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.
- 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.
- 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.