If you have a sneaking suspicion that free TV fragmented into manifold paid services just to veer back and reconstitute around older network models, you’re not imagining things.
As fun as streaming TV and gaming are, as much as they got us through two years of lockdowns, there’s always a reckoning — and that’s not necessarily a bad thing.
In fact, to hear Vindicia head Roy Barak tell it, the sector’s meteoric expansion since 2019 has led it toward a singularity where streaming innovates and consolidates en route to maturity.
“We, as consumers in this space, are likely undercounting and under-thinking about how much access to streaming service we actually have,” Barak told PYMNTS’ Karen Webster. “Even more streaming services are coming down the pipe. We’ve all seen a few announcements. I do believe the market will get more crowded in 2022 before it potentially gets less crowded in 2023 and 2024.”
“Less crowded” is another way of saying that fever individual services will be vying for a limited pool of streaming dollars, as the average household only has so much TV and game time to burn.
Webster pointed to the dizzying tangle of free trials, bundles and other pathways streaming is taking to win hearts and eyeballs. Pioneer Netflix finds itself cut off from the vaults of the major studios and fills that gap with its own programming, as well as content it acquires elsewhere.
Those majors have fanned out into a realm of subscription channel choice that’s delightful — until it isn’t. That time may be coming sooner than many believe.
“At some point, the market will be oversaturated, and we will see the return of content — both in the producer’s own streaming service but also in other aggregated platforms,” he said. “I would not be surprised if organizations like the BBC will continue to have, say, BritBox as a direct-to-consumer offering, but BritBox also as an add-on to Netflix or YouTube TV or Hulu, and licensing some of that content to other streaming services again. We will see a return to almost a one-to-many and a many-to-many approach when it comes to content access.”
See also: As the Subscription World Churns, Providers Must Get Personal to Avoid the Cut
Streaming Models Evolve
Relaying stories of friends who’ve discovered they’re double paying for streaming subscriptions, not knowing partners or children had also signed up another way, Barak observed that streaming is becoming too costly and complicated to sustain as is.
The disintermediators must, in effect, be disintermediated. It’ll be interesting and possibly a bit chaotic, but ultimately better for the subscriber experience — and the subscription services themselves.
Much comes down to who’s got the content, and how much it will cost to continue watching must-see TV.
Recalling how HBO Max initially saw subscribers sign up, watch a season of “Game of Thrones” then cancel — only to return later for another free trial and another season, Barak said, “What I’ve seen HBO successfully do in the past couple of years is make sure there’s a constant stream of new content that keeps us as consumers and subscribers engaged.”
He added that, “I think that Netflix can pull it off because it has the scale. HBO Max can pull it off because it has HBO and the traditional broadcasting behind it for scale. Disney is in a much better position in my mind because it has a lot of kids-oriented content, and we all know that kids love to watch the same thing over and over. It’s sticky, with the same level of content.”
To make his point, Barak told a “true” story (although possibly apocryphal — there are other versions out there) about how top brass at a Hollywood production company hired an impressive consulting firm to improve their business.
“One of the key outputs from that consulting firm was if you want to make more money, just make hit movies,” he said.
Laughing at the farcicality on one level, he said, “The reason I’m giving the anecdote … is that the more content there is, and the more streaming platforms there are, and the larger the population and the addressable market is,” the greater the content still needed.
See also: Holding Back the Wave of Subscription Cancellations
Is ‘Netflix World Orlando’ Next?
As for the “show” we’ll see the streaming sector put on in 2022, that’s a bit of a mystery thriller.
Netflix’s pandemic stopgap of licensing and overdubbing/subtitling foreign series for English-speaking audiences — such as “Squid Game” — is hit-or-miss, and forces audiences to decide if they want to read their way through movies.
“This is where Netflix and streaming platforms in general have to have focus on localization,” Barak said. “This is where the success of international content on all streaming platforms will really be the decision maker, whether they do proper broad localization.”
In time, we may see a greater focus on retention and merchandising, which puts streaming services of the connected economy era back in show business by curious reversals.
“As we see this market mature, we are going to see a lot more focus on retention,” he said. “We saw what happened in the market [in January] with some streaming subscription services taking a hit because their growth slowed. There is a finite number of consumers each company can reach. It’s a matter of how you can retain those consumers for the long run.”
Calling Disney “close to the gold standard” on that front, Barak said to expect more merchandising, product tie-ins and a Disneyesque approach to the care and feeding of the streaming ecosystem.
Barak said he sees Netflix and other services converting their properties “into new universes like Disney’s or the Harry Potter universe. It has theme parks, it has plenty of merchandise, it has plenty of partnerships with apparel and a multitude of verticals and companies.”
“Netflix, as an example, will likely look toward a model similar to that for their revenue and business expansion,” he added.
See also: Streaming Wars Heat up as Consumers Do the Math on Subscription Services
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