Digital content streaming is on the rise. As Forbes noted, streaming was responsible for $2.5 billion worth of U.S. music sales in 2017 – marking a 48% jump from the previous year. Content downloading, meanwhile, seems to have stalled. According to Digital Music News, speculation that Apple will shut down iTunes within the next year has led to formal requests from groups such as the Content Creators Coalition (CCC) to save the download service.
So, what’s the current state of digital content consumption? Are streaming platforms the new expectation for consumers? Are downloads on their deathbed?
Rolling Stone argues that the future of music downloads will be a combination of vinyl and streaming as downloads disappear. Recode, meanwhile, points out that downloads are on the way out, falling 24% in 2017.
So why the sudden uptick in streaming? The rise of over-the-top (OTT) solutions, which bypass traditional billing models and let users choose the content they want when they want it. Music is an easy example, but this also extends to cloud content such as software-as-a-service provided in partnerships with companies like Google and AWS. Streaming also reduces the storage impact of digital content – while users still rely on data bandwidth to access their content, their devices aren’t filling up with applications and files they may use once or forget they’ve purchased.
By opting out of traditional billing and delivery structures, streaming services have captured user attention and given them more choices when it comes to content consumption.
The death of downloads?
Of course, there’s no reason streaming and downloads can’t coexist – some content users prefer to keep and some prefer to stream on-demand. But new laws such as the EU’s articles 11 and 13 may change the way downloaded rights and responsibilities are assessed.
As of late 2018, users are responsible for the legality of their own content. If content is downloaded without the accompanying rights, users ultimately pay the price. Under proposed EU laws, however, streaming platforms such as YouTube become responsible for this content, putting them in the line of fire if rights aren’t properly secured. Add in GDPR, which mandates the secure handling and storage of users’ personal data, and it quickly becomes problematic for download services to stay competitive.
Cost of doing business
Along with convenience and copyright, cost is also a concern in the streaming vs. download debate. Despite regular price increases, services such as Netflix remain cheap and accessible to most consumers while even $1 downloads can quickly add up. Costs ramp up for software: If companies must pay for new versions year after year, price rapidly trumps usability.
There’s also the problem of loss and replacement for downloads. What happens if users misplace their device or accidentally delete content? What responsibility (if any) do download services have to replace this content? None, unless spelled out in a user agreement. OTT services, meanwhile, provide content on demand. And while access to specific content may change over time, consumers never have to worry about device loss or destruction impacting their ability to access their digital content.
Consumers are willing to pay for content that meets their needs. Given the sheer volume of music, video, and other digital media being generated, securing download rights is a challenge, even for large providers. If services can deliver high-quality streaming content on demand, data shows that consumers are willing to pay – the OTT video streaming service market is predicted to reach $30 billion by 2020.
The power of personalization
Downloading gives users the power to own what they want when they want it, but what happens when they don’t know exactly what they want?
Streaming services capable of creating curated playlists and suggesting new applications or services based on past user preference make it possible for OTT platforms to tap into the growing shift to the always-on, always-connected mobile interaction expected by users. Put simply, users don’t just want access to content – they want content curated for them.
And the winner is…
While streaming hasn’t completely eclipsed downloads, streaming services are the new powerhouse when it comes to digital content. Users are willing to pay for OTT services that meet their needs and budget, and they’re moving away from download platforms that may not have exactly what they want.
Add in the rise of new copyright laws, privacy requirements and the evolution of IoT-enabled smart home systems, and it’s no surprise that streaming is changing market forecasts and impacting the way enterprises do business. And while it’s unlikely that Apple will shutter iTunes or Netflix will stop offering users the ability to download their favorite shows, the trend is clear. Digital content is moving up to the cloud rather than down to user devices.
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