Streaming Unleashed: A Look Back at the OTT Industry in 2023

As 2023 comes to a close, it’s evident that the Over-The-Top (OTT) media industry has continued its transformative journey, reshaping entertainment consumption across the globe. 

This year has been marked by several pivotal developments, from the surge in ad-supported models to the expansion of FAST services to significant mergers and acquisitions.

Let’s delve into the key trends defining the OTT space in 2023.

The Surge in Ad-Supported Streaming Model

2023 marked a significant shift in the Over-The-Top (OTT) media landscape. Giants like Netflix, Disney+, and Amazon Prime Video embraced the Advertising-Based Video On Demand (AVOD) model, moving away from traditional subscription-only models. These platforms introduced ad-supported tiers, catering to a growing segment of viewers seeking lower-cost alternatives.

Key Developments

• Disney+ launched its Ad-Supported streaming in the US in December 2022. In 2023, Disney claimed that 50% of new subscribers chose the Ad-Supported plan over pricier ad-free plans. Following the success of the Advertising-Based model, Disney+ introduced its “Standard with Ads” plan in the UK and selected European regions in November 2023.

• Netflix replaced its ad-free basic plan in the US and UK with an ad-supported “standard with adverts” package in late 2022. A year after Netflix launched its Ad-Supported platform, it claimed that 15 million monthly active users were using its AVOD platform.

• In 2022, Viacom18, partnering with Network 18 and Paramount Global, obtained the men’s IPL streaming rights. Jio streamed the IPL for free using the AVOD model, achieving widespread attention. Concurrently, Hotstar, holding the ICC World Cup rights, adopted a similar free streaming approach, especially after experiencing a notable subscriber loss due to losing HBO and IPL rights.

In line with these trends, Amazon Prime launched its Ad-Free plan, Paramount+ expanded its ad-supported offering to an international audience, and WarnerBros.Discovery (Max) introduced various tiers, including ad-free options.

This shift has expanded their user base and opened new revenue streams in a highly competitive market. 

Growth of CTV and FAST Channels

2023 has seen a rapid expansion of Connected TV (CTV) and Free Ad-Supported Streaming TV (FAST) channels, as more viewers opt for internet-based TV consumption and more platforms offer diverse and quality content. 

CTV and FAST channels have become integral to the over-the-top (OTT) ecosystem, creating new opportunities for advertisers and challenging the traditional TV landscape.

Some of the major developments in the CTV and FAST sector in 2023 are:

• Roku’s FAST Growth: Roku, the leading streaming platform in the US, added over 350 FAST channels by the end of 2022 and reported a total net revenue of $912 million in Q3 2023, up 20% from the previous year. 
• Fox’s Tubi which offers more than 250 channels recorded more than 74 Million Monthly Active Users.
• Samsung TV Plus’s CTV Expansion: Samsung TV Plus, the pre-installed CTV service on Samsung smart TVs, has continuously expanded its CTV offering and currently has over 300 channels in its portfolio. Samsung TV Plus provides access to various content genres, from news and sports to entertainment and lifestyle, catering to different viewer preferences and demographics.
• Amazon’s Fire TV Channels App: Amazon introduced the Fire TV Channels app in the US, featuring over 400 FAST channels from various providers, such as ABC News, CBS Sports, and Fox Sports. The app allows viewers to browse and watch free, ad-supported content without leaving the Fire TV interface, making it easier and more convenient to access FAST channels.
• Crunchyroll’s Anime Channel: Crunchyroll, the Sony-owned anime streaming platform, launched its free, ad-supported streaming channel in the US, featuring a lineup of English-dubbed anime shows. The channel is available on platforms like LG Channels, The Roku Channel, Vizio WatchFree+, and Amazon’s Freevee, reaching a wider audience of anime fans and casual viewers.

In addition to these developments in the US, the CTV and FAST sectors have also witnessed global expansions, with key broadcasters and streaming platforms enhancing their offerings in different regions. 

These trends indicate that CTV and FAST channels are expanding, offering viewers more choices, flexibility, and convenience in content consumption. They offer advertisers more reach, engagement, and measurement in content delivery.

The Explosive Growth of Sports Streaming

The year 2023 marked a significant shift in the way people consume live sports. More and more fans opted for streaming platforms as OTT services offered greater convenience, quality, and variety of content. Some of the year’s biggest sporting events, such as the IPL, FIFA World Cup, NFL, and La Liga, witnessed unprecedented viewership on streaming platforms, breaking records and challenging the status quo.

One of the most notable deals in 2022 was Viacom18’s acquisition of the streaming rights for the IPL men’s edition for a whopping Rs. 23,758 crores (about $3 billion). The gamble paid off as JioCinema, Viacom18’s OTT platform, attracted over 3.2 crore (32 million) concurrent viewers for the final match of IPL. Additionally, Jio allowed users to watch this content for free on mobile devices, with the service being ad-supported, thus enhancing accessibility and viewership.

Another major event that drew a massive audience was the Cricket World Cup, exclusively streamed by Disney+ Hotstar in India. The platform set a new world record with 59 million concurrent viewers during the World Cup finals between India and Australia, making it one of the most-watched events in 2023.

In the US, NFL streaming was more fragmented, with different platforms holding rights to specific matches. Amazon Prime Video, which streamed Thursday Night Football, claimed it averaged 16.6 million viewers across all media platforms during the Vikings-Eagles showdown.

LG has expanded its FAST services by incorporating the FIFA+ channel into its LG TV content library. This addition offers a wide array of football content, including live matches and documentaries, complementing the Women’s Football World Cup for audiences in Europe, Latin America, and Australia. Previously this May, LG collaborated with DAZN to introduce multiple FAST sports channels like DAZN FAST, DAZN Combat, DAZN Rise, and DAZN Women’s Football, covering a diverse range of sports from MMA to the UEFA Women’s Championship.

Following the trend, Netflix is set to broadcast a new live sports event, The Netflix Slam, in the Spring of 2024. Netflix also aired its maiden live Formula sports event , “The Netflix Cup“, this fall.

Amazon, YouTube TV, NBC Peacock, Paramount+, and ESPN+ also increased their sports catalogues, catering to sports fans’ diverse preferences and tastes.

The rise of sports streaming in 2023 indicates the changing dynamics of live sports broadcasting. OTT services have emerged as formidable competitors to traditional broadcasters, offering sports fans more choice, convenience, and quality. As streaming technology and infrastructure improve, OTT platforms will likely dominate the live sports market in the coming years. However, they also need to address the challenges of piracy, latency, and scalability to ensure a smooth and satisfying viewing experience for their customers.

Mergers and Acquisitions

In 2023 streaming services faced challenges such as slowing growth, rising costs, recession headwinds and regulatory scrutiny. They also had to innovate and differentiate themselves from their rivals, offering more value, quality and convenience to their customers.This competitive environment led to a wave of mergers and acquisitions in the industry. Below, we have highlighted some of the most significant mergers and acquisitions that took place in 2023.

Warner Bros. Discovery

In 2022, WarnerMedia and Discovery announced their merger, creating a new media giant called Warner Bros. Discovery. The combined company Warner Bros. Discovery (WBD) launched its unified streaming service, Max, in the US, merging the content and features of HBO Max and Discovery+. The service offered a range of subscription tiers, from ad-supported to premium, and aimed to reach 130 million global subscribers by 2025.  As per the latest news , Warner Bros.Discovery is in merger talks with Paramount Global.

Disney + Hulu

Disney which acquired Hulu from NBCUniversal, started bundling Hulu and Disney+ into a single streaming platform in 2023, offering subscribers a wider range of content and services. The announcement came after Disney bought Comcast’s stake in Hulu for $8.61 billion.

JioCinema + Voot

In 2023, Viacom18 completed the merger of JioCinema and Voot OTT platforms and majority subscribers from Voot were transitioned to JioCinema.

JioCinema + Disney 

Disney is said to be in plans to enter into a merger agreement with Reliance’s Jio Cinema to combine their Indian media operations. Reliance plans to secure a majority share of over 51% in the venture, with Disney owning the remaining stake. The merger, still under negotiation, involves reviewing and valuing the businesses to determine Reliance’s investment. For Disney, the merger comes during competitive challenges and declining subscriber numbers in India. This deal represents a strategic effort to reinforce Disney’s market presence in India.

The streaming industry is expected to continue to evolve and transform in 2024 and beyond, as new players enter the market, new technologies emerge and new opportunities arise. 

Content Aggregation in 2024

As the number of OTT platforms increases, so does the challenge of platform fragmentation, consumer choice and subscription fatigue. This is where content aggregation comes in, offering a one-stop solution for diverse content needs. Content aggregation is the process of bundling multiple OTT services under one umbrella, either by a pay-TV operator or a third-party aggregator. Content aggregation simplifies the consumer experience and reduces the cost of subscribing to multiple services.

Some examples of content aggregators are:

• Verizon, which bundles Ad versions of Netflix and HBO 
• Tata’s Binge platform, which aggregates multiple services such as Disney+ Hotstar, Zee5, SonyLIV, Voot Select, and more
• Zee5 Global just announced content offerings from various OTT platforms in the US market, like  Simply South, Oho Gujarati, Chaupal, NammaFlix, EPIC ON, and iStream.
• OTTplay, which curates content from over 35 OTT platforms in India
• Jio Introduced JioTV Premium with Access to 14 OTT Platforms in India
• Atrangii Super App Launches Exclusive Content and Features for Jio, Zee5, and MX Player Users

Content aggregation is expected to be a key trend in 2024 as OTT platforms experiment with new subscription models, pricing, and distribution strategies. According to Digital TV Research, the OTT revenue is expected to surpass $210 billion by 2026, with more than half coming from advertising. Content aggregators can benefit from this growth by offering targeted ads across multiple platforms and generating additional revenue streams.

Conclusion

As we bid farewell to 2023, the OTT industry stands at a pivotal juncture. This year’s trends have accelerated the growth of streaming services and fundamentally altered how content is distributed and consumed. The industry is poised for further innovation and growth, driven by technological advancements and evolving consumer preferences. The streaming revolution continues, and it’s more vibrant and dynamic.