Even as the traditional TV ecosystem continues to lose subscribers, more and more studios, TV networks, and high-profile media companies are launching DTC video streaming services in an already saturated market.
More than 300 such services are vying for their share of attention (and their wallet), with the average consumer subscribing to three subscriptions. For media companies that are going“direct”—or have already made the leap—billions of dollars are at stake due to transformational shifts in content distribution.
But if they don’t get it right, the very existence of their DTC services could conceivably be at risk, given there’s not enough room for all 300-plus players. A relative handful is likely to thrive, while many might vanish or retreat into a niche.
In the immediate term, as the video streaming war intensifies, the fight for acquiring customers is becoming fierce among technology, media, and telecom (TMT) industry giants, who’re all trying to get consumers to add their service among a burgeoning collection of streaming services.
Looking ahead, as the streaming war moves into its next phase—scaling up and monetizing the subscriber base—media and entertainment (M&E) companies should know their potential customers better than ever before. Some consumers are receptive to ad-supported video services. Others want an ad-free experience and are willing to pay for it.
Some consumers want maximum choice and availability and care more about convenience than price. Other savvy consumers deftly switch from one special offer to another, cancel services when their favourite series ends.
and work the angles to watch as much as they can for as little as possible. As service providers consider which streaming models to adopt—subscription; ad-supported; hybrid; aggregation; original content; video bundled with connectivity, music, and gaming—they should understand how many customers they’ll attract, and how many they’ll potentially lose with each one.
More importantly, they should recognize the opportunity to tailor multiple offerings, or
multiple tiers of the same offering, to consumers based on their behaviors.