Streaming in Europe continues to grow rapidly and revenue now tops 11.6 billion euros according to European Audiovisual Observatory’s (EAO) February 2021 report. Yet the European subscription video-on-demand (SVOD) market remains a duopoly, with Netflix and Amazon completely dominating the streaming subscriber market at 80% market share. And in some countries such as France, they had secured 97% of the market by the end of 2018. This means that all other SVOD services, local and global, are fiercely competing for the remaining 20% (or less) of viewership.
At the same time, there is a huge opportunity for OTTs looking to break into or expand within Europe through ad-support content. AVOD revenues are forecasted to reach approximately $9.2 billion by 2024 according to Digital TV Research. Though as more players like ViacomCBS/Pluto enter and expand within the EU market, this sector is expected to grow quickly and become hyper-competitive in the coming years.
This all underscores that the European market is more competitive than ever, so here are a few crucial lessons for streaming providers in 2021 and beyond.
COVID revealed a massive, industry-wide problem.
COVID taught us that no matter how good your infrastructure is, it's never quite good enough. As people began consuming content and bandwidth at never-before-seen rates, this became an issue for streaming providers. During the lockdown, OTT giants like Netflix and Youtube were forced to reduce their service quality across Europe by 25% in order to prevent an internet collapse. Networks were strained between increased streaming demand, IoT devices, computers, gaming systems, and improvements in content quality (4K, 5K, 8K). All of this made it even more challenging for streaming providers to consistently deliver a high-quality viewing experience, a challenge for which viewers ultimately pay the price.
In fact, as streaming continues to grow across the continent, so do streaming frustrations. According to Limelight, over 40% of Europeans cited rebuffering as their #1 frustration in 2020. Meanwhile, Penthera's 2020 European study shows that 89% of viewers experience viewing frustrations at least some of the time and 43% said they experience streaming frustrations more than half the time.
Simply relying on great content is no longer enough.
Even best-in-class content delivery networks can’t solve the last mile problems that arise between the edge and a user's device. It’s no secret that better quality viewing leads to lower stream abandonment, a decrease in churn, and an increase in viewer satisfaction. Given the intense level of competition in Europe, this is more critical than ever. According to Penthera’s 2020 European Insights Report, when viewers experience frustrations such as slow start-up times, rebuffering, and poor video quality, 51% give up and try again later, 23% stop using that service,13% write a negative review, and 9% cancel their subscription.
Tools to help prevent or eliminate the streaming issues such as rebuffering, video quality, and ad delivery failures are growing in importance. The strain on bandwidth is growing faster than we can build it and will continue to do so for the foreseeable future.
Extend your infrastructure with Penthera to better compete
Penthera offers industry-leading tools that simply and effectively solve these problems and help streaming providers get around last mile issues. Penthera Download and patented Download for AVOD let SVOD and AVOD providers offer a better way to watch for viewers at home or on the go. Our data shows that over 70% of downloaded content is being watched while viewers are connected. People have learned that downloaded content ensures perfect viewing quality.
European services such as HBO Europe, Liberty Global (HorizonGo, VirginGo, and more), and Mediaset have implemented our technology to extend their infrastructure to get around last mile issues. By investing in products and features like Penthera Download, they found a way to effectively tackle last-mile challenges and will continue to have a significant strategic advantage over their competitors.
To eliminate start-up buffering across CTV, PC, and mobile, Penthera offers FastPlay for streaming. Additional solutions that solve rebuffering and ad delivery failures across user device types are on the horizon, too.
Ready to see how Penthera's software solutions can help? Contact me to learn more.