Streaming platforms will spend more than $40 billion on content this year, with major players like Netflix and Disney+ each spending $8 billion more than last year.
That historic investment has generated breakout hits like “The Gray Man” and “She-Hulk,” but the tsunami of original content has created unintended consequences for streamers as they race to pump out content like never before to capture scarce and shrinking audience attention. As consumers, we are simply overwhelmed by the number of choices we have today.
Which means that in today’s war for consumer attention, just because you build it, doesn't mean viewers will come to it. Amid a crowded market, increased subscription costs, and in some cases shrinking subscriber bases, it’s harder than ever for streamers to stand out.
We have a new competitive dynamic where platforms have only a very short window to attract and capture as much of the audience as possible, leveraging buzz, excitement, earned media and paid promotions all at once. There’s a need for streaming providers to market their new programming very efficiently and effectively in order to seize on the ever-shrinking window of attention.
This means looking closely at viewership patterns, market and competitive dynamics to plan how best to launch new shows attract new viewers and lure back existing subscribers, while also retaining viewers to check out other programs on the platform. But the bottom line is that streamers must go beyond in-platform discoverability (their historical strategy) and leverage paid and earned media across channels all at once in order to widen the window at the expense of their competitors. With only 24 hours in a day, the real scarcity they will have to fight for, is consumer time and attention.
Churn becomes the norm
Data shows that viewers have a tendency to sample programming across multiple streamers, rather than latch on to what a single has to offer.
More than half of HBO Max, Apple TV+, Hulu, and Amazon Prime Video viewers watched just one of each platforms’ top 50 shows during the last quarter. Disney+ and Netflix fared slightly better than the rest of the pack, with a lesser two-thirds of their viewers tuning into just one program.
Further, more than three-quarters of premiere viewership occurs within the first two weeks after new shows are released. Among top streaming shows, all but one had driven more than 70% of its cumulative 50-day viewership by the 15th day after release. Fast forward to the 30th day after release and this percentage jumps to 86%.
Subscription cycling
Subscription cycling, where viewers sign up to view one show and then cancel the service, is on the rise. Viewers are more likely to binge a tentpole show, then cancel their subscription and move on to another service, which heightens the narrowing window of engagement for streamers.
Data shows about 40% of viewers binge entire seasons of recurring shows within the first five days of release. More than 40% of season finishers binged Upload (47%) on Amazon Prime Video, Russian Doll (45%) on Netflix, and Stranger Things, Season 4 Volume 1 (41%) within the first five days of the shows’ release dates.
Release strategies
The competition for content is at an all-time high and capturing the window of opportunity for audiences is proving to be a sizable challenge for streamers as they look to grow their bases.
Platforms must think differently about how they market their content. SVODs will need to find much more strategic ways of driving engagement before, during, and after launch. It's imperative they prove they are worth the price tag, whether that be through innovative programming options or offering new, cheaper AVOD tiered offerings.
One option is an AVOD model that “windows” original content for SVOD services for 15-30 days before that content is released to AVOD-supported tiers. This entices viewers to keep their monthly subscriptions active and also doesn’t negatively impact current subscribers who prefer to watch premiered content as soon as it becomes available.
Another other option to widen the window is old-fashioned: marketing programs more effectively. Simply splurging on billboards, trailers, and takeover campaigns won’t work, because it’s not working right now. Budgets need to move from awareness towards conversion and retention.
The conversion stage in particular would benefit from a more data-driven approach. This means digging into viewership insights to understand who is actually watching what and using those insights to market content. This should influence how trials are targeted, along with the content featured in trial subscriptions. This works with retention as well, where streamers need to identify fans of big tentpole shows and make them aware of other upcoming content that matches their interests. Once streamers optimize their marketing spend to reach likely viewers, they can perform a closed loop measurement assessment to find out just how well it worked.
The streaming wars are showing no signs of slowing down. The major platforms are all eager to turn a profit and keep viewers engaged, but if they don’t think strategically, all of the money spent on developing and marketing will go to a show that is forgotten the week after it launches.
Ashwin Navin is the Co-founder and Chief Executive Officer at Samba TV, a global provider in television technology and omniscreen advertising and analytics. Navin launched Samba TV at CES in 2009 with a product demo that illustrated how an internet-connected TV could be seamlessly integrated into digital lifestyle. Thirteen years later, the company has surpassed over $100 million in advertising revenue, expanded to top international markets all over the globe, and has partnered with some of the world’s most influential companies like Disney and Twitter.
Navin brings over 20 years of co-founder and chief executive leadership to his role at Samba TV, with deep expertise in starting and scaling successful businesses in the media technology space. A serial entrepreneur, Navin also co-founded BitTorrent, Inc., which revolutionized open-source protocol into a technology platform for P2P content distribution.
Prior to that he started Epoch Partners, a fintech company acquired in 2001 by Goldman Sachs. He also served on Yahoo!’s corporate development team. A first generation American, Navin's family immigrated to the United States from India in the 1970s to pursue the American dream. A graduate of Claremont McKenna College, Navin continues to invest and mentor young entrepreneurs.
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.