TV Viewers Are Demanding More Options, and Streaming Services Are Happy to Oblige

Same channels, different remote control

The good news: TV lovers still love watching TV. The not as good news: Viewers aren’t watching it in the same way as they used to (and until relatively recently).

Set-top cable boxes have dwindled in popularity over the past four years. As consumers turn to connected TVs and devices, they have less need for a monthly box-rental fee and thousands of channels they don’t watch.

According to a study from Hub Entertainment Research, viewers reported that for the first time since tracking began in 2014, watching TV online was more popular than watching on a set-top box.

About 52 percent of viewers now say they watch their favorite shows online via services like Netflix, Hulu or Amazon, on a network’s own site or app, or via other online services like iTunes. Forty-eight percent of viewers prefer to watch TV live, on DVR or through an on-demand platform.

The emergence of streaming TV

TV started with limited broadcast networks and appointment viewing. If you missed an episode, that was it. Today, consumers can choose what channels they pay for, on what devices they watch those channels, which episodes to watch and when to tune in. Viewers are in control of the remote, and TV networks and providers are trying to be as flexible as their consumers need them to be.

Today, viewers hold all the power. They’re demanding high-quality content on their preferred devices at the time of their choice, and the companies that helped create the disruption and challenge to the status quo have been happy to oblige.

Sling TV is one such example. The skinny-cable bundle launched in 2015 when there was no live TV streaming service letting users control which channels they watch and pay for.

“We saw an opportunity to reach both cord cutters and cord-nevers,” said Jimshade Chaudhari, vp of marketing and management at Sling TV. “Lots of those people were frustrated with traditional TV back then and still are today.”

Sling TV currently provides two subscription plans with many add-on packages, giving users a customizable experience based on the TV channels they actually want to watch.

“The concept from a consumer standpoint caught on right away,” Chaudhari said. “[Viewers had] been waiting a long time for something like this. And as they got familiar with what it was, they got more control and flexibility than they ever got from the traditional cable experience.”

Subscribers to contract-free services like Sling, Playstation Vue, YouTube TV and other similar platforms can cancel any time at no fee, something not all cable companies allow in their contracts. Additionally, many of these platforms are available on multiple smart TV-connected devices like Roku, Apple TV or Amazon Fire TV where viewers can install other apps for entertainment like games or podcasts.

Even though the mechanics of viewership have started to shift, one thing has remained the same—people still love TV.

“It’s an escape for them,” Chaudhari said. “They want entertainment and really easy access to it that they don’t have to think about. Netflix helped drive the watch-on-your-own-time sensibility early on, and now consumers want more flexibility.”

Libraries and live options

Hulu, another pioneer in the entertainment streaming world, has seen the shift on a larger scale. As it celebrates its 10th anniversary, the platform has added more movies, shows, original programs, premium network add-ons and now live TV.

“Our lives as viewers have been changed irreversibly,” said Ben Smith, Hulu’s svp and head of experience. “Hulu was radical when it launched, but we’ve been all about putting the user in control of the time and place they watch content they love since the beginning.”

When Hulu considers what to develop or provide, it always considers the viewer first and tries to find a way to make that experience friendly to both users and advertisers, according to Smith.

Personalization and questioning what TV will be is at the top of Hulu’s agenda as it looks forward to the next decade.

“We don’t sell ads into shows, but we sell audiences to advertisers,” Smith said. “If Ford wants to reach a male audience aged 25 to 35 in the Midwest, we can do that. And if you don’t fall into that category, then you won’t see that ad.”

In addition to contextually appropriate ads tailored to the audience, Hulu is also mindful of ad repetition (“Zero people want to see the same ad five times in one hour,” Smith said) and providing viewers with the option not to see ads. Hulu offers commercial-free streaming options subscribers can add onto the company’s live-TV plan or its streaming library plan.

“Consumers are expecting experiences that are tailored to their needs,” Smith said. “Hulu, Spotify, Amazon—all these companies are working to empower the consumer.”

Source: adweek.com; 20 Nov 2017

Netflix Could Become Industry’s Biggest Spender On Content In 2018

Netflix says it may spend as much as $8 billion on content in 2018 — a figure that could make it the biggest content buyer of any media or technology company.

The company slipped the figure into its quarterly letter to shareholders Monday evening, adding that it had $17 billion in content commitments over the next few years, and is expected to spend between $7 billion and $8 billion on content in 2018.

For comparison, the $8 billion figure would be nearly twice what broadcast networks like NBC and CBS spend on content, according to data from SNL Kagan and Boston Consulting Group.

The only other company to spend more on content than Netflix until now has been ESPN, which totalled an estimated $7.3 billion in 2016, largely due to expensive live sports rights.

If ESPN’s spend is similar to what it was in 2016, Netflix could be poised to surpass the Disney-owned cable sports giant. Of course, sports rights tend to rise in price over time, thanks to contracts that were signed years ago, before the cable bundle began to fray. So ESPN’s spot atop the content world may yet be secure.

Netflix’s rapidly growing content spend adds to its competitive challenge for ad-supported media. The more cash it spends on content, the more eyeballs Netflix can steal from other sources of video, including many ad-supported companies.

Source: mediapost.com; 17 Oct 2017