Cutting through the clutter of recent streaming announcements, one key takeaway has been unearthed: the subscription economy is becoming more complicated.
Consider the latest streaming service announcements from Apple (Apple TV+) and Disney (Disney+). Both aim to bring consumers closer to original and omnidigital content via one simplified interface. These announcements are forcing traditional TV providers and streaming platforms alike to rethink their responses to consumer demands to stay relevant.
As brands like Apple become cornerstones of the streaming market, competitors must consider how they are going to differentiate their offerings.
Here are three key elements streaming providers must consider to survive in this crowded and increasingly competitive market:
• Variety is the spice of TV: As streaming market competition heats up, industry players are looking to consumers for answers on how to differentiate their offerings. With big-name players like Netflix and Hulu in the game, becoming the consumer favorite has become a daunting task.
Luckily, consumers know what they want and they’re not afraid to tell businesses. Optimizing personalization options remains key for subscription businesses. While this seems obvious, consumers feel lukewarm about the content discoverability and recommendations options currently available. In fact, only 12% of consumers say they are unable to find content on streaming platforms easily.
However, consumers tend to rely on what’s familiar and pay TV is still a cornerstone in society. Nineteen percent of consumers claim to be in a “committed relationship” with their cable service (up 17% from the previous year). Regardless of the countless streaming options available, and despite the fact that total pay TV subscriptions declined from 73% to 67% in 2018, many believe cable is still the ideal option for their household. It’s important that streaming providers recognize this, especially when it comes to older generations.
• Next-gen tech and original content are key to differentiation: In the face of digital transformation, streaming services cannot shy away from adopting technologies like artificial intelligence and blockchain. With more than one-third of consumers (36%) believing it needs to be easier to find content on streaming platforms, AI can help simplify this process. Many providers are leveraging AI to personalize the user experience and offer greater visibility into how their data is used to make recommendations.
Utilizing blockchain can help services stay relevant. By consolidating content and payments, providers can streamline a process most consumers would rather spend limited time on. This is an attractive prospect for customers, as 51% say they wish they could pay just one monthly fee for all of the video content they watch.
Introducing original content is one of the key ways streaming providers have differentiated themselves from pay TV providers. By offering exclusive content, customers can pick which services to subscribe to based upon what interests them. Original content will also incentivize consumers to subscribe to multiple platforms as they seek out different services’ offerings.
• Immersive experiences are essential to engagement: While gaming and immersive content remain on the edges of the mainstream, new technological innovations offer an unprecedented opportunity to bring them to the forefront of the streaming market. Virtual reality is poised to catapult consumers from their living rooms and into Minecraft or Fortnite. Consumers are also ready for immersive content, with 54% saying they would like to interact with movies in the future.
Engagement and gaming are synonymous, and providers need to be aware of the critical role engagement plays in creating immersive experiences. Companies like Google are starting to dip their toes into the space and we can expect streaming options for games to explode in popularity. Streaming has no chance of slowing down, and consumers will continue to seek out platforms that best suit their needs. However, there is a final item on the list that consumers want to check off before signing up.
Transparency from streaming platforms is the most crucial element in staying afloat in this overcrowded market. Providing clarity on how personal data is being used is non-negotiable for consumers. With a variety of platforms to choose from, it’s likely that those with the most transparent practices will win the business of consumers. Personalization, engagement and ease of use are the core pillars that make up a winning service. However, earning consumer confidence needs to be the first step and bottom line for any streaming provider to be truly successful.
Greg Boyer is a U.S. partner at PwC.
