What Does the Future of Streaming Look Like?
MNTN, a Connected TV platform co-owned by Ryan Reynolds and Mark Douglas, recently released a thought-provoking white paper titled "Too Many Cooks: How Consumers Deal With Streaming Fragmentation." The research paper reveals some staggering statistics:
50% of TV content viewers believe there is an excessive number of streaming services, and 44% of streamers often struggle to find something to watch.
In the past six months, 39% of streaming subscribers have canceled a service, while 55% have subscribed to new streaming services.
59% of consumers are willing to cancel a subscription once they have watched their desired content.
2 in 5 Americans share their streaming logins with individuals outside their households.
Streaming providers are making efforts to address these challenges, but solutions have mostly been incremental, tackling one issue at a time. Some platforms are launching Free Ad Supported TV (FAST) options, like Amazon's Freevie. Netflix, on the other hand, has cracked down on login sharing, which is projected to increase its subscriber count by 3.4 million by the end of June. However, what are the broader and long-term implications of this data for the Connected TV (CTV) landscape?
Consumers are dissatisfied and overwhelmed by the abundance of choices available and are resorting to gaming the system to manage costs. Meanwhile, streaming platforms and content producers are facing economic pressures due to less profitable revenue models compared to traditional linear TV paradigms. This state of disequilibrium requires resolution.
Considering the high cost of content creation, it is unlikely that the vast number of streaming services can continue to thrive. Eventually, those unable to strike an economic balance between audience size, revenue, and content creation expenses will fade away. Those that succeed may be acquired by media conglomerates or may already be part of these giants.
Can more sophisticated AI alleviate consumers' apparent inability to find desired programming amidst the overwhelming array of choices? Undoubtedly, the prevailing platforms must prioritize enhancing the user experience of discovering and selecting content. This is crucial for building loyalty and reducing the substantial churn rates (37% over the last three years, as reported by Deloitte). It will also enable the platforms to leverage their substantial investments in content development, much of which currently goes unnoticed by consumers.
Greater consolidation, coupled with advanced AI and voice-enabled search capabilities, could be the way forward, presenting significant opportunities for major players to secure consumer loyalty, minimize churn, and gain a competitive edge. A research article published by Horowitz last year revealed that two-thirds of streaming consumers desire universal search capabilities across all their streaming services, while a similar number wished for a unified platform to manage all their subscriptions. Furthermore, 58% of these consumers called for more consolidation to reduce confusion and fragmentation.
The question remains: Will large media conglomerates find a way to consolidate their numerous streaming properties to enable user-friendly search and recommendation algorithms across platforms and channels? How will the adoption of improved AI impact the structure and organization of the media landscape? Which entities will emerge as winners, and who will face setbacks?
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