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In the battle of the streaming providers, consumers are the ultimate victors

  • While 76 percent of consumers are satisfied with their video streaming services, they are also curious about new entrants, with consumers 18-24 years old reporting more excitement about the abundance of streaming options available. 
  • Streaming service providers have to find new ways to keep subscribers interested because switching is now so easy and inexpensive that some 50 percent of consumers said they would swap streaming services at will.
  • The explosion of content scattered across various platforms requires streaming providers to improve how they recommend shows to each subscriber, essentially rebundling unbundled content to target a ‘category of one.’

Streaming video content is so ubiquitous today that consumer appetites have largely been satiated. In fact, 76 percent of the 2,000 consumers PwC surveyed in The Streaming Shake-Up report said they are happy with the longform video streaming services to which they currently subscribe. Even many pay-TV viewers are subscribing to as many as five additional streaming services. In fact, since 2017, pay-TV viewership has declined slightly, while streaming subscriptions have grown steadily.

At a time when switching between streaming providers is easier than ever — and costs next to nothing — consumers can get exactly what they want. Half of those surveyed said they plan to subscribe to services from one of the several new players entering the streaming market, including Disney, Apple TV, and HBO Max, among others. Consider this: Disney+ attracted more than 10 million users1 on launch day and exceeded 22 million mobile downloads after one month.2

Almost two-thirds of the viewers who intend to subscribe to a new video entrant said they’d be willing to downgrade or even terminate one of their current services to do so. Meanwhile, 56 percent said they would be willing to cancel one over-the-top service (streaming media offered directly over the internet) to sign up for a new platform. They also anticipate paying more for streaming video in the year ahead, including choosing from new entrants that may be better at fulfilling their specific content needs.

These findings indicate that incumbents need to step up their game by offering consumers high-quality content, a superior experience and competitive pricing. With consumers now able to curate their own content — including what and when they watch, as well as how much they watch in one sitting — it’s essential to retain consumers’ attention. Indeed, this was a central theme at Variety’s Innovate Summit in Los Angeles, which brought together industry leaders to explore how analytics can advance their growth.3

Make it easy on me

Picture this: at the end of a long work week, Mary (a typical consumer) decides to stream a movie, but the films her streaming service recommends don’t appeal to her. Her partner John has an idea: let’s watch The Pelican Brief. Mary then searches on her Smart TV and voila! It’s available to rent via several streaming services.

Wondering if the movie might be available for free on a service to which they already subscribe, John searches via his smartphone and, sure enough, it is. They save $4.99, but are annoyed by how long it took to find the movie and how they almost paid for something included in their current streaming bundle.

This frustrating scenario is common for many casual viewers. When the traditional cable bundle started to unbundle, an abundance of content became available to consumers, but they often don’t know how to find what they want.

Streaming services need to find ways to rebundle this unbundled content in order to cater to personalised consumer tastes — essentially treating each consumer as a ‘category of one’. Micro-segmentation continues to be important in this highly competitive world of streaming video, and technology has evolved so that it’s now possible to enable a segment of one, creating a truly personal experience.

Meeting high expectations

Our research confirms that content is still what matters the most to consumers. Those with high expectations for HBO Max are primed by the company’s reputation for eminently watchable content: 56 percent are motivated by marquee original shows like Game of Thrones and Sex and the City. Meanwhile, 48 percent of all video subscribers are motivated by content that’s available exclusively on a particular platform: In the case of HBO Max, that includes shows such as South Park and The Big Bang Theory.

As a result, streaming platforms without a library of legacy content to attract new viewers and retain existing subscribers are at a disadvantage. They need to build such a library or form strategic alliances with competitors, while recognising that content with a long tail matters the most. Sure, content should create a buzz when it first airs, but what it really needs to do is pull in new viewers and keep them there in the years ahead.

It’s also important to give content creators precision metrics that can help them gauge the success of their projects; make decisions about content based on previous successes and failures; and discover demand for nonexistent content from underserved audiences.

Creating a resilient industry

In today’s competitive environment, audiences are mercurial and eager to try the next new streaming option. It’s worth remembering, however, that the industry has continued to evolve amid a series of structural shifts over several decades — and will do so again. Considerations for service providers include the following:

  1. Consumers take centre stage: Data and analytics allow companies to tailor their offerings to individual consumers, essentially creating a ‘category of one.’
  2. Bring it home with content: The right content at the right price is the elusive formula consumers seek. They will switch around until they get what they want.
  3. Find the right partners: The combination of speed and rigor in content development often requires the addition of strategic partners that complement each other’s strengths.
  4. Create tiered pricing models: Creative approaches, including tiered pricing and ad-supported models, can expand audiences and drive revenue.
  5. Easy access matters: Consumers can be worn down by the explosion of content scattered across various platforms. Use AI to improve content discovery.

Consumers are eager to sample new options. They’re even willing to pay for them. Now, it’s up to the streaming providers to give consumers what they want.