25% to 12% [Caretta Research]. This decline is largely due to increased competition from global streaming services. Additionally, audiences are becoming more fragmented across various digital platforms, further complicating the landscape for traditional broadcasters.
Users want to watch sports content across multiple platforms such as mobile devices, desktop computers and smart TVs. Social media and streaming options, especially on mobile devices, are strongly influencing users’ video consumption behaviour and require a stronger orientation to D2C solutions. People are consuming content throughout the day, for example, watching short clips at the bus stop in the morning and longer live sports content on the couch in the evening. This requires different use cases.
AI-powered personalisation and localisation
Personalisation is crucial for engaging audiences in today’s digital landscape. TikTok has set the benchmark in this regard, putting pressure on broadcasters to find solutions to deliver personalised content, which increases the cost burden.
TV networks’ value chains are under intense attack from Big Tech and new competitors, who are shifting advertising revenue to targeting and programmatic platforms. In this rapidly evolving digital business landscape, companies must remain agile, scalable and customer-centric to remain competitive.
Increased engagement directly correlates with an increase in average revenue per user (ARPU). By enhancing viewer interaction and involvement with content, companies can foster a more loyal audience and ultimately increase revenue per user. Real-time on-screen data enhances the live sports experience, making each game more immersive.
In addition, multi-language and dialect support is key to unlocking the potential of new audiences with additional users.
Maximising monetisation through Gen AI workflows
By 2025, US OTT revenues are expected to surpass traditional TV for the first time, marking a pivotal moment for broadcasters worldwide. To remain competitive, they must act quickly to adapt to this rapidly evolving landscape. Digital-first strategies are already delivering remarkable results, with some achieving engagement rates of up to 65% and tapping into new, diverse audiences. Platforms such as YouTube are leading the way.
Broadcasters now have the opportunity to engage more viewers with tailored content, reduce production costs by up to 90% for specific cases like localisation, and stay ahead of the competition with advanced AI tools. As a result, Gen AI media workflows deliver high-quality results when the tools are adapted to the needs, content and existing workflows.
The growth of hyper-personalised channels tailored to specific fan interests is changing the way audiences engage with sports content. The expansion of interactive and community-driven experiences, including the rise of co-watching and live chat communities during events, as well as increased gamification of sports content, is driving deeper audience engagement and participation.
That’s why AI-powered strategies aren’t just improving incremental aspects of production and consumption, they’re revolutionising the entire process. From content management to fan engagement, these tools address critical challenges such as rising production costs, fragmented audiences and the demand for personalised, immersive experiences.
Rise of composable commerce with composable OTT
For broadcasters building a future-ready OTT platform, the challenge of creating something that is flexible, scalable and prepared for constant evolution may seem daunting. However, with the right approach, it becomes entirely manageable.
The e-commerce industry, with revenues ten times the size of the global TV market, offers valuable insights. The rise of composable commerce has inspired the concept of composable OTT platforms, which emphasise flexibility, microservices and cloud-native scalability. These three pillars enable rapid development, seamless updates and low total cost of ownership.
The future of sports broadcasting lies in agility – adapting quickly to change, delivering immersive experiences, and leveraging AI and data to unlock new revenue streams. For broadcasters willing to embrace innovation, this era presents unprecedented opportunities to redefine their strategies and thrive in the dynamic OTT landscape. OTT is set to drive $100 billion in growth by 2029 [Qvest Engaged based on Statista and PWC] – an incredible opportunity for companies willing to move fast and innovate.