Netflix has ceased services in Russia and started implementing ways to restrict account sharing. There is also increased competition from the likes of Disney+, Hulu and Sony, along with new launches like Paramount+ and rapid expansion of NBC Peacock.
Netflix continues to lose subscribers, with a million lost in Q2 this year, as reported in its shareholder letter – a trend that is expected to continue. It is difficult to attribute this to a single reason: as the world comes out of the pandemic, people are looking to spend more time on ‘normal’ ways of entertainment and social interactions. Additionally, rising inflation across many western countries is encouraging curtailing spend where possible. Netflix has ceased services in Russia and started implementing ways to restrict account sharing. There is also increased competition from the likes of Disney+, Hulu and Sony, along with new launches like Paramount+ and rapid expansion of NBC Peacock.
This is a turning point for the OTT streaming industry, with new trends emerging:
Newer ways of product packaging
With content catalogues converging because of recent mergers, product packaging is evolving to attract new tiers of subscribers. Zee TV in India is expected to expand many folds with the acquisition of Sony Liv. Warner Media Discovery recently announced the merging of Discovery+, and HBO Max and Disney introduced a bundled discounted package that includes Disney+, Hulu, and ESPN+. Zee TV is continuing to focus on content differentiation between Advertising Video on Demand (AVoD) and Subscription Video on Demand (SVoD) offerings.
Product packaging is not limited to streaming providers alone—Sky’s Glass is an endeavor to bind consumers beyond content viewership, making exits harder. Comcast introduced a similar initiative in the US with XClass TV, bringing distributors back into the game as super-aggregators of apps. TiVo recently completed the acquisition of Vewd, signaling its entry into the connected TV space in a meaningful way.
Consumer Engagement within Streaming
As noted by Netflix, the typical viewer might lose interest if they don’t find something to watch within the first 60-90 seconds of browsing. Streaming services are investing in tracking viewer journeys and improving ways in which relevant content may be presented to them quickly:
- Content Discovery and Personalization: many steaming services are investing in improved content discovery methods by enriching their metadata and making their keywords relevant. Historical data stores and traditionally inconsistent methods of managing metadata are slowing content discoverability and personalization, forcing many streaming enterprises to invest in metadata management tools and advanced data analytics techniques.
- Pushing Content in Addition to Pulling: Customer Data Platform (CDP) is a powerful technique to collect and unify individual customer data from their interaction with the streaming platform. This data can then be effectively used to drive personalized marketing campaigns or push notifications when a relevant content piece is being streamed
- Viewing user experience: Hyper-focus on consumer’s identity and being able to pick and recommend relevant content is becoming key for user retention. In ad-supported experiences, ad relevance will help reduce negative experience and improve consumer interest in the products and services being advertised.
Consumer Engagement Outside Streaming
Engaging consumers beyond their living room will drive new revenue streams and differentiation across streaming services. Streaming players are gathering data that reveal consumer behaviors and preferences which will be useful in determining how else streaming services can capture consumer attention beyond content streaming. DAZN, leader in sports streaming, has launched DAZN Bet, an example of how streaming services will expand their share, beyond the screen. Traditional streamers will have to invest in new platform development or platform extensions that a. compliments their core business and b. increase consumers’ time spent beyond streaming.
Shift in Content Distribution Paradigm
Studios have been amassing content libraries to drive engagement with their own streaming services. However, renewed focus on profitability may encourage third-party sales and content availability through multiple services.
Role of the Smart TV
29% of consumers are overwhelmed by the array of choices in streaming, and 79% expect their Smart TV home screen to aid discovery and recommendations.While the use of set top boxes and streaming devices are expected to decline, TV apps are here to stay, and initiatives like Sky Glass are endeavoring to capitalize on this trend. Time will tell how much a consumer would like to commit at a hardware level.
Content being supreme has been a motto for a long time. However, consumers did not mind spending on many streaming services if they had an easy exit path. From here on, consumers will have their picks—whoever provides the most relevant and engaging content, still providing an easy exit, will likely be the winner.