Despite massive growth, the video streaming industry has faced challenges in profitability that have led numerous streaming networks and content hubs to discontinue their “ad-free” services and adopt a FAST or hybrid pay model. The online video environment is continuously changing, offering new opportunities with every advancement. Now, new technologies and sector priorities are leading to a significant wave of innovation centered around Artificial Intelligence's capabilities, which could also be the key to solidifying the industry model for profitability and stability.
#1: AI’s Fortune Telling Ability and Impact on Development
Understanding and mining valuable data can and should have a role in dictating what content is created, marketed, and presented. Especially as consumers have an exploding arena of options, and the “fickle factor” of consumer behavior becomes more vital to understand for customer retention. As the streaming industry becomes more data-centric, the volume and source of data are increasing substantially, creating the opportunity for the predictive ability of AI to know what the viewer wants before they do.
As the industry advances in its adoption of AI, new AI-powered analytic tools will enable streaming providers and their teams to extract actionable insights more quickly and easily, slipstreaming trends into the development pipeline while knowing what is going to keep users engaged. AI companions will allow streaming operators to work with data through natural language interactions, getting the answers and insights they need regardless of data expertise.
By providing real-time insight into stream quality, user behavior, and content optimization on a micro level, AI can help aid engineering, development, and marketing teams simultaneously. Your engineers can detect anomalies in the service before they impact the user base, while your marketing team keys in on what content is most likely to grab new users.
#2: Personalization: Keeping Viewers Happy and Subscribed
Personalization is nothing new, necessarily. However, AI’s ability to analyze and create newly customized content wheels and channels to keep users engaged, subscribed, and happy has taken personalization to a new level.
The integration of artificial intelligence with analytics and customization has evolved from what now seems like the Jurrasic age of generic lists or segmentation by user groups, to finely tuned selections based on a user's viewing history, behavioral trends, and interactions with the platform.
We are quickly entering an era where a user can log into their own unique portal, which has been meticulously curated by AI algorithms with content and a UI that aligns with their tastes. Not only can this redefine how we consume digital content, but it also assures higher customer satisfaction, and vitally, retention.
#3: Artificially Curated Ads and Avoiding Ad Fatigue
In a context of economic uncertainty and subscription fatigue, 2023 saw a massive pivot to include advertising in subscription-based services as a way of lowering the price of subscriptions while increasing revenue. This trend will continue, with the latest NPAW survey on the topic showing that 76% of all subscription-based services globally plan to introduce ads by the end of 2025.
For many users who have opted into services specifically to avoid seeing ads, this can’t help but be an annoyance. However, through AI’s algorithmic understanding of user history, content and product affinity, and real-time contextual relevance, placing ads with AI can mean a far less abrasive user experience.
As anyone in the advertising industry will tell you, ads are typically met with far less resistance when they are seen at a time of need for that product by the consumer, or for something that falls in a strong general category of interest. AI can also determine how many ads a user can tolerate and at which points during playback it is best to place them, smoothing this transition while serving as a revenue center.
#4: The Tower of Babel: AI Overcomes Language Barriers
2023 brought with it a potent lesson in the power of content created in one language to transcend the barriers of nations, oceans, and understanding due to the power of AI.
AI's capability to rapidly comprehend and process multiple languages and dialects is enabling streaming platforms to provide real-time captioning and dubbing, significantly enhancing global accessibility.
As content platforms and streamers look to prioritize quality over quantity, as some industry leaders have publicly declared is the goal in 2024, they also have enhanced abilities to find jewels internationally that can be licensed at low cost, and dubbed at low cost, thanks to the evolution of AI.
This situation is mutually beneficial: it opens up new content to diverse audiences and untapped markets, broadening and enriching viewers' content choices while promising substantial user growth for streaming services.
Welcome to 2024
As we race into 2024, the video streaming industry will increasingly center on unlocking the power of data to customize user experiences while assuring the highest possible quality for the service. The combination of AI with deeper data analytics will equip online video platforms with the speed and resources they need to offer individual users the content and experiences they seek.
The coming year for video streaming seems set to be one of fine-tuning, where a combination of relatively small enhancements will make streaming services more responsive to what viewers really want, resulting in increased business growth and, especially, a more enjoyable and accessible experience for all.
