May 10th, 2019

Video Streaming Industry Growth – How Industry Leaders Capture Market Share



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When Netflix launched their online video streaming service, it was a groundbreaking innovation that let customers experience content in a new way. Today, streaming isn’t a technological novelty. It’s the standard for how we consume home entertainment. Now we are entering a new chapter for OTT entertainment — one where competition has increased, UA strategies are refined, and cord cutting is no longer a mere convenience.

Video streaming industry growth continues unabated in 2019, but many factors are driving its expansion. It’s crucial for content creators and marketers to evaluate how each platform serves their audience to understand what might come next.

For more information about OTT media services, check out Part 1 of Meghan McAdam’s new Tapjoy blog series — “What Is OTT?


As of writing, Netflix is the undisputed leader of OTT entertainment media. It pioneered the video streaming subscription model, boasts one of the largest on-demand collections, and consistently produces critically-acclaimed original content. Despite these successes, it faces many new challenges — competition from other brands is increasing, and its original content spending has limited the company’s overall profits.

All the same, Netflix maintains impressive growth. The premiere OTT media provider put forward strong performance metrics in its latest quarterly report, gaining 9 million subscribers and doubling its profits. One major driver of this performance is a renewed emphasis on international content to attract global subscribers. Netflix is currently home to 139 million subscribers, well on its way to 150 within the next year.

Netflix’s business model is based entirely around subscription revenue. Netflix’s users and executive team have consistently expressed disdain for ads in the past, and avoid them on their own platform wherever possible. This means Netflix relies heavily on user acquisition and video streaming industry growth for continued revenue.

Since the novelty surrounding streaming has effectively worn off, Netflix has pivoted to an IP-based creative strategy. Social media ads no longer emphasize Netflix’s brand, but the TV shows associated with it — Stranger Things and Orange Is The New Black being prime examples. Considering Netflix’s recent performance boost among US markets, this approach is certainly paying off.


Hulu is relatively smaller than other OTT providers listed here, but claims impressive performance all the same. In 2018, its platform gained 8 million subscribers, bringing the total number of users to 25 million. Hulu also claims to have more individual TV episodes than any other US streaming service, including Netflix itself. As a platform, Hulu is unique for monetizing content through both subscriptions and ad revenue — much like traditional cable packages.

Hulu recently launched a “Culture Lab” that experiments and measures the impact of advertising initiatives. One prime example was the Better Ruins Everything campaign, a Culture Lab initiative that advertised Hulu’s diverse line-up with a celebrity cast. Last year, ad revenue increased by 45% to reach $1.5 billion.

Amazon Prime Video

While Amazon Prime Video is a fairly new OTT platform compared to Netflix and Hulu, the platform is growing thanks to several competitive advantages. Amazon Prime is currently projected to reach 122 million subscribers worldwide by 2022 — 56 million of which would be in the United States alone.

Prime’s marketing strategy is built on the discovery that customers were less likely to turn to competing retailers once they’d purchased a subscription. In recent years, this has encouraged Amazon to create internal digital ecosystems within its ecommerce platform, of which Videos are just one part.

Amazon’s Prime Video platform is fully integrated with standard Prime subscriptions. This allows customers to become members with a single click, and that enables Amazon to advertise through its standard marketing methods — Prime Day promotions being just one example. Anyone who is attracted to an Amazon membership for the free shipping can then be convinced to stay for an impressive video-on-demand collection.

Facebook Watch

Facebook Watch is a relative newcomer to the OTT scene. As such, its growth and future prospects aren’t guaranteed, although financial experts are optimistic. Along with its original and licensed content, Facebook Watch has the unique offering of social video that sets it apart from Netflix or Amazon.

Unfortunately for Facebook Watch, its initial reception wasn’t promising. While the service has obtained 400 million users, many spend only 1 minute per month on the platform. When eMarketer surveyed Facebook users to determine their viewing habits, 50% of respondents revealed they’d never even heard of the Watch service. Another 24% had never used the service, with regular viewing statistics dropping from there.

The good news is Facebook Watch still has room to grow. The OTT provider has the potential to reach 2 billion Facebook users, most of whom represent international markets. Watch’s original content line-up is also rapidly expanding, thanks to Facebook investments of up to $1 billion.

For marketers, Facebook Watch’s monetization model warrants special attention. Facebook currently plans to generate revenue exclusively through advertising, something few OTT platforms have attempted on  Watch’s scale. Content partners currently take 55% of ad revenue, while the remaining 45% goes to Facebook. Many OTT brands are skeptical of entirely ad-based monetization in a Netflix-dominated market, but such models could become more common if Watch finds its audience.

Within a few short years, OTT media providers have shifted away from Netflix’s monolithic presence towards a highly-competitive streaming ecosystem. This proliferation of choices is only going to increase the number of OTT subscribers, creating opportunities for providers, marketers, entertainment studios, and countless other parties. For help navigating this growing space, please contact the mobile monetization experts at Tapjoy today.

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