News

20 June 2017

The business of streaming

New developments in the entertainment and media sector are happening at pace. The sustained growth of OTT services continue to drive changes in the way audiences search and consume content. In this post we look at some of the keenly debated themes happening today in our industry.

Rise and rise of streaming

A changing of the guard has happened – SVOD streaming penetration is now at 48% in the USA while Pay TV companies are seeing a decline in their subscriber numbers. A recent study in the US estimated 71% of millennials are viewing content via streaming and OTT platforms, which is a significant indicator of this large demographic’s preference for the autonomous manner of streaming – empowering them with the choice of content, whenever and however they want to watch it.

Changing menu (of services)

There is a lot of experimentation underway to explore new consumer offerings, with many companies looking beyond the skinny bundle and testing a blend of subscriptions, advertising and transactions. TV viewers only want to pay for what they watch and are looking for a la carte, bespoke choices. Services such as CBS All Access and Hulu have started trialling ad free and ad light options for their subscriber base, as they attempt to find the best model from which to grow their audience.

Deals aplenty

Hardly a week goes by without news of another merger amongst telcos, online leaders and entertainment houses, as more players join the battle to become a global force distributing content beyond their domestic markets. Verizon’s purchase of AOL, Vice Media’s convergence with DOCOMO to launch a SVOD service ‘Vice+’ and the expected merger of AT&T and Time Warner, are all recent examples of significant industry developments. The competition is intensifying for obtaining audience share, revenue growth and control over who owns the services and content coming into the home.

Living in the moment

Linear TV (“Live”) content is regarded by many to be the key to fast customer acquisition and market domination. The recent launch of Hulu Live, a $40 per month subscription for 50-plus live channels, and the new Amazon Channels for Prime subscribers are both significant moves, with analysts predicting many more services to come from the main content aggregators. Wired Magazine described it as ‘a step in a decidedly cord-cutting direction.’

What’s next?

With so much time spent online, analysts are predicting that consumers will start to crave more live direct engagement with their favourite artists, athletes and fans, which can be integrated into building new revenue streams within existing business models. With the music industry being propped up by touring and festivals, and e-sports seeing an explosion in a live event phenomenon where fans pack arenas to watch others play competitively, it’s clear that people still enjoy gathering for a shared experience with other like-minded fans who share their passion. Industry commentators predict that such live events will become valuable sources of re-monetization for digital media operators.