Streaming Continued to Grow in 2022, With Some Surprises
In a dramatically successful year for streaming, audiences threw content publishers and streaming companies a few curveballs.
Online media had a banner year in 2022.
Initial data for video-on-demand shows a 41% year-over-year increase in minutes viewed in November, with streaming video accounting for more than 38% of total TV usage, according to Nielsen data. While major sports events, such as the FIFA World Cup and the Winter Olympics, gave broadcast TV a boost this year, the overall trend is one of strong and consistent gains for streaming.
Here are the main trends — and a few surprises — Fastly encountered in the past year, and what we expect in the future.
1. Expectations met, Quality wins
Overall, almost all types of streaming took off, with video accounting for the top share of total traffic, and the general rankings for other media types staying the same (although, gaming and messaging flipped spots in 2021). In its 2022 report, for example, Sandvine found that video streaming accounted for 53.7% of traffic in the prior year, up from 48.9% of traffic in 2020. Social media, in the No. 2 slot, claimed 12.7% of traffic, while Web sessions accounted for 9.9% of overall traffic.
The most popular TV shows of the year were Stranger Things, House of the Dragon, and Yellowstone, as of October 29, but the list of top-20 favorite shows only accounted for 25% of those surveyed, suggesting immense diversity among viewers. Live video streams also exhibited significant growth with live sports taking off following massive events, including the NFL Super Bowl and the FIFA World Cup, while e-Sports continued to attract dedicated audiences through services such as Twitch.
The greater demands and varied audience requirements make multi-CDN even more important as a mechanism to improve quality of experience (QoE).
2. Demand for 8K resolution has not taken off. Yet.
The main device used for streaming varies by geography, with mobile phones dominating among younger audiences in much of the world. The majority of US viewers continue to watch online video either on a TV or on a computer.
In addition, while many consumers want more broadband, their willingness to pay is plateauing, and so they are finding little reason to shell out thousands of dollars for the latest video technology: 8K televisions. To date, demand for the highest definition format has not had the exponential increase of previous ones. Less than 3 million households are forecasted to have an 8k television by the end of 2026.
Instead, larger-sized 4K televisions — those with 50-inch diagonals and above — will likely become more common, relieving some of the pressure on providers to increase bandwidth. In 2022, the average size of televisions declined, but over the next two years, consumers will continue to drive demand for larger TVs.
3. Quality-of-Experience (QoE) remains important, as churn grows
Sans new high-bandwidth applications, such as virtual worlds and the Metaverse, many consumers appear to be satisfied with the current standards of latency, when done right. Yet, live streaming and high-definition technologies will require robust infrastructure to deliver acceptable low-latency content.
Content companies that do not meet expectations should expect consumers to vote with their feet, as viewers are more likely than ever to drop or switch providers. Currently, more than a third of US consumers (37%) have left a subscription streaming service, according to a survey conducted by Deloitte.
A variety of streaming technologies can help minimize latency across networks, including the HTML5-based WebRTC, which provides extremely low sub-second latency to users. Low-Latency HTTP Live Streaming (LL-HLS) and Low-Latency Dynamic Adaptive Streaming over HTTP (LL-DASH) are the main formats used by video service providers, and provided scalability issues are solved, will likely be how most consumers get low-latency content in 2023.
