With the vast majority of the world population spending most of their time at home in recent weeks, viewership of streaming service content has skyrocketed. With COVID-19 restrictions forcing people to stay home and practice social distancing, more people are turning to subscription services to binge-watch movies and television as a way to pass the time.
Some services have added new content as a result. For example, Disney added the popular “Frozen 2” to Disney Plus three months earlier than it was set to release on the platform, and the wildly popular “Tiger King” series debuted on Netflix. Nielsen data reports that about 34 million viewers watched “Tiger King” in the first 10 days after its release.
Whichever movie, television show or documentary you decide to watch, you will not only have a wide variety of content to choose from but a plethora of streaming services as well.
It was not so long ago that Netflix subscribers had to wait days for a movie to be delivered to their homes. Now, in the age of digital, the high volume of Netflix content is available anywhere and at a user’s fingertips. Other media and entertainment companies were encouraged to follow suit and make their content readily available to viewers through a digital platform, if not to create original movie and television content, but to stay relevant in the changing tides of the digital world.
In January 2020, NBC announced it is officially launching its streaming service, Peacock, this summer. One of the newest in a field contending with players like Hulu, Apple TV, HBO, Amazon and Disney Plus, NBC’s Peacock will be home to original network content, like the popular comedy series “Parks and Rec.”
As other network channels and entertainment companies try to find their respective places in the digital subscription space, they will seek to regain the rights of some of their most-streamed original content from third-party services (think: Netflix losing “Friends” to HBO Max). Services like Netflix used to be the go-to for many of these popular old shows, but as companies create their own streaming services, customers may have to subscribe to more than one in order to watch a variety of their old favorite shows.
Consumers Weigh Options – Should They Cut The Cord?
While many people are just trying to figure out what services to subscribe to, others are debating whether they should ditch their cable companies altogether for their choice of subscriptions instead. Cutting the cord and switching to all streaming services instead of paying a monthly cable bill for hundreds of unwatched channels is a major draw for consumers looking to save money. But with all of the current services to choose from, is it likely that people will sign up for new streaming services?
Cameron Miller, assistant professor of management at the Martin J. Whitman School of Management at Syracuse University, believes that consumers will try new services as long as they offer quality content, and especially if the content is exclusive to the streaming service. His research interests include technology strategy and innovation, competitive strategy and evolutionary economics.
“Service providers are offering low prices and do not lock customers into long-term contracts, so the risk to try these services appears to be low,” he says. “I expect that many households will subscribe or use several streaming services at once if they are not already doing so.”
Miller cautions, however, that if streaming services do not consistently create access to new and original content, then customers will switch. Original content plays a significant role in drawing users to streaming services. For example, Disney Plus original, “The Mandalorian,” helped the service gain 10 million subscribers on the day of the show’s debut.
For media organizations looking to break into this market, Miller says that for these organizations to be successful, they will need access to content.
“Cable providers probably believe that customers will shift to streaming, so they might as well offer their own services,” Miller explains. “It may be tough to offer a streaming service in which you are a simple aggregator of others’ content because all the major content owners will be competing against you.”
Miller says that there is a straightforward way for these media organizations to differentiate themselves if they decide to launch their own streaming services, and that is with exclusive content; but, creating popular content is not easy.
“Right now, the traditional media competitors are the bigger players in streaming services, and huge firms like Apple and Amazon that have a lot of capital to toss into content generation and acquisition have entered into the mix,” Miller says. “So, I expect that the content arms race will continue to ramp up.”
In terms of competitive strategy, Miller offers the idea of bundling internet and streaming for cable-media companies, or a two-tiered approach in which services would provide a free-with-advertising service and a premium subscription option.
While the world stays at home and streaming companies watch their viewership numbers tick up, one thing is for sure – and that is content is still king.
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