We’re glued to our screens, small, large, and in-between – but will we be tethered to some more than others?
By Anne-Frances Hutchinson
Are media consumers getting ready to cut the cord for good? If you’ve watched television lately, you’ve likely seen the harbingers of doom dancing in the premium broadcast graveyard as big media firms shift from traditional pay television to connected TV and mobile streaming services.
While traditional players were ruminating on how to capitalize on the changes to media consumption that had been brewing as technologies and content delivery strategies evolved, the pandemic came to call. The M&E industry took a savage hit as the closure of theaters, film, and television productions, and the suspension of sporting events and live music venues cut off the flow of new content and new revenues.
At the same time, stay-at-home orders vastly increased the demand for content, pushing legacy players to rethink strategies and ramp up their streaming efforts. NBCUniversal, Warner Media, and others were stunned as their stock prices plummeted. ViacomCBS, lauded as a pioneer with its 2014 debut of the CBS All Access streaming service, was no different; in March 2020, their stock languished at $11 per share.
In recent years, the service had gained momentum and media buzz with a slate of original niche programming that included reboots of the cult-favorite Star Trek franchise, a CBS property. By May 2020, the company had forged a deal with YouTube TV that made its cable programming available to Google’s digital multichannel video programming distributor, an industry first.
They also announced the rebranding of CBS All Access to Paramount Plus, offering live sports, a sweeping selection of programming from the company’s cable and broadcast networks, including BET, Comedy Central, and Nickelodeon, as well as news and more original content. In addition to connected TV, content can be accessed via XBox, Playstation, Roku, smartphones and other devices. On March 18, 2021, Viacom’s stock price closed at $96.76, their all-time closing high.
As media analyst Michael Nathanson recently told the Los Angeles Times, “Companies that have prioritized investment spending for growth have been rewarded. There is such a higher valuation put on streaming companies that everyone has a green light to be more aggressive to try to build (streaming services).”
The move to mobile
According to Nielsen, 60% of Americans subscribe to more than one paid video streaming service, and 93% plan to keep existing subscriptions and sign up for new ones. “Consumers in OTT-capable homes are spending nearly one-fifth (19%) of their TV time streaming content, be it through ad-supported or paid subscription models,” their report stated. “That’s a hefty amount of the already large media diet of audiences today, especially considering that the medium has only existed for a relatively short period of time. Not to mention, it’s a prime opportunity to easily reach consumers in the digital age, using interfaces that feel familiar and comfortable to them.”
Consumers are streaming more than ever across multiple screens. (Admit it: by now, we’ve all streamed content on our smartphones during TV commercials or as the credits roll.) According to Adjust Media’s 2021 Mobile Streaming Report, the number of consumers using mobile streaming in the U.S. has jumped by 49.89% since the pandemic’s onset.
“Mobile streaming is more than a new twist on the TV model; it requires a new mindset – and new data – to address the opportunity and address the results. By understanding how consumers stream, as well as which channels drive the most value and deliver the highest marketing impact, the potential to build a large user base with high lifetime value (LTV) is huge,” they stressed.
Globally, most consumers are mobile streaming at least once a day. China is leading the trend with over 98% of users streaming every day to once a week, in contrast to the U.S., where that number falls to 69.4%. When they choose to stream, the ease and availability of content across a range of devices is keeping users glued to their smartphones for at least an hour regardless of age or geographic locations. GenZ devotees stream for 90 minutes a day.
There’s not much of a generation gap when it comes to usage, with 58% of users 55 and over streaming content via mobile at least once a week. Over 35% of boomers stream video and TV on their smartphones every day.
“Traditional TV viewers stay glued longer, but mobile viewers are closing the gap,” they pointed out. While American viewers watch traditional pay television for 108 minutes at a time, they stream for 78 minutes. As for the economic impact, audiences are willing to spend to access the content they enjoy; on average, Americans spend $33.55 for streaming and on-demand programs each month.
That was quick: is the boom about to bust?
At a January National Association of Television Program Executives (NATPE) event, Maria Rua Aguete, an analyst from telecom, media, and tech research firm Omdia, revealed that the pandemic introduced over 226 million new subscribers to video streaming services, making 2020 one of the industry’s best years ever. Amazon Prime, Apple TV Plus, Disney Plus, and Netflix were at the top of the fastest growing streaming services list.
This year, NATPE is anticipating a pronounced downward shift for the fantastic four, a consequence of pulling projected subscription income forward and depleting the number of potential new subscribers. The quest for new revenue streams will be important work if the leaders are to maintain their dominance in the sector.
Variety’s Jamie Lang reported, “Other opportunities could arise in diversifying away from simply streaming and partnering outside of film and TV production, such as gaming, podcasts, music and, in what Rua Aguete described as the Disney-fication of the industry, merchandise. She even went as far as to suggest that a major platform like Netflix might consider buying an existing merchandise manufacturer to emulate the money-making machine that Disney has with its retail business.”
Deadline’s Wade Hayes addressed the biggest question the industry is currently facing – where does big media go from here? “Even if they scale up … media companies are going to need to change or risk extinction. Serving consumers directly as opposed to wholesaling content through TV operators, movie theaters and other third parties is a new set of muscles to develop. Amazon, Apple, Roku and other tech companies have long controlled customer data. … Others have been content to trade data or advertising inventory in exchange for gaining subscribers. And then there is Netflix, of course. While it operates as an entertainment entity in many ways, it remains very much a tech firm at its core, with reams of data dating to its founding in 1997.”
There’s no question that mobile streaming is the hottest video delivery mechanism today. Finances Online researcher James Anthony noted, “This growth is being fueled in part by mobile networks’ rush to offer broadband and LTE services. Partnerships between streaming services and mobile networks are mushrooming. These partnerships offer customer incentives in exchange for increased content consumption. … Cord-cutting activity is expected to continue in the coming years as mobile channels grow from content bundling and subsidies.”