At Comperemedia, we’ve been talking with clients for the past few years about the importance of video content aggregation, as consumers demand the ability to customize their video content and, of course, desire convenience. Amazon Channels was a pioneer in streaming aggregation, gradually bringing more than 200 streaming video options to its Prime Video subscribers as optional add-ons. An nScreenMedia report found that a third of Amazon Prime Video subscribers have purchased an add-on through Amazon Channels.
Since the launch of Amazon Channels, more and more platforms are aggregating content in order to offer consumers flexibility and convenience, including The Roku Channel, Apple TV Channels and cable providers. With the streaming wars intensifying, the “aggregation wars” are poised for greater activity as well: everyone wants a piece of this pie—especially connectivity providers.
As many smaller MVPDs drop video in favor of concentrating resources on internet, larger cable providers are looking to streaming video to replace traditional video bundles that no longer resonate with many consumers, particularly younger cohorts. Most recently, Comcast launched Xfinity Flex, its own streaming platform that brings together a wide range of services along with 10,000 free movies and shows via Comcast’s set-top box (Cox, which licenses Comcast’s hardware, offers a similar service). In September, Comcast announced that Flex, originally priced at $5 per month for Xfinity internet subscribers, would be free for internet subs.
Plus, with NBCUniversal’s Peacock launching in April, Flex may become more attractive, since it will also include this service for free. By offering Flex for free, Comcast has a greater opportunity to entice its internet subs to use, and eventually become immersed in, the platform. This, in turn, increases the likelihood that those subs will stay with Comcast—an important consideration as the internet sector faces increasing competition ahead.
With the push to 5G, carriers plan to expand their fixed wireless internet footprints, which makes streaming video bundles all the more important for these providers as well. During the panel “5G, Video and The New All-Wireless Bundle” at this year’s Pay TV Show, T-Mobile CCO Lindsay Gardner asserted the Un-carrier “will be the storefront” for streaming video services. Verizon Head of Content Acquisition & Programming Erin McPherson, also participating in the panel, suggested a similar approach from her company, explaining that YouTube TV (which Verizon promotes with 5G Home Internet) will eventually be just one of many streaming video options available through Verizon. McPherson said that Verizon wants “to offer customers choice,” making it necessary for the carrier to become a video storefront. It’s worth noting that Verizon already has a partnership with Disney, which utilizes the carrier’s 5G Labs, and an extension of this partnership could enable Verizon to bundle Disney’s many streaming services with its fixed and mobile wireless in the future.
Connectivity providers look to streaming video aggregation to bolster their value propositions and drive loyalty. But streaming aggregation leaders Amazon and Roku currently lack connectivity partners. Amazon will likely solve this issue through the internet services it is working to build; the ability to offer connectivity and streaming would make it a formidable competitor to traditional cable providers. For Roku, on the other hand, a takeover seems likely, leaving us to wonder which ISP will eventually acquire the company.
Even as streaming video aggregators look to bring vast content options into a single interface for consumers, they compete on content. For instance, Amazon Channels doesn’t support Netflix, Hulu, or ESPN, and probably won’t offer Disney+ either. Apple TV Channels has similar limitations and offers only a fraction of the services available on Amazon Channels. Obviously, these content exclusions are not ideal for consumers who want to access all their video content from one place, but withholding their services enables SVODs to avoid subscription revenue sharing and data sharing with certain (often competitors’) aggregation platforms. The leading SVODs will maintain their leverage, while the niche players will use aggregators to drive awareness.
This, of course, sounds extremely familiar, and I wonder if, down the road, aggregators and streaming services will face the same contentious contract negotiations that challenge traditional MVPDs and programmers today. For consumers, however, this means they are unlikely to get all their content from one platform and will have to settle instead for most.
Beyond a variety of popular content options, superior personalization will give streaming aggregators a competitive edge. Early 2019 research from Mintel found that less than a third of consumers (30%) said it was hard to pick something to watch because there are so many options. But what happens to that percentage as more big names enter the streaming space, and consumers’ favorite content gets spliced across four, five or six different services? The challenge of locating your favorite content, as well as the obstacle of finding new content that you will probably like, will grow. If content aggregators want to be the ecosystem where consumers go for all their streaming video needs, the responsibility falls on them to help consumers keep track of the content they want to watch, might want to watch, and don’t want to watch, as well as when to pick up or cancel streaming subscriptions. Proactive customization will be more important than ever.
For more from Comperemedia on the shifting video landscape, keep an eye out for Comperemedia’s 2020 Telecom & Media Trends, launching in November.
Emily Groch is Comperemedia’s Director of Insights, Telecommunications. She pairs her deep knowledge of marketing within the telecommunications industry with Mintel’s consumer research, trends, and competitive marketing intelligence to build timely, meaningful stories for Mintel and Comperemedia telecom clients. Emily travels throughout the US and Canada to present industry marketing trends and insights to major TV, Internet, and wireless service providers, and their advertising agencies.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceVideo staff. They do not represent the opinions of FierceVideo.