For a while, it seemed like the future of online video streaming is on-demand (VOD), and so it might be a surprise that a lot of the key players in the industry are now pursuing the 24/7 programming instead.
Netflix and YouTube, as well as other on-demand streaming services, focuses on providing viewers with as many choices as possible. However, services like Plex, Amazon, Pluto TV, Xumo, and many others now went the other way and focuses on providing 24/7 linear streaming services that are curated and programmed by experts – just like the traditional linear broadcast TV we had in the days of cable and satellite TV.
So, what’s driving these changes in TV streaming trends? Let us dig deeper into the history of online TV streaming to understand the market’s demands.
History of Online TV Streaming
Unbeknownst to most people, the first video-on-demand services first appeared in the early 1990s, even before the days of the internet. The idea of freely choosing what shows/movies to watch anytime we want it was already around by the 1980s, and an actual VOD service was proposed as early as 1986 in Japan.
The driving force behind the demand for VoD is fairly obvious: people didn’t like to get stuck on the rigid broadcasting schedule. In the traditional TV viewing experience, we have to watch a show according to the schedule provided by the broadcaster. If a movie is shown at 7 PM, then we’d have to tune in at 7 PM and stick to the screen even when there’s an advertisement shown.
People want choice, and this is where the idea of VoD comes in.
However, it was impossible to practically launch an actual VOD service until the adoption of ADSL and DCT technologies in the early 1990s. Bell Atlantic (now Verizon) partnered with IBM and launched a video-on-demand service over ADSL in 1993, and there are also various trials by various other companies throughout the 1990s.
As we know, it was cable TV which led the way on VoD, but arguably VoD never really took off during the 1990s due to various issues from commercial viability from the consumers’ point of view to licensing problems, and other issues.
The key to the meteoric rise of on-demand TV, however, was when a small group of PayPay’s employees designed a simple site so they could share videos back in 2005. What started as a simple video sharing site back then transformed into a massive platform we know as YouTube.
Today, as we know, there are hundreds of video content uploaded to YouTube every single minute, and following the success of YouTube, commercial VoD services like Netflix, Hulu, Sling TV, fuboTV, and others with various programs and formats are flooding the market.
VoD provides viewers with freedom of choice in alignment with the spirit of internet freedom, especially freedom of information. However, turns out freedom isn’t always what we want.
The Crux of On-Demand Streaming: Option Paralysis
The human brain is a fascinating work of art.
Above, we have discussed how in the age of linear broadcasting, we strive for more options, more flexibility, more freedom of choice.
Turns out, we can’t handle that freedom really well. The overload of options we have from YouTube, Netflix, Spotify, various video games, and all the content available online, produces diminished happiness instead. This is defined by Barry Schwartz, a US psychologist, in his 2004 book of the same name as The Paradox of Choice.
This is what happens with today’s VoD market: now we can access hundreds if not thousands of shows, movies, and various other types of content anytime we want it. Yet, with all these options we can’t help but increase our expectations about how good these options will be, which ends up being counterproductive as they produce less satisfaction, even when it is a good show.
People started to realize that having more options and more freedom isn’t always a good thing, and this is where the curated, 24/7 linear streaming fills the gap.
FAST: The Linear Online TV Trend
Last July, Plex—the popular media center app—announced that they are bringing back their 24/7 streaming service complete with a programming guide just like a traditional cable/satellite TV subscription.
What’s interesting is that Plex’s live TV service is totally free, and it doesn’t feature the standard channels found in our usual cable services like CBS, ABC, TBS, or CNN, but instead feature channels like Toon Goggles, Yahoo! Finance, IGN, Reuters, Game Show Central, and others. Plex offers an ad-based linear TV experience, which looks to be a new trend in 2020 and onwards.
Besides the fact of how more people are realizing the diminishing return caused by option paralysis, as we’ve discussed above, more people are forced to tighten their belts during this COVID-19 pandemic crisis. So, a free, ad-based linear TV is certainly an attractive option for many people at the moment, allowing more people to adopt cord-cutting, a practice of shifting from expensive cable/satellite TV plans to online video streaming. While VoD services can still be great replacements for cable TV, many people think that live linear TV is closer, almost 1:1 replacement for cable channels, a more familiar experience.
However, Plex is not the only one entering this new trend. Recently, Digital Media Rights also launched linear streaming versions of its five channels on Samsung TV Plus. As with Plex, these channels are offered as free ad-supported TV (FAST) linear channels. Amazon, one of the market leaders in VoD with its Prime Video service, has launched its FAST live TV package in Germany and is currently developing plans to add live and linear 24/7 channels to its Prime Video service.
Popular streaming services like Roku, Pluto TV, and Xumo has also recently seen an increase in viewership in their linear channels. The reason? Many people now subscribe to more than one VoD service and often experience option paralysis as they spend minutes and even hours flipping through a VoD service rather than watching a show.
Pluto TV has been one of the pioneers of the FAST linear model and has seen a rapid growth of viewership in the past year. Its number of viewership jumped by 55% last March since ViacomCBS acquired the service, showing the potential of FAST as a format.
The linear channels, on the other hand, provide us with a traditional TV viewing experience where we can simply lean back and watch the shows with little to no effort. Many people started to realize that programs and channel curation are the true value of TV as a medium, and the linear schedule is part of that value.
In fact, Roku, one of the most popular streaming services in the US and all over the world, has recently added 100 free linear channels last June. Roku has also introduced a Live TV channel guide (similar to Plex), providing us with the familiar cable TV experience where viewers can simply browse the on-screen guide and switch between channels.
However, the FAST model also provides benefits to the TV channel and content distributor. In traditional cable TV, channels typically purchase multi-year deals for large program bundles, but in this package, there are both popular and lesser-known programs. In FAST channels, channels have more experience in curating programs, shows, and films that can provide more value to their respective target audiences.
Advancements In Technology and Linear-VoD Integrations
A key part allowing the rising popularity of these 24/7 FAST linear channels are the new technologies developed by startups like Amagi and Wurl, which allowed us to present online video assets in a format emulating the traditional cable TV experience. In the past not too long ago, linear channels used to feature a simple, if not rather a clunky interface just listing the channels/programs. However, now an interface showing seamless ad breaks (that doesn’t interrupt dialogues mid-sentence) and more intuitive information about the channel and program.
However, we can no longer separate the on-demand channel from the online TV streaming experience. So, how we integrate the linear channels with the existing and new on-demand assets is very important. The basic idea is for the linear channel to act as a discovery tool for viewers, and they can re-watch the content on-demand if necessary.
There are now various services combining the linear and on-demand services with various approaches while also introducing new features like personalized notifications and location-adjusted weather forecasts, among others. Viewers can also interact with various menus for a better, more interactive experience.
FAST 24/7 channels do have the potential to lead the online TV industry and services in the future, being more accessible for the typical cord-cutters than the subscription-based VoD and live TV services. However, that’s not saying these FAST channels are already perfect, and VoD services like Netflix and YouTube are definitely here to stay.
Viewers can definitely count on more OTT services to come in the future, both in VoD and linear formats, or even combining the two for a richer experience.