2024 marked a shift in attitude around hyperscale cloud. While its unique scaling capabilities have cemented its place within the streaming industry, the monthly bills are becoming too much for many platforms to keep on top of.
To optimize costs, streaming platforms are diversifying elements of their technology stack away from hyperscale cloud. Starting with the least complex technologies such as transcoders and increasing their independence from hyperscale over time, streaming platforms are reducing costs while retaining scaling potential for times of peak usership. These benefits are pushing more platforms towards hybrid infrastructure.
Ivan Dimitrov, Chief People Officer of Wiser Technology, is an advocate of the hybrid approach:
“I encourage operators to consider a hybrid infrastructure strategy - with bare metal hosting using dedicated servers for that baseline of consistent viewership and cloud for unexpected spikes. Because the cost-benefit does kick in and, in some cases, customers can cut spending by up to 40%.”
I’m sure we’ll see even more adoption of hybrid infrastructure next year. But what other streaming trends might 2025 bring? In this blog, I’ll share my top 4 predictions.
The newly coined expression ‘cord-cutting’ has become so popular that it’s even got its own Wikipedia page. Cord-cutting refers to a user’s cancellation of cable television and terrestrial broadcasting services. A 2024 report by Leichtman Research Group showed that the largest pay-TV providers in the US lost over 5 million subscribers in 2023. Compare this figure to the estimated 4.6 million lost subscribers in 2022 and traditional TV is clearly on the decline. This is for two key reasons: increasing cable TV prices, and the accessibility of streaming services.
Back in 2018, a report on cable industry prices by the Federal Communications Commission found that the basic cable plan in the US cost a monthly average of $73.08. In only five years, that number has gone up to $217.42. This has left millions of people unable to afford the inflated prices of traditional cable broadcast and they are ‘cutting the cord’ to look for cheaper alternatives.
It’s a huge opportunity for streaming services. The costs for streaming are considerably cheaper than for TV, with the average US viewer spending only $50 a month instead of $217.
But it isn’t just the cost savings of streaming services that are attracting audiences. It is also the general viewership experience.
Streaming services - also known as over-the-top (OTT) platforms – such as Netflix and Amazon Prime deliver content via the internet, at the request of the individual consumer. Where traditional TV is on a shared broadcast schedule where you must wait for your desired program to air, streaming viewers have complete control over what they want to watch and when.
It’s why streaming has now become the dominant form of consuming media. In a research report by Cordcutting.com, the data is striking: “with 93% adoption [of the US population], streaming platforms now have more than double the base of traditional cable TV (which has dropped to 40 percent of American adults). No longer an emerging or complicated technology, more than 90 percent of every generation uses video streaming platforms.”
I attended this year’s International Broadcasting Convention (better known as IBC), and during Channel 4’s Technology Director Grace Boswood’s talk ‘Building the future of tech’, she revealed that 30% of Channel 4’s revenue comes from their streaming platform. What has been a UK broadcast channel since 1982, it was eye-opening to hear how reliant Channel 4 now is on streaming.
There is no sign of this trend slowing down in 2025, and I predict the gap between cable TV and OTT platforms to widen even more. Phil Wiser, CTO of Paramount puts it simply: “If you’re not currently leaning into a converged technology [from cable to streaming] for your business… you’re behind.” (IBC 2024)
Source: eMarketer
How many times have you been recommended a TV show by a friend, only to find out you don’t have a subscription to the service it’s on? Yep, me too.
It’s no surprise either, as the list of networks is seemingly endless: Netflix, Amazon Prime, Disney +, Paramount +, Apple TV, just to name a few. Each of them trying to outclass the others in what has been dubbed “the streaming wars”.
As the battle for viewership continues into 2025, what can we expect from these platforms?
Firstly, the release of exclusive content will only increase. Having a TV show or a film produced by a network is one of the most effective ways to market a platform; trailers and promos building the anticipation towards a new show is inherent marketing for the platform on which it sits. The subsequent deluge of Netflix films and shows, for example, has kept the streaming service in the lead for viewership against its competition, encouraging other platforms to join the wave of producing exclusive content as well.
With so much media being produced for streaming, platforms are using AI to make sure that the right content is hitting the right people. Algorithms that recommend to viewers what they might be interested in are already commonplace, but we’re seeing an increase in AI for several other purposes.
Advertisement-based video on demand (AVOD) is one such model. AVOD uses AI to analyze audience data to ensure viewers are seeing personalized adverts, helping OTT platforms identify the most profitable opportunities.
In a talk called ‘AI vs Creativity’ at IBC 2024, CMO of Banijay Entertainment, Damien Viel described how they will be going a step further with AI: “the first thing we will do as a production company is use AI for our workflow and logistics”. Viel explains that once they can use AI for tasks such as customer service automation and predicting periods of high demand, they will save money and time that will be better spent on the creative roles.
I have no doubt we will see much more of this going into 2025. As streaming platforms need to create content to outperform their competition, efficiency is key. Maximising their revenue streams through AVOD and saving money with logistics with help from AI are steps, which I’m sure most, if not all OTT platforms will be adopting in 2025.
According to Demandsage, video accounted for 82% of global internet traffic this year. With more users consuming HD 4K and even 8K content via streaming platforms, the demand for data has soared.
Good quality 4k streaming needs a content bitrate of at least 20MB/second. It is essential that global infrastructure can support this required data throughput as 4k is already widely accessible, and has now become the “standard for higher-end TV and monitors.”
Given the rate at which technology advances, more and more 4k devices are going to become present in households over the next year. But it isn’t just 4k that is putting the pressure on our physical infrastructure: 8k video over IP is emerging as the next in line for high-definition streaming.
If 4k needs a content bitrate of 20MB/second, 8k will need anywhere from 60-90MB/second. At the time of writing, nobody is sure when 8k streaming is going to break into the mainstream. Currently, there is only a handful of 8k televisions on the market, and there isn’t a huge amount of 8k content available to stream. What is certain however is that before this advance in high-definition streaming happens, OTT platforms must upgrade their infrastructure to handle its higher bandwidth needs. This may involve any of the following:
Optimizing network configurations
Adopting advanced video compression techniques such as HEVC or AV1 to reduce data usage without compromising quality.
Implementing quality of service (QoS) protocols
Monitoring network performance and implementing automated scaling to prioritize video traffic and adjust resources based on demand.
Considering our worldwide bandwidth is already being pushed to its capacity with 4k streaming, developments in video over IP are outpacing that of our physical infrastructure. This really is a global concern, and one that needs to be addressed before 8k streaming becomes readily accessible, cheaper, and at the forefront of consumer demand.
To remain competitive and meet growing consumer demands, streaming infrastructure will need ongoing development. This evolution in switches, protocols and bandwidth capabilities will be crucial as the industry heads into 2025 and beyond.
Another streaming trend that follows a similar vein to developing technology is the increasing use of application-specific integrated circuit (ASICs) chips.
ASICs are specialized chips built into a server that are designed for one task in mind. Where a general-purpose processor is made to be a jack of all trades that can handle multiple tasks at a basic level, ASICs are masters of one. With all their compute being directed into one task, they are incredibly efficient in terms of speed, power usage and space. For streaming, that job is predominantly video encoding.
Video encoding is the process of converting raw video footage into different formats and resolutions to be compatible with various devices and the internet. As we’ve seen with the rise of streaming – and especially in high definition 4k video over IP - the scale of which video encoding must be running at to meet the needs of the modern-day consumer is simply impossible to do with traditional CPUs.
NETINT Technologies Inc. estimated that if Google was to encode 500 hours of video per minute with CPUs, they would need 2.2 million servers. If you think that sounds bad, encoding videos for a platform the size of YouTube in AV1 could require over 100 million servers. Need I say more?
This is where ASICs come into play. As they can be specially designed for encoding and decoding video content, streaming infrastructures can efficiently manage this process without having to erect a data centre the size of a small country. As reported by CNET, “Argos (Google’s own ASIC-based transcoder) handles video 20 to 33 times more efficiently than conventional servers when you factor in the cost to design and build the chip, employ it in Google’s data centers, and pay YouTube’s colossal electricity and network usage bills.”
But what about the associated bandwidth problems with 4k or 8k streaming? ASICs can be configured with optimization and compression algorithms (HEVC or AV1), reducing the amount of data that needs to be transmitted, all whilst maintaining high quality. For the consumer, this means lower latencies and higher streaming speeds.
That being said, traditional CPUs offer a level of flexibility that ASICs can’t achieve, as a single processor can support multiple formats. And if you’re working to a budget, the upfront cost of a CPU is much lower than an ASIC. It may be worth keeping general processors around if you are a small-to-medium sized business with flexible requirements.
But as we’ve learned from the shift in audience behaviour, ASICs are needed to support the growth of the OTT platforms that are at the forefront of the streaming industry. I predict they will become a staple of streaming infrastructure over the next year.
Streaming has become the most popular method of consuming media. As traditional TV usage declines, the balance tilts in the favor of OTT platforms, fueling a competitive battle among them to see who can come out on top.
In 2030, the industry is estimated to reach a value of $1,902 billion. By that time, thought leaders are expecting to see the adoption of AI become front and center of not just algorithms and workflows, but the production of films and TV shows as well.
“Studios that embrace these innovations are likely to stay ahead in a highly competitive and rapidly changing industry. The future of filmmaking, shaped by AI, promises to be more efficient, creative, and closely attuned to audience preferences,” says business advisor Neil Sahota in an article for Forbes.
Strategist Mark Minevich, also writing in Forbes, believes we are approaching a “crisis of innovation” with “data centers reaching their limits”, acknowledging the need for infrastructure to keep up with the pace of AI advancement. “Organizations that invest in advanced infrastructures and energy solutions will be in the right place to benefit from this changing perspective… the firms that are only intelligently able to adapt to the future by optimizing AI and solving sustainability and digital sovereignty will be the frontrunners.”
I, for one, can’t wait to see what the industry will look like in five years’ time. But until then, what streaming trends are you predicting for 2025? I would love to hear your thoughts on the above or anything you feel I’ve missed. You can reach out to me over on LinkedIn.
With an MSc in business pyschology, Lukas is a caring, supportive and reliable partner to his customers. In the words of Will Smith, he's the first one in last one out the door.
