Research / Insights on current and emerging industry topics
How video streaming services innovate and stay competitiveJanuary 26, 2022 | By Rande Price, Research VP – DCN @Randeloo
Streaming is popular but competition is fierce. It seems like every major network and media company has launched a streaming service.
Last week, Netflix released its 4Q 2021 earnings. The company closed the year with 221.8 million subscribers. However, Netflix fell short of its Q4 new subscriber forecast. Pivotal Research Group analyst Jeff Wlodarczak comments that streaming services are adjusting to the new norm of subscription growth compared to the accelerated sign-ups witnessed during 2020’s lockdown. Wlodarczak believes, “Streaming is not over; it is the future.”
A number of industry analysts have identified strategies and offer insight into the streaming marketplace’s next steps.
MarketWatch points to global programming investment as a top priority for streaming services. And the investment in content only bears this out.
- Netflix’s hit series from South Korea, Squid Game, is one of many international success stories and a clear winner for the platform. Expect more foreign-language series to be developed as Netflix turns international growth, especially in Asia, India and Latin America.
- Amazon’s Prime Video will offer more programming in India’s Hindi, Tamil, and Telugu languages. It’s India service registered tripled its viewing hours over the past two years there.
- Apple TV+ will debut its first Russian-language show, the thriller “Container,” in the spring.
- Disney+ plans 50 Asian originals by 2023, as it expands to South Korea, Hong Kong, and Taiwan.
- HBO Max debuts in Europe in early 2022.
- Paramount+ also debuts in South Korea and Western Europe.
- Peacock expanded to Europe (on Sky platforms), with more than 50 Spanish-language projects with Telemundo.
Mix and matching viewing strategies
While Linear TV marathons introduced us to binge viewing, Netflix’s flexible nature made it an everyday behavior. TheRinger identifies the different episode distribution strategies to keep viewers engaged and coming back to view more. As noted with Netflix, flexibility is essential and a reminder that different approaches offer different results. A buzz-worthy binge (all episodes released at once) can be great PR for a new series release. Additionally, a scheduled infusion of new episodes can draws viewers back week after week.
Apple TV+ offers a “demi-binge” strategy, debuting with a batch of three episodes, then airing the remaining seven one at a time.
WarnerMedia’s HBO Max uses a hybrid approach, breaking up seasons into packs of two or three episodes released over several weeks.
Interestingly, Peacock’s promotes binging but at higher pricing for specific series. Seasons 1 and 2 of The Office are available at the lowest-priced monthly subscription price of $4.99 a month. To unlock every episode, extended cuts, never-before-seen-footage, and watch commercial-free, consumers pay $9.99 — the highest tier.
Amazon’s The Marvelous Mrs. Maisel will switch from releasing all eight episodes at once to two a week for four weeks. Fear not, the binging release strategy is far from over. Rather, this is simply different viewing models in play. And they are not necessarily mutually exclusive.
Merger, acquisitions, and differentiation
As Netflix invests in gaming, Amazon looks to its NFL and Thursday Night Football. Both are clear points of differentiation. Other services look to corporate and sibling-studio deals to offer HBO Max, Peacock, and Paramount+ access to new movies releases 45 days after they open in theaters.
CNBC Tech Reporter Alex Sherman points to the significance of mergers. He believes that Paramount+ and Peacock won’t last as standalone streaming services, and a merger is likely in their future.
Discovery Inc.’s acquisition of WarnerMedia (expected to be complete in mid-2022) will combine the streaming platform of Discovery+ and HBO Max. Combined, they will have approximately 100 million subscribers.
Streaming platforms are making significant investments in new and innovative content and unique deal-making to differentiate themselves from competitors. They need to keep their customers consistently engaged, especially as consumers begin to reevaluate their multiple subscriptions to access the content they want to watch.