Parks Associates latest consumer research reports that three out of the top five factors driving OTT service subscriptions involve content and a top reason for consumers leaving a service is the inability to find relevant content. As 2021 heads into its final months, OTT services are continuing to adapt their business models and pricing strategies and expand their content libraries to attract and retain subscribers.
Among the latest trends and announcements from Q3, these are noteworthy:
Disney+ experiments with case-by-case theatrical release windows
In 2020, Disney+ unveiled a three-pronged hybrid strategy that includes theatrically exclusive films, simultaneous releases in theaters and on transactional services, and streaming exclusives. Disney unveiled the transactional “Premier Access” tier on Disney+ with “Mulan” in September 2020, which required subscribers to pay an additional $30 fee in addition to their monthly recurring charges that already cost $7 per month.
The September 2021 release of Marvel Studios film “Shang Chi and the Legend of the Ten Rings” was the first Marvel Studios film with a shortened 45-day theatrical window, halving the traditional 90-day window.
Experimentation allows Disney to understand viewing trends. Data from Parks Associates indicates that 44% of viewers are unlikely to subscribe to an online video service for access to an in-demand title. Disney is wise to use its streaming arm to experiment with audience preferences.
While titles unlikely to succeed theatrically are better suited as supplemental library titles on Disney+, Disney will be more sensitive with highly anticipated projects. A diversified approach allows Disney to continue experimenting with theatrical and transactional windowing as it observes changing viewing habits.
AMC+ offers one-year free trial to Verizon customers
AMC Networks is offering 12 months of free access to AMC+ to select Verizon wireless and Fios customers. The company aims to expose viewers to the combined bundled offering through strategic promotions including the extended partnership with Sling TV to give Verizon Wireless, Fios, and 5G Home customers two free months and its entry into the Canadian market through aggregators Apple TV and Amazon Prime Video Channels.
The exposure to Verizon customers comes during a critical growth period for AMC+ and could result in the service joining a core middle-class of streaming services that make up viewers’ streaming stack. Extended wireless promotions have benefited other services and AMC+ wants to replicate their success. Disney+ granted new Verizon customers a year of free access within its launch and was successful in retaining subscriptions once the promotion concluded. Discovery+ offered a similar deal at launch and, given its strong adoption rates during launch, will likely see similar loyalty; Discovery+ over performed in launch adoptions and saw high adoption rates for its higher priced tiers.
AMC+ does not have the novelty of being a new service, but it is a good time to offer the promotion given the expansions to its content library. The promotion launches as AMC+ debuts the final season of its most successful original program “The Walking Dead” and will attract attention when the show enters its final season in August.
AT&T TV rebranded as DirecTV Stream
AT&T has officially spun-off DirecTV and rebranded AT&T TV as DirecTV Stream in Q3 2021. AT&T has confused users with its frequent revamps and unclear branding of its streaming assets. The failures of DirecTV Now, AT&T TV and AT&T TV Now coincided with an industry-wide shift towards OTT. The debt accrued from the loss of pay TV is partially responsible for AT&T’s pending deal to sell WarnerMedia and its regional sports networks to Discovery, Inc. The spin off arrangement under independent management will try once again to repurpose DirectTV’s service under its original brand.
Retaining the same pricing structure should aid in retaining existing subscribers. It is unclear if DirecTV Stream is simply another rebranding campaign or if there are plans to revamp the service completely. Clear communication on service updates to existing subscribers is critical before investing in incentives to attract new users.
DirecTV Stream retains its most valuable assets of the exclusive rights to NFL Sunday Ticket and the top cable channels. However, simplifying the content options by cutting AT&T brands HBO Max, AT&T SportsNet, and the AT&T U-verse internet service creates a more focused video service without the expectations of supplementing additional properties.
AccuWeather launches free OTT service AccuWeather Now
AccuWeather Now has highlighted the appeal to cord cutters and cord nevers who don’t have access to weather coverage that is often a necessity for areas experiencing extreme conditions. The inclusion of non-weather-related news content can help make AccuWeather Now a source of critical public health information. With free access, AccuWeather Now has low barriers to user acquisition, and may be able to court viewers who subscribe to paid services or pay TV viewers who retain their cable subscriptions mostly for weather updates.
AccuWeather benefits from its existing app that can be updated to include OTT content. The next stage of growth includes adding smart TV access, potentially with interactive features to distinguish its streaming service from the existing interface.
As the year ends, consumers continue to look for new ways to view entertainment and OTT services continue to experiment with different models. With churn become expected in some ways, OTT services look to capitalize on the content offerings and bundled offerings to attract and viewers.
Jennifer manages the research department and Parks Associates' process for producing high-quality, relevant, and meaningful research. Jennifer also leads and advises on syndicated and custom research projects across all connected consumer verticals and guides questionnaire development for Parks Associates’ extensive consumer analytics survey program. Jennifer is a certified focus group moderator, with training from the Burke Institute.
Liam Gaughan is a researcher at Parks Associates, specializing in entertainment content and services. He is a published writer and journalist with over seven years’ experience covering entertainment content, media, and streaming distribution. Liam earned a bachelor’s degree in digital and print journalism from the University of North Texas with a minor in political science.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce Video staff. They do not represent the opinions of Fierce Video.