Go to the street, get on a subway train, these days, and you’re likely to be surrounded by people listening to music on their phones or watching videos on their smartphone’s screens, tapping into vast digital space of the Internet. It’s a sight we already take for granted, but the streaming revolution that’s made it possible is only just beginning.

This paradigm shift has delivered a series of innovations that transformed the way we consume media. Streaming technology makes it easier for us to receive the entertainment we want, where and when we want it, and to interact with it — all of which older broadcasting technologies have trouble supporting. It also brings us closer to one another and helps us feel more connected with communities of other people who share our niche interests, no matter where we are in the world — provided they have a broadband connection.

Consumers have more digital media options than ever, and most are finding what they want. But many are becoming frustrated by the complexity and effort piecing together their entertainment experience requires.

Streaming is a genuinely revolutionary breakthrough, both in business and in society as a whole. In this light, it is worth taking a look at where it led us and where it will lead us further — from music to movies and television, then video games and — further on the horizon — to VR and AR. Moreover, new possibilities is creating the technology that’s snowballing — the blockchain.

The streaming paradigm shift began with music

For better or for worse, the digital transformation came for the music industry first — and enabled listeners to circumvent piracy laws almost immediately, although not completely.

But weaning people off pirating songs from Napster and Kazaa took more than just charging them for the same experience. After all, it quickly grew tiresome downloading each individual song before it could be enjoyed. Instead, streaming enabled what appears to be a permanent shift away from physical music ownership. Digital platforms like Spotify and YouTube offer nearly any song ever recorded instantly. Consumers are clearly changing and the music streaming revolution is settling into a lasting ceasefire.

Movies, television and video games are currently in the throes of the next streaming shift. As we can see, video is changing everything. Where there used to be text blogs, we now have vlogs, podcast interviews, YouTube channels, Facebook Live, and Snapchat. Video is insanely popular across mobile apps and social media. And the benefits of streaming video are now clear to every major studio, each of which is about to launch their very own over-the-top (OTT) services.

Video games are also on course to catch up with video streaming as the highest usage of global internet traffic. This transition will likely be aided by increasing demand for esports combined with the launch of 5G mobile networks. These factors stand to make the next games streaming revolution as economically significant as that of television.

According to the latest statistics, video will account for 82% of all Internet traffic by 2022. Considering Internet traffic is expected to reach 4.8 zettabytes, that’s just under 4 zettabytes for video alone. One zettabyte is a thousand exabytes, which is a thousand petabytes, which is 4 billion terabytes.

Video traffic will account for 82% of all Internet traffic by 2022

This trend will only increase as the quality of the videos that the users upload improves. 4K, 8K, and 360° videos are only a few of the technologies that are now becoming commonplace and that are in large part responsible for the percentage growth of video on all Internet.

Source: Sandvine 2019 Global Internet Phenomena Report.

2019 Global Internet Phenomena Report from the network, intelligence firm Sandvine, also says that video is dominant on the Internet. All told, video was 60.6% of total downstream volume of traffic on the Internet, up 2.9 percentage points from 2018, per the latest report. Today, Netflix alone accounts for 12.60% of the total downstream volume of traffic across the entire internet and 11.44% of all internet traffic. This is just shy of Google, which makes up 12% of overall internet traffic, driven by YouTube, search, and the Android ecosystem.

Google represents 12% of overall internet traffic, driven by YouTube, as well as search and Android devices. YouTube is 38% of worldwide mobile traffic.

The report also found that gaming and gaming-related bandwidth consumption is rapidly increasing.

Market Overview

Video Streaming (SVoD) worldwide:

Revenue in the Video Streaming (SVoD) segment amounts to US $24,7 billion in 2019.

Revenue is expected to show an annual growth rate (CAGR 2019–2023) of 3.2%, resulting in a market volume of US$28,1 billion by 2023.

User penetration is 14.5% in 2019 and is expected to hit 16.2% by 2023.

The average revenue per user (ARPU) currently amounts to US$23.22.

In global comparison, most revenue is generated in the United States (US$11,4 billion in 2019).

Video Streaming (SVoD) worldwide revenue. Source: Statista, July 2019.

According to the data from Digital TV Research, the international market for OTT video services will continue expanding over the next five years, and more than double the revenue totals recorded in 2018.

Global OTT revenues will more than double by 2024

The firm projects that subscription streaming services, which overtook ad-supported services in 2014 to become the largest OTT revenue source, will continue to take more share of the market.

Worth to mention, there is a need for decentralization since the majority of efforts in the video storage, computing, encoding, networking and streaming categories are led by three dominant brands: Amazon Web Services (AWS), Microsoft and Google Cloud. AWS is so big that it generates the major portion of Amazon’s profits — some $10 billion-plus in annual revenue. It also hosts data for megacorporations like Netflix and Comcast, which all rent space on its servers.