Video streaming’s massive global growth is showing no signs of slowing down. But with increased consolidation, growing competition, and more discerning international consumers, streaming companies are facing more challenges in generating sustainable global revenue.

Video streaming continues to play a huge part in how people around the world seek out entertainment and connection. And consumers’ appetite for this content continues to grow. The global video streaming market will hit $674 billion in 2024 and grow to a massive $2.7 trillion by 2032. 

In the midst of this staggering growth, there’s also a great deal of upheaval: 

• Comcast lost $436 million on Peacock in Q3 2024
• Warner Bros. Discovery is currently paying down over $41 billion in gross debt
• Paramount has reported Q3 2024 losses of $5.4 billion while it undergoes the transition to new ownership under Skydance Media 
• Disney’s streaming business finally turned a profit for the first time in Q3 2024 with $47 million in operating income (a significant improvement from a loss of over $500 million in Q3 2024)
• As a result of the 2023 writers’ and actors’ strikes, television production fell 16.2% and local on-location filming fell 7.7% in Q1 2024

Consolidation and bundling are on the rise while smaller players fight to reach their niche audiences and scale growth internationally. At the same time, global consumer expectations are evolving, with lower tolerance for subpar user experiences.

To stay competitive, streaming companies need to adapt, fast. And their business realities may be in direct conflict with what their global users demand.

CHALLENGES FOR VIDEO STREAMING LEADERS

We recently surveyed leaders at some of the biggest video streaming services in the world on their top international challenges. Just like in their domestic markets, these leaders are facing stark competition internationally. But with global growth, they face the added challenges of trying to globalize and scale existing workflows and processes while receiving fewer resources to do so. 

Each leader recognized the importance of localization in helping them increase market share and enhance their brand image. They see localization as a key driver of customer satisfaction and loyalty. Both are crucial to attracting new users, reducing churn, and increasing revenue per subscriber.

But the struggle to hire agencies that can meet their needs continues. Most cited quality control and timely delivery as their biggest challenges in working with agency partners – and cost management. Some couldn’t find agencies that had multiple service offerings: language, creative, digital. And as global professionals know, there’s no one aspect of international growth/localization that can succeed on its own; their performance is inextricably tied.

Content is a big concern with these leaders as well:

“Content is the new fast fashion. We need to establish that good content can only be made by creating less low quality content in mass to be profitable. This is at odds with consumer demand/behavior.” – Director, Category Strategy

So, streaming leaders have to carefully balance internal and external resourcing, ensuring cost and quality control while meeting the unique expectations of multiple global audiences at once. 

On top of all that, they have to make sure their brand identity shines through no matter the channel, market, or tactic.

It’s a lot. And it’s all critical to creating sustainable international growth. The industry moves fast, and so do its global consumers. If the user experience wasn’t made for them, they’ll notice – and jump ship.

WHAT GLOBAL USERS WANT

Really, what streaming users across the world want is the same thing that domestic audiences want: an experience that looks, feels, and sounds like it was made just for them.

This has been a pillar of localization forever. In an industry as relatively young as streaming, though, what that means – and specifically, how to make that a reality – is in flux. 

With the push to put out more and more content, and to make it available in every language they cover, video streaming leaders have to decide where to invest a limited budget for maximum impact. 

For better or worse, international users do notice when streamers have taken the time to adapt for them. In a recent survey we conducted, our local experts shared their experiences with leading global streaming companies in their country:

“I sense a strong trend of either machine translation or translators privately consuming a lot of English content (and with a lack of German cultural nuance.)” (Germany)

“It is clear that some shows/films are more relevant for the platforms and they invest more money and search for better translators, which then reflects in a good quality localization. Meanwhile, others are considered less important and hence mistreated (i.e. translated through MT and then post-edited). This results in a mediocre result at best, when not directly absolutely failed.” (Spain)

“Content is localized for Latin America but not specifically for my country.” (Colombia)

“Unfortunately most of the time Hungarian localization for these companies is created by AI or by translation companies who outsource the work which leads to a very poor quality.” (Hungary)

Effective local marketing is critical for getting users on a platform. But an authentic user experience is just as important for keeping them. Providing a customized, culturally relevant experience is crucial to reducing churn, one of the most significant challenges streaming leaders face. Overall, our international users cited the following as impacting their experience:

• Lack of or generic localization
• Bad translation or machine translation
• Inability to change platform language settings
• Lack of relevant content

Local streaming providers are often able to meet those market-specific needs. And in some cases, they have their own plans to bolster their region’s streaming footprint.

LOCAL PLATFORMS

Hungry for relevant local content, global consumers often turn to platforms that are specific to their region or country, like Streamz in Belgium, Joyn+ and RTL+ in Germany, and Mercado Play in Latin America.

In Asia, a coalition of OTT platforms is even creating a joint content fund to stay competitive against Netflix’s growing dominance in the region. Like other streaming companies, they’re facing challenges in creating relevant local content at the scale needed to prevent churn.

For many players in the streaming space, bundling with local providers may be their fastest path to driving global growth. Crunchyroll, for instance, recently entered into an agreement with Bango to “grow its international subscriber base through bundling partnerships with telcos and other third parties.”

Again, no matter the service, consumers want a localized experience. Streaming services that want to expand into global markets – especially more mature ones – will need to ensure cultural relevance and authenticity or face increasingly fierce competition challenging their market position and potential.

FINAL THOUGHT

Global churn rates for video streaming are on the rise. Whether their platform decides to go it alone, bundle, or partner up, streaming leaders will be under increased pressure to deliver global revenue amid a rapidly shifting landscape. Whatever route they take, centering local user experience will be critical in reducing churn and driving longterm growth.

Hitting roadblocks to achieving your international growth goals? Let’s talk.