The ongoing battle to "Own the Living Room"
- Anmol Shantha Ram
- Nov 25, 2024
- 3 min read
The Show-Hopping phenomenon
The latest twist in the high-stakes battle to capture your attention is the rise of 'show-hopping' and the challenge of subscription churn. The ease with which services can be cancelled has transformed streaming into a transient experience for many viewers. Audiences now drift from one service to another, based on the content they want to watch and customer loyalty has become a significant issue.
As cancellations increase and consumer sign-ups decelerate, media companies are re-evaluating their strategies to optimise profitability. This has led to various cost-cutting measures, including layoffs and operational expense reductions. Concurrently, there's a pivot toward diversifying revenue through ad-supported models, service bundling, and subscription fee increases.
Four strategic approaches gaining prominence:
1. Skinny bundles and partnerships
The emergence of "skinny bundles" marks a significant shift in the industry, indicating a willingness to collaborate among competitors. This trend may lead to reconfiguring the media landscape as companies seek to strengthen their market positions through strategic partnerships like the strategic ESPN, Fox, and Warner partnership to create a bundled sports platform.
2. Ad-subsidised content leveraging retail insights
Retailers are now leveraging their deep consumer data and insights into real spending habits to enter the content aggregation and advertising domains.
Here are all the smart TV deals announced, hoping to turn viewership into ad dollars:
Walmart announced plans to buy smart TV maker Vizio for $2.3B in cash.
Amazon partnered with Panasonic on a new line of smart TVs with its ad-based Fire TV.
Instacart teamed up with dongle icon Roku to see if customers bought a product after viewing a TV ad.
Kroger used its grocery shopping data to test targeted ads on Disney’s Hulu (e.g. Pepsi promos for frequent soda buyers).
3. Content aggregation by original content creators (e.g. Amazon Prime, Apple TV, etc)
Content aggregators such as Amazon Prime Video and Apple TV+ produce their own original content and employ a comprehensive and adaptive strategy that combines exclusive content creation, smart pricing, global expansion, platform synergy, data-driven operations, diverse revenue models, industry partnerships, and ongoing technological enhancements to capture and maintain a competitive position in the streaming industry. They harness data analytics for targeted content and marketing, offer diverse revenue models, and continuously enhance user experience.
Streaming services are integrated with the aggregator's other products for a seamless user experience, with cross-promotional activities leveraging broader brand ecosystems to enhance value propositions and customer loyalty.
4. Content aggregation without original production (e.g. Foxtel’s Hubbl)
Foxtel's Hubbl in Australia aims to simplify the consumer experience by providing a unified interface for multiple streaming services. This mirrors global trends toward content aggregation, as seen in Comcast and Sky's approaches. Foxtel is offering a standalone Hubbl device that can be plugged into any television and is launching a spcialised Hubbl Smart TV line.
The central idea is to adopt a two-pronged strategy: either manage the TV experience or completely own it by offering a single, streamlined interface that combines various services—from streaming video on demand to cloud gaming—into one convenient hub with a unified monthly bill, plus bundling discounts for adding multiple services.
Key takeaways and strategic insights
Live sports programming continues to be a central component in attracting subscribers.
Effectively using consumer data is critical for targeted advertising and maximising ad revenue.
Strategic partnerships and content bundling are becoming increasingly necessary to stay competitive.
Content aggregation platforms are growing to solve consumer choice overload and subscription fatigue.
Content is king
Success hinges on the ability to build partnerships, derive actionable insights from consumer data, and offer a personalised and highly customised entertainment experience. The future belongs to those who can blend content curation at the right price point with technological innovation to keep viewers engaged and loyal.
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