The Future of the Symbiotic OTT-Subtitling Industrial Ecosystem

The past decade has seen the meteoric rise of OTT services. It’s hard to think of what we subsisted on before: video rentals like Blockbuster, movie theaters (still clinging on), DVDs, VCRs, and television. Most of that is unfamiliar now; we have effectively entered the era of OTTs—over-the-top services—subscription-based or on-demand media streaming services that now reign supreme. Spurred on by the development and ubiquity of the internet and its related peripherals such as cell phones, smart TVs, and laptops, OTT services have effectively replaced the role of television and its many channels.

A list of the types of streaming services available now, alongside the platforms on which they can be viewed. Image credits: Conviva

Where did it all start? In an article for matterkind, Jason Han recounts the history of the OTT and its rise to success over the past few years. Netflix, perhaps the most emblematic of all OTT services, dates back to 1997 when it was founded as a competitor of Blockbuster; unlike Blockbuster, which utilized its stores to rent DVDs and VCRs to its customers, Netflix instead utilized the postal service to reach its customers. In 1999, Netflix transitioned to a subscription service, fully instating the monthly subscription plan at $19.95—Han attributes “the main reason of Netflix success to their efforts of delivering better customer experience.” 

A timeline of the development of TV and OTT systems. Image credits: Conviva

In 2007, Netflix implemented what we now know it to be: a streaming service, although it still retained its mail-order rentals. Not many people know, but in the same year, Blockbuster also started a streaming business—several, in fact—but nowhere near as successful as Netflix. Also in the same year was Apple’s launch of Apple TV, which allowed anyone with a Mac or PC to enjoy music, podcasts, and photos on the big screen. A year later—in 2008, Samsung introduced the Smart TV (the name came later in 2010), which is that familiar, TV-centric format we still enjoy today. While all this was happening, Amazon was figuring out its relationship to the streaming video format: from Amazon Unbox in 2006 to Amazon Video On Demand, then Amazon Instant Video, until it finally settled on Amazon Prime Video in 2018. Its growth, in turn, was driven by its development of the Fire stick, alongside other Fire TV devices.

As of now, in 2022, the OTT industry has grown to immense proportions. A report by Mordor Intelligence gives a coherent overview of the present state of the OTT market. Mordor Intelligence notes that the increasing adoption of OTT “can be attributed to the narrow genre choices, packaging flexibility, wider device availability, internet penetration, and overall lower costs,” alongside customized content. The report also notes that OTT platform services are “no longer interested in being viewed as platforms just for accessing movies and TV shows but are also investing in the production and licensing of their content,” resulting in “direct competition with traditional TV and among the OTT industry,” which is further intensified by “the deployment of advanced technologies within the platforms.” In short, Netflix and other OTTs are no longer mere means of streaming movies and visual content; rather, it has grown large enough to encompass video production and technological production, which serve to not only incentivize users to enjoy their products, but also to effectively dominate the realm of media as we know it.

The report also notes a very critical factor in the development and growth of the OTT landscape: COVID-19. Citing Zuora’s Subscription Economy Index Report, Mordor notes that “trends of the COVID-19 impact on subscriber acquisition rates from March 1-31, 2020, in comparison to the last 12 months, suggested that the global subscription growth rate for OTT Video Streaming companies grew 7x in March 2020, as compared to the growth rate over the previous 12 months.” Data gathered by the British Association for Screen Entertainment (BASE) also suggests that “consumer spending on digital movie purchases grew by more than 87% during the COVID-19 pandemic lockdown period through June 30 to reach GBP 113 million (USD 148 million).”

The OTT market is massive and doesn’t seem like it’s fading away anytime soon. Amir Shahzeidi of Uscreen has collected some important statistics for the OTT industry for 2022 in this article here, and the numbers are impressive. The revenue OTT services rake up will soon pass $210 billion by 2026 according to Digital TV Research; this number is almost twice the revenue generated by the OTT industry in 2020 ($106 billion). Statista, on the other hand, places the projected revenue at $272 billion by 2025. Of this revenue, 51.58% comes from advertising video-on-demand (AVOD), and 40.16% from subscription video-on-demand (SVOD). And while advertising takes up 51% of the total revenue, subscription customers are reportedly responsible for generating nearly double the money per user compared to those using ad-supported streaming services (Statista). 

At the individual level, the average revenue garnered per user (for SVOD services) was estimated to be around $200, according to Statista. Deloitte Insights points out that 82% of US consumers are subscribed to a video streaming service—with an average of 4 subscriptions per person. How does all this translate into the actual hours people spend watching streamed content? According to Domo, Netflix users all over the world watched a total of 452,000 hours of content in 2021. DataAI calculates that a single person, on average, consumes 38 hours of content each month, Netflix or otherwise. 

OTT user projections. Image credits: Uscreen

A graph indicating the market concentration of the OTT market. Image credits: Mordor Intelligence

As a localization company, we are always curious as to how these visible trends in major industries pertain to the work we do as localization experts and translators. The OTT industry, in particular, has much to offer localization agencies, in that the international flux of multilingual media always requires translation in the form of subtitles and dubbing, the former of which receives much of the spotlight in the language industry. And international content, by which we mean visual media in languages other than English, is becoming more and more relevant, exposing the Anglophone sphere to whole new worlds outside its borders. 

Recent years have seen a rising tide of international content flooding through OTT services; we can attribute this phenomenon to the relative ease at which content can be shared across the globe. The most-watched show ever on Netflix, for example, is the first season of Squid Game, which has seen critical acclaim and has been watched for a total of 1.65 billion hours: Squid Game is a South Korean series, shot entirely in the Korean language. Other top-rated non-English series include Money Heist—a Spanish thriller show whose fifth season ranks third in the number of hours watched at 792.2 million hours—All of Us Are Dead, a Korean zombie thriller (560.8 million hours), the first season of Lupin, a French heist show (316.8 million hours) inspired by the eponymous fictitious robber, and the third season of Elite, a Spanish teen drama (275.3 million hours). While no non-English language feature films remain in the top rankings for Netflix, some come pretty close, such as Blood Red Sky, a German action horror film (110.5 million hours), The Platform, a Spanish horror flick (108.1 million hours), and Black Crab (94.1 million hours) (CNET). 

For each and every show, translations and captioning services are necessary; with the rise of non-English content comes the resulting growth of the captioning and subtitling industry. According to a report by Valuates Reports, the captioning and subtitling solution market size was recorded to be USD 282-million big in 2021. Valuates names key drivers in the industry as “the rise in media streaming platforms like Netflix, Amazon Prime, and the surging popularity of video content”; the company also emphasizes the “advent of artificial intelligence,” which some key vendors are integrating into their captioning and subtitling solutions, helping translators by facilitating the “process of editing and adding subtitles for end users.” In other words, the subtitling and captioning industries are not only affected by the growth of the OTT industry, but also by the AI and technology sectors as well. 

Manik Gupta, corporate vice president for Teams Consumer, Skype, and GroupMe at Microsoft, speaks more on the ramifications of technological advancement in the subtitling and captioning industry in an article for BroadcastProME. “As video service providers look to globalise their content,” writes Gupta, “subtitling and audio dubbing are becoming even more crucial for SVOD services.” But with so many languages around the world, the success of international features—English or otherwise—depends on how well and comprehensively they are translated so that they can be disseminated around the globe. Recently, the streaming industry is “seeing a major shift toward the use of artificial intelligence (AI) and machine learning (ML) technologies, to minimise captioning and subtitling costs and maximise efficiency,” writes Gupta, “with AI- and ML-based QC solutions, video service providers can ensure that OTT content delivered to different geographies maintains outstanding quality.”

The bond between subtitling and technology doesn’t just stop there, however. Gupta notices another trend in video streaming: the increasing adoption of cloud technologies. More and more OTTs are utilizing cloud services to facilitate and maximize the efficiency of video streaming; “this shift to the cloud by OTT video service providers is apparent across the entire media workflow, from encoding to quality control (QC). Using a cloud-based [automatic speech recognition] system, video service providers can reap all the benefits of the cloud to create captions and subtitles with increased flexibility, scalability, and cost efficiencies.” Gupta ends his article by noting that, in the future, OTT services must embrace the possibilities of AI/ML- and cloud-based QC solutions, so that these services can focus their time on more creative jobs, leaving other tasks for capable AI systems. The subtitling, OTT, and AI industries are inextricably intertwined in their workings; growth and development in one inevitably affect others to grow and develop, with positive ramifications for all.

With all that being said, the subtitling market is looking brighter than ever. According to Valuates, the captioning and subtitling solution market is projected to grow to $476.9 million by 2028, at a CAGR of 7.7%. While this is not as steep as the OTT industry, it is still an impressive growth projection, propelled by the ever-present need for streaming content. And the demand for subtitling and captioning is not going away anytime soon; a survey by Stagetext revealed that 80% of respondents between the ages of 18 and 24 used “subtitles some or all of the time watching TV on any device,” followed closely by respondents between 26 and 35 with 64%. With younger generations more familiar and comfortable with utilizing subtitles, the industry seems like it’s sailing smoothly.

The projected growth of the captioning and subtitling solution market. Image credits: Valuates Reports

A table of the percentage of people that utilize subtitles, classified by age. Image credits: BBC

In short, the OTT and subtitling industries are co-dependent on the growth of each other, stuck—quite happily so—in a symbiotic relationship. International content on OTT services cannot be translated and spread to other regions without subtitling solutions; on the other hand, subtitling and captioning agencies rely on the constant output of content on the part of the OTT services to survive. And with impressive growth looming in the future, these two industries seem as if they have nowhere else to go but up. Without subtitling services, the world would not have the great masterpieces that have propelled Netflix and its competitors to the forefront—Squid Game, Money Heist, Lupin. And without the plethora of content produced by OTT services, the subtitling industry would be nowhere as vibrant and thriving as it is today.

Furthermore, growth on both sides is heavily affected by the development and implementation of new technology in the AI, ML, and cloud sectors. Advancements in these fields help OTT providers and subtitling agencies to better make use of their time and resource, effectively  allowing them to produce more content at higher quality. It makes sense, then, to call this interconnected web of industries an ecosystem. One industry dependent on another, the sectors move forward into the future.