IMDb Competitors, Part 2

Part
01
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Part
01

Streaming: Current Industry Trends

Four trends in the US content streaming industry are AI making personalization smarter, the need for technology and platform development with the rise in mobile viewing, price increases and Disney+ as a potential disruptor in the industry.

AI Making Personalization Smarter

  • Targeted content is already a huge trend from streaming providers, but the growth in AI sophistication will make content become even more personalized.
  • Subscription-based platforms rely on personalization to deliver personalized recommendations to facilitate content discovery and segmentation.
  • Intelligent recommendations boost viewership, brand value and reduce churn.
  • For example, Hulu's Live TV asks viewers their favorite sports teams to offer personalized recommendations and notify when those teams are playing. This has led to 3 out of 4 subscribers watching sports regularly.

Mobile Viewing and How It is Affecting Technology and Pricing

  • The huge rise in mobile viewing has led to OTT providers developing their technology and pricing models accordingly.
  • For example, square video is now growing in popularity as it is more optimized for mobile viewing.
  • Additionally, providers are seeing the rise in mobile viewing and reacting accordingly with their pricing. Netflix is testing a mobile-only subscription package in India for only $3/month.
  • Content streaming providers are offering shorter ad lengths on mobile to decrease churn.
  • Providers also are adjusting their technology to sync between devices and reduce lag time when changing viewing devices. They are faced with the challenge of adapting their technology to respond to a variety of generational preferences in viewing habits.
  • Google's Stadia, which has yet to launch, will allow users to seamlessly change between devices while playing.

Price Increases

  • As competition heats up, content providers are actually increasing their prices rather than lowering.
  • This trend is expected to continue into the future, but 2019 already saw Netflix raises its prices for all subscribers. Amazon Prime, which is the wider package including the Prime Video streaming service, raised its prices in 2018.
  • Additionally, Hulu announced this month that its Live TV plan was increasing by $10 per month.
  • YouTube TV raised its prices by $10 earlier this year as well.
  • Almost all providers have consistently raised prices for the past 9 years.
  • Generally, these price hikes are down to the huge increase in original content, more extensive packages and increased purchase prices from networks.
  • Most streaming services are still operating at a loss, which also accounts for the price increases. Disney reportedly loses over $1 billion across its streaming offerings and that's before Disney+ data is reported.

Disney+

  • While it is still early to tell, many experts are called Disney+ the next big disruptor in content streaming providers.
  • The service signed up 10 million subscribers in its first day.
  • Its huge brand recognition and large content library "makes the House of Mouse a legitimate streaming competitor on Day One to Netflix".
  • However, not everyone agrees. Some see Disney+ as increasing content streaming overall, and while it may chip away at Netflix's user base, it likely will just increase consumers' overall spend as they subscribe to multiple platforms.
Part
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Part
02

Streaming: Programming Trends

Three trends surrounding programming for streaming content in the United States are omniculturalism, even more reboots, and going global.

Omniculturalism

Even More Reboots

Going Global

Part
03
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Part
03

Streaming: Viewing Trends

Some current trends around viewership of streaming content in the US are the willingness of viewers to try new services, the rising demand of digital originals, and the rise of live video streaming.

Viewers Want to Try New Streaming Services

Rising Demand for Digital Originals

  • Although the most in-demand content are licensed titles, the demand for original titles in the US and the rest of the world has grown since 2018 (by 1% per month).
  • In 2018, 54% of streaming video subscribers sign up for a service to watch original content. Apparently, originals are driving viewers' subscription decisions, as " 61% of respondents to a Hub Entertainment Research survey said they might or would definitely drop their Amazon Prime subscription if it stopped producing original content."
  • This trend seems to be driven by the fact that streaming services use original content to differentiate themselves from the competition, thus attracting more viewers.
  • Companies at the forefront of this trend are Netflix and Amazon Prime Video, which are creating high-quality original content to retain customers. For example, Netflix doubled its original content between 2016 and 2018.

Live Video Streaming is on the Rise

  • Currently, viewers are using live streaming to catch their favorite events in real time. According to a study, viewing hours of live video streaming grew 65% from 2017 to 2018.
  • In 2018 for example, the US had a 217% spike in live news streaming viewership with the midterm election.
  • This trend may be driven by the fact that live streaming has become social, enabling broadcasters to reach new audiences.
  • One of example of a company at the forefront of this trend is YouTube, which in 2019 has seen a 100% increase in live stream viewers from 2018.



Part
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of eight
Part
04

Streaming: Predicted Industry Trends

In the near future, the US content streaming industry is going to keep growing and changing. Over-the-top media is going to become a larger part of the average consumer's daily lives. Streaming content is going to expand to virtual reality, and is going to increase in quality, with a concomitant increase in bandwidth needed to experience the full potential of the services.

Trend #1: Growth of Over-the-Top Media Services

  • Over-the-top content providers offer streaming media in the form of a standalone product, including video content, audio content, instant messaging services, and Voice Over IP platforms.
  • US market revenue for over-the-top TV and video is projected by Statista to grow to almost $48 billion by 2023. Digital TV Research says that there will be up to 383 million subscriptions to streaming video-on-demand services by 2021.
  • This comes along with a move away from cable and satellite TV, with 21% of adults in the US no longer paying for those services by 2022. 14 percent of US households are projected to be "streaming-alone" by 2020.
  • According to Bloomberg, by mid-2020, "four of the most valuable companies on the S&P 500 will have introduced streaming services in less than a year".
  • By 2021, US market revenue for over-the-top music streaming is projected to reach $7.4 billion, bringing it up to 32.7% of the total US music market.
  • The number of US digital music listeners between the ages of 25 and 34 is projected to grow to 38.3 million by 2021.

Trend #2: Virtual Reality Streaming

  • Investopedia predicts that by 2029, " traditional television screens are likely to make way, at least in part, for variations that pair with VR eye-wear and headsets". By 2022, Cosmos estimates that VR headset shipments will go up to 26.3 million.
  • PwC projects that streaming video will make up almost half the market for VR by 2022, with sports as a particularly promising segment.
  • In terms of bandwidth, a minimal 360-degree VR experience would require at least a 25 Mbps data connection, with a high-quality experience requiring up to 600 Mbps. It's estimated by Cisco that the average connection speed in the US will reach 75.5 Mbps by 2021.

Trend #3: Increased Quality and Bandwidth

  • Ultra-High-Definition (UHD) video, also known as 4K video, is on track to become the new standard. AnalystView estimates that by 2025, half the population of the US will own a TV capable of 4K video.
  • Juniper Research predicts that by 2021, one in ten US residents will be watching over-the-top streaming content in 4k.
  • Netflix, Amazon Prime, Apple, Disney+, and Youtube are all investing in a library of 4K video content.
  • Multiple services, such as Google and Microsoft, are also investing in 4k streaming games.
  • 4k content will also require an increase in bandwidth, with Google recommending a 35 Mbps connection for their Stadia line of 4k streaming games.

Research Strategy

Your researched team began by looking at financial industry projections on the future of the content streaming industry. They then reached out to see which of these projections were corroborated by other sources in the industry, and found the trends that had the strongest evidence in their favor. Then, they zeroed in on how the largest brands in the industry are reacting to and investing in these trends.
Part
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Part
05

Streaming: Demographic Profile

A variety of demographic data for US streaming service subscribers is presented below. Demographics can vary by provider, as, for example, Hulu users tend to be female more so than other services and Hispanics are much more likely to use Netflix than other ethnic groups.

Age

  • 42% of streamers are between 35-54 years old (Gen X).
  • 39% of them are millennials (18-34 years old).
  • Netflix users tend to be slightly younger than the average streamer, whereas those using Prime Video tend to be older.
  • The average age of a Hulu user is 31.
  • Those aged 23-38 responded the most favorably when asked if they'd consider subscribing to Apple TV and Disney+ once launched.

Gender

  • Hulu users are more likely to be female than the average US streamer.
  • Netflix's gender split is 57% male, 43% female. Prime Video's is 48% male, 52% female.

Household Composition

  • 50% of people who stream content have children.
  • According to Lab 42 Market Research, 58% of streamers are single. This means some single-parent family homes are streamers, too.
  • However, other data from Inmobi contradicts this. They found that OTT users tend to be married with children. 60-80% of users are married homeowners.
  • Resonate found that 58% of streamers were married and 43% have children.
  • Streaming app users (mobile) are also more likely to be married, have at least one child and own their own home.
  • Netflix has the highest ratio of renters to homeowners and the highest rate of singletons.
  • Hulu users tend to be married without children.

Education Level

  • Streamers tend to be better educated than the average American. 50% have some college education or more, whereas the American average is 39%.
  • Amazon Prime users tend to be better educated than the general streaming public.
  • US Netflix users by education level roughly follows the US general population. However, early adopters were a bit more likely to have at least some college education than the general public.

Income Level

  • 51% of streamers earn over $51,000 per year.
  • Prime Video streamers tend to have slightly higher incomes than the average US streaming audience.
  • The average household income of a Hulu user is $92,000.
  • US Netflix users by income level are roughly the same as the general US population. Early adopters, interestingly, tended have slightly lower incomes, likely due to their younger age.

Location

  • 78% of people who stream live in urban or suburban areas.
  • Montana is the state with the most hours streamed per subscriber for Hulu. The previous winner was Wisconsin. Other prominent states were Idaho, Alaska, Wyoming and North Dakota.
  • This means that although rural areas have fewer subscribers, the subscribers from rural areas tend to watch much more.
  • The top 4 cities for Prime Video app users are New York City, Las Vegas, Omaha and Cincinnati.
  • The top cities for Netflix app users are Las Vegas, Denver, Omaha and Atlanta.
  • Hulu app users are in St. Louis, Omaha, Cincinnati and Minneapolis.

Race

  • Content viewers by race answered 55% (Black), 59% white, 61% Hispanic and 49% Asian for Netflix.
  • 28% of Blacks, 33% of whites, 26% of Hispanics and 33% of Asian answered they watch Amazon Prime.
  • Among all ethnic groups, Hispanics were the most likely to consider subscribing to Apple TV and Disney+ once launched.
  • For Hulu, 35% of whites use this service. 34% of Hispanics answered that they subscribe to Hulu, 31% of Blacks and 24% of Asians.



Part
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of eight
Part
06

Streaming: Psychographic Profile

Online streamers in the United States exhibit a series of distinctive behaviors and attitudes. Many streamers are frugal home-bodies who enjoy spending their day indoors watching movies on their various subscription services.

Psychographic Profile of Online Content Streamers in the US

  • The subscriptions to video-on-demand (SVOD) market is dominated by Netflix with overall users mostly subscribing to Netflix (84%), Amazon Prime (46%), and Hulu (28%). These three platforms are known as the big three.
  • Netflix users are much more likely to engage with content by binge watch, discuss shows with others, and worry about spoilers than other streaming service user bases.
  • According to Forbes, Netflix streamers are young and more frugal. Prime streamers are older and more interested in partaking in political parties; whereas, Hulu customers who are younger and less politically inclined gravitate towards the arts and wellness.
  • According to Lab42, streamers are frugal shoppers, prefer indoor settings, and not cause/charity driven. Streamers spend most of their time watching movies, playing video games, and listening to music.
  • The average SVOD streamer tries 4 or more streaming services before deciding on the best 2 or 3. They are likely to try subscription services that don't apply to the content market, like shaving kits.
  • 65% of streamers' favorite genre is comedies, 60% enjoy dramas, and 55% like action-related content.
  • According to Telecompetitor and TDG Research (more details on the research), there are 4 sub-segments of subscriber bases Pay-TV Supplementers, Pay-TV Substitutes, Quantum Viewers, and Video Luddites.
  • Streaming consumers in the US are more likely to pay for multiple subscription services with add-ons, therefore they're spending more than $20 per month compared to UK consumers.
  • About half of all subscribers have signed up for free trials and canceled before being charged, however only 5% cancel four or more services per year.


Part
07
of eight
Part
07

Streaming: Customer Journey

The typical customer journey for selecting a streaming service includes a research stage, a subscription stage, and a decision stage

Research Stage

Subscription Stage

Decision Stage

Decision-Making Factors

1. Cost
  • Cost has been identified as a leading factor for customers in selecting a streaming service.
  • Streaming services are more popular than cable TV in the US because they are offered at a much lower price with many extra features.
  • Price increases pushes people to unsubscribe or look for alternate streaming services.
  • Analysis using the Van Westendorp model found that $12 is the optimal price for streaming services.
2. Content
  • Having an expansive content library is important to customers in selecting a streaming service.
  • Research by PWC shows that 36% of viewers have subscribed to a new video service just to watch a show only that service had access to, original or not.
  • A Nielsen survey reports that 57% of users want access to a broad variety of content while using technology.
  • The average American subscribes to 3.4 streaming services to have as much variety as possible.
3. Ease of use
  • Ease of use is key for customers in selecting a streaming service.
  • The customer user experience includes the ease to find new content, features like kids' mode, and new content recommendations.
  • A Nielsen survey reports that 56% of users consider ease of use when selecting a streaming service.
  • Consumers are more likely to have a better response to a new streaming service when the application is easy to use.

Decision-Making Resources

1. Recommendations from Family & Friends
  • A Nielsen survey reports that 66% of streaming service users said they were influenced by recommendations from family and friends.
  • The opinions of friends, relatives and acquaintances have a significant impact on what people buy.
2. Reviews
  • Social influences on consumer buying decisions are most likely to help in the development of a business.
  • A recent survey by Podium suggests that 93% of customers believe that online reviews impact their purchasing decisions.
3. Comparison Sites
Part
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of eight
Part
08

Streaming: Sentiment

Although streaming once took the market by storm, it is now becoming more commonplace and consumers are not that charged up to get their hands on the streaming service. The pain points, desires, motivations, and perceptions of US consumers about streaming services have been summarized below.

Pain Points

  • 63.11% of US consumers have experienced buffering issues in streaming services.
  • 18.31% found delayed start to the video a matter of concern.
  • Poor video quality is one of the major pain points and 10.41% of consumers in the US have experienced such issues.
  • 49% of customers found it hard to decide what to watch because of the sheer amount of content available. This phenomenon is sometimes termed as 'Subscription Fatigue'.

Desires

Motivations

  • Cost and convenience are the most important reasons why customers use streaming services. 58.5% think streaming is more cost-effective as compared to cable/satellite, while a third think streaming is more convenient.
  • 57% of streaming consumers in the US subscribe to them to watch original content. This ratio is higher in millennials, 71% of whom subscribe for the original content.
  • 25% use streaming services to watch older TV programs that are no longer being aired.

Perceptions

  • 82% of consumers think that companies are not doing enough to protect their personal data and they are growing increasingly wary of this situation.
  • According to a survey, US consumers think Netflix and Amazon Prime provide better value in terms of the quality of content.
  • Streaming once used to be a revolution. It has now become commonplace and 90% of consumers are using the internet to view video content.

Research Strategy

Plenty of surveys have been conducted on streaming services owing to their popularity, specifically in the United States. We have based our findings on surveys conducted in the US from credible sources. Results included in this research are from renowned organizations, e.g. Deloitte, IBM, PricewaterhouseCoopers, Survey Monkey, etc. We have focused on providing quantitative research as opposed to qualitative information.
Sources
Sources

From Part 02
From Part 04
Quotes
  • "An “over-the-top” media service is any online content provider that offers streaming media as a standalone product. The term is commonly applied to video-on-demand platforms, but also refers to audio streaming, messaging services, or internet-based voice calling solutions."
Quotes
  • " According to the most recently available information on the global over-the-top (OTT) TV and video market, the revenue in the United States will grow from 22.9 billion U.S. dollars in 2017 to almost 48 billion U.S. dollars in 2023."
Quotes
  • "According to the firm’s estimates, about 33 million consumers will have cut the cord by the end of this year, rising to 50 million in 2021 and 55 million in 2022. The percentage of adults no longer paying for cable or satellite TV will jump from 13% this year to 21% in 2022, the firm estimated."
Quotes
  • "To put it into perspective – according to research – SVOD will contribute to 40% of total OTT revenues in 2021, some US$25.71 billion. Also, studies from Digital TV Research shows that there will be up to 383 million SVOD subscriptions by 2021, up from 163 million by the end of 2015 and 21 million back in 2010.SVOD subscribers in the US"
Quotes
  • "By 2021, music streaming revenue is projected to reach $7.4 billion with an impressive CAGR of 19.5%."
Quotes
  • "Content delivery networks will carry over half of Internet traffic by 2019. 90% global internet traffic will go video by 2018, streaming-alone households in US will hit 14 million by 2020."
Quotes
  • "Virtual reality (VR) in particular will see the most growth by 2022, with a compound annual growth rate (CAGR) that is four times the rate of the next leading segment: OTT. By 2022, VR headset shipments will increase to an estimated 26.3 million as VR technology gets incorporated into both entertainment and productivity platforms."
Quotes
  • "Within the next ten years, traditional television screens are likely to make way, at least in part, for variations that pair with VR eye-wear and headsets."
Quotes
  • " Games will be half the market for VR by 2022, and video will make up much of the rest. Televised sports are particularly promising, according to PwC."
Quotes
  • "As each VR image is split into two streams (one for each eye), the demands on internet bandwidth increase exponentially. Even a minimal level 360 experience will require at the very least a 25 Mbps line. Streaming HD level content on VR can need as much as 80 to 100 Mbps of throughput, while for Retina quality, we are looking at something closer to 600 Mbps data lines."
Quotes
  • " Juniper’s latest research, Digital TV & Video: Network and OTT Strategies 2016-2021, found that 4K OTT services will attract over 189 million unique users globally by 2021, up from just 2.3 million this year, driven by greater content availability and compatible devices. In the US, this means that 1 in 10 residents will be watching 4K online compared with just 1 in 500 this year. Whilst connected TV will be the dominant channel, viewership will take place through a range of devices; including smartphones, tablets, and PCs."
Quotes
  • "When it launches in November, Google Stadia will support a wide range of bandwidths. On the high-end, the maximal experience — 4K HDR, 60 fps and 5.1 surround sound — will require 35 Mbps. The recommended minimum is 10 Mbps, which allows for something akin to 720p 60fps and stereo audio. According to the chart Google Stadia showed, 5 Mbps is an option for 720p, but we’ll have to see in practice how well that actually works."
From Part 06
Quotes
  • "Hulu users (the 'Bohemians') skew younger (in the Millenial category) and are more likely to be single, less educated, and less wealthy. Less political but more interested in the arts and lifestyle wellness practices (e.g. Yoga), this group is the most experimental in their streaming choices--often having tried over five services."
Quotes
  • "TDG wound up isolating four sub-segments of U.S. adult broadband SVOD-TV subscriber base that appeared to be mutually exclusive, i.e. they did not overlap. Each accounted for a different proportion of U.S. SVOD-TV streamers. Defined by very distinct “demographic, techno-graphic and psychographic profiles,” the market researcher goes on to identify and provide summary descriptions of them."
Quotes
  • "In addition, programming and content innovations, such as Netflix’s interactive TV, are pushing the envelope on what TV content is and how viewers engage with the category, while at the same time allowing Netflix to collect valuable information about viewers’ preferences and choices."
Quotes
  • "For the purposes of this study, TV Subscription Streamers are defined as adult broadband users that (1) subscribe to an SVOD streaming service (e.g., Netflix, Hulu, Amazon Prime), and (2) view SVOD streaming content on a home television at least once a week."
  • "TDG’s statisticians combine factor and cluster analysis to identify four non-overlapping segments such that within-group variation is minimized and between-group variation is maximized. The four segments analyzed include Pay-TV Substituters, Pay-TV Supplementers, Quantum Viewers, and Video Luddites."
Quotes
  • "The research, which is based on advanced language analytics techniques, shows that, compared to Hulu and Amazon, Netflix users are much more likely to discuss: Binge-viewing Characters, scenes and storylines in great detail Evaluating shows, both positively and negatively What people in general think of shows Worrying about seeing spoilers before watching shows."
Quotes
  • "Seven in ten US households and four in ten UK homes have a subscription to at least one subscription video on demand (SVOD) service.1,2 The survey data shows that these SVOD homes are not just taking one service. Multiple subscriptions are the norm."
  • "In the US, half of OVSs have signed up for a service free trial and canceled before their first payment. Of that group, most (69%) only did this with one service. Just 5% could be considered serial offenders, canceling four or more services during the free trial period in the last year."
  • "Much has been written about how young people fear commitment and might be predisposed to abuse free trial periods. The survey data suggests young adults are only marginally more likely to have canceled multiple services within the free trial period. In the US and UK, 16% said they had canceled two or more services within the free trial period. 24% of UK and 21% of US young adult OVSs said the same. However, the number saying they had canceled four or more services was comparable to the average."
  • "Unsurprisingly, higher discounts were more effective at encouraging an extended commitment. For example, 44% of those offered $1.50 discount said they were very or extremely likely to sign up for three months. 59% of those offered the top discount of $9 said the same. "
From Part 07