SVOD
Is Hollywood Losing its Influence Over Global Audiences?
Matt Ross – SoDA Product Manager, Digital I
Key Takeaways
- There has been increased viewership of non-English language content on streaming platforms, even in the U.S.
- English-language and U.S. content still dominate in the U.S.
- U.S. content remains critical to the global entertainment ecosystem.
- Based on the success of Squid Game, SVOD production budgets could increasingly be spent outside the U.S.
- However, financially, the U.S. is still in a prime position since the large streaming companies are predominantly from the U.S.
Attitudes about Ad-Supported Content
Researchers Jon Giegengack, Founder & Principal, HUB Entertainment Research, and David Tice, Research Senior Consultant, HUB Entertainment Research, reported on new insights from their ongoing series of surveys on trends in consumers’ viewing behaviors, about ad-supported versus ad-free content.
- “Recent discussions about consumers’ attitudes towards video advertising have advanced the hypothesis that the rise of SVODs suggests that consumers reject ad-supported content. This research did not find support for that assumption.”
- “Both the increase in usage of ad-supported platforms (AVOD and FAST) and HUB’s attitudinal data indicate that most consumers are willing to accept advertising.”
- “The researchers see little change in attitudes about video advertising and no evidence of an overall retreat from ad-supported media”.
A New Trend in Streaming
Based on his latest analyses of Nielsen’s data, Brian Fuhrer’s presentation focused on a new trend in viewer behavior, STRIVE: Streaming Live or Linear Streaming through an app. Fuhrer is SVP, Product Strategy & Thought Leadership at Nielsen.
- Viewers’ use of streaming services continues to increase—and it is changing. Nielsen finds the strongest growth in Linear Streaming, which now accounts for 11% of total streaming.
- Apps make access to traditional TV easier for many viewers, and they offer new digital content for advertisers.
- As a result of the increase in streaming competitors—more SVODs, more AVODs and more FASTs—the streaming universe is now fragmenting too.
The Future Shape of the TV Landscape
A presentation from the Boston Consulting Group characterizes the future of TV as, “value destruction and creation”. The Columbia University Institute for Tele-Information (CITI) and the International Media Management Academic Association (IMMAA) have shared a presentation entitled, “Consumer Trends in Streaming Video and the Future Shape of the TV Landscape,” with the ARF. It was received on March 3rd from John Rose, Former Head of Technology, Media, & Telecommunications Practice of the Boston Consulting Group. Based on John’s analyses of a wide range of data, these are some conclusions:
- There will be no more than three to four successful, general entertainment SVOD services –and not all of those will be pure SVOD. To survive, “aspiring general entertainment SVOD services,” will have to evolve into hybrid models, partner with cable networks or find new business models.
- Traditional cable networks are at material risk and survival will require disruptive evolution into an integrated, AVOD/hybrid model. Genre-specific SVOD and tonnage FAST will do well, taking share from cable networks.
- Value will be drained from traditional distribution (local stations, MVPDs, vMVPDs, theatrical exhibition). Content creators and rights holders will maintain value, with lower downside and upside. Value will be extracted by “Big Tech” in certain segments—most likely general entertainment and sports—as loss leaders for non-video services.
Source: Rose, J. (2022, March 3). “Consumer Trends in Streaming Video and the Future Shape of the TV Landscape”, Columbia University Institute for Tele-Information (CITI) and the International Media Management Academic Association (IMMAA).
Full presentation available by request from Horst Stipp, PhD., EVP Research & Innovation, the ARF: horst@thearf.org
Member Only Access
NYCU: Streaming Faces New Challenges
Accenture says that streaming has made tremendous strides in the past decade, but as the landscape has matured, consumers increasingly find streaming complicated, expensive and hard to use. Even so, the company is optimistic that the solution to the most important issues, a smart aggregator, will be coming. Based on global surveys, Accenture concludes that consumers are increasingly seeing negatives in their streaming experience. Three issues stand out: 1. Getting caught in "rabbit holes" As they adopt more services, consumers must manually browse through platforms, screens and menus until they eventually find what they're looking for. Navigating through OTT services is like entering different rabbit holes, each with its own entry and exit—a turnoff for consumers. This is borne out by our survey, which finds that 60% of consumers consider the process of navigating among these different services "a little" to "very" frustrating, and nearly half (44%) spend more than six minutes trying to find something to watch. 2. Encountering inefficient bundles The monthly payments for more services are a growing problem. In fact, many consumers are approaching their upper limit on the amount of money they'll spend for streaming services. According to our survey, 33% of consumers globally say they will "somewhat" or "greatly" decrease spend on media and entertainment across subscriptions and one-time purchases in the next 12 months. 3. Algorithms remained scattered across providers Many algorithms generate recommendations based on an incomplete viewing history—and those recommendations can be wildly off base. Furthermore, the reliance on the algorithm to pitch consumers TV shows doesn't allow them to tune the model, except through actual show selection. Accenture suggests the following solution to these issues:
- For streaming to continue to grow and fulfill its potential, we believe a big change to the ecosystem is needed: the addition of a smart aggregator sitting across multiple platforms, that dramatically increases viewers' control over the content they watch. This aggregator can play an important role in eliminating the three major issues currently plaguing the streaming experience and frustrating consumers.
Source: Peters, J. And Flynn, M. (2022, January 4). Streaming's Next Act. Accenture.
Member Only AccessNYCU: Innovative Advertising Solutions
Two content providers are offering new, innovative ways to advertise on their platforms.
Source: Oscar, M. (2021, November 22). VIDEO, HocusFocus.
Member Only AccessNYCU: A “Kaleidoscope” of Streaming Formats
The wide world of ad-supported, streaming platforms continues to grow and evolve. According to a new report from TDG Research, 24% of households that use such a service use it daily, 32% weekly and 44% monthly or less.
The report’s author, TDG Senior Analyst Doug Montgomery, points out that while there’s a “kaleidoscope” of formats and providers, three core revenue models are still in place: à la carte, subscription and free. He also points out that there is “widespread confusion” about the meaning of AVOD and its variations. Little wonder. Look at the TDG graphic below, showing the various streaming options now out there — a veritable alphabet soup of acronyms.
Indeed, Montgomery argues that the term “AVOD” should be dropped in favor of the more accurate “ad-supported streaming video.”
Source: Lukovitz, K. (2021, August 19). Six In 10 CTV Households Watch Free, Ad-Supported Streamers. Commentary: AdvancedTVINSIDER, MediaPost.
SVOD Users See Plenty to Like About Streaming Services via e-marketer (source: TiVo)
What's drawing internet users to subscription video-on-demand services like Netflix and Amazon Prime? Pretty much everything the services offer, it turns out—selection, convenience, lack of ads, searchability, flexibility of screens and even the original programming.
TiVo surveyed 3,140 internet users ages 18 and older in Canada and the US during Q3 2016. More than half said convenience was one of the main reasons they use rental or SVOD services. Nearly four out of ten said they use them because they can watch certain TV shows or stream entire seasons of their favorite shows. In addition, more than a quarter said it’s easier for them to find what they’re looking for.