How Niche Streaming Services Are Changing The Game
The streaming platform landscape is looking increasingly fragmented. Ever since Amazon Prime Video grew to become a legitimate rival to Netflix, more and more platforms have put their hats in the streaming ring, including Disney+, Peacock, Apple TV+, and even short-format misfires like Quibi.
While these major players dominate the on-demand video streaming market, the fact that no single service can be considered dominant anymore has opened the door for smaller, more niche streaming services to spring up. You name it, there's now a streaming platform available for it. Gamers, food-lovers, fashionistas, horror fans, culture vultures, anime fans—all of these consumer sub-groups, and more, are catered to in the world of streaming.
And this isn't just happening in the video space. Specialty streaming services offering particular genres of music are trying to grow in the cracks of the market between Spotify, Apple and Amazon. Video game streaming (cloud gaming)—itself a niche proposition until recently—now includes a whole range of services from which to choose, such as Playstation Now, Xbox Game Pass, Nvidia Geforce Now, and our own company, Antstream Arcade. And this list is only set to get longer as more services enter the space.
So just how viable is this in the long term? No matter how many streaming services there are, there is always going to be a ceiling on how much users are going to pay and the number of services to which they will subscribe. Especially right now given the current state of the economy, consumers are naturally looking at what services offer the best bang for their buck in terms of what they actually enjoy watching—as opposed to scrolling through extensive and broadly varied catalogues like on Netflix, Amazon and Hulu.
That isn't to say that broad platforms don't have their place, but nobody is going to watch all of the content on Netflix. In fact, you'd be hard pressed to find someone who likes most of it - just like no one likes every song on Spotify or every game on Steam. But for someone who is into anime, a more focused service like Crunchyroll is going to be more appealing. For reality TV lovers, Hayu might make more financial sense. User experience, price, brand, and marketing are all important, but consumers pay for services in order to have something to enjoy. And often, subscribers will sign up to a service more for a particular program than for the service as a whole.
There is no need for companies like horror-specialist Shudder and gaming streamer Hitbox to try to be all things to all people, as people are already well aware of what they like the most. Specialization, rather than being a limiting factor, can now be a force multiplier when it comes to delivering choices to customers interested in a very specific type of content. Niche services have the inbuilt ability to understand and cater to their specific target audience's tastes in a way that the larger companies cannot. Being able to curate viewers' experiences with shows and movies they might not otherwise find is another advantage and allows these companies to establish authenticity with their audience and a more loyal following among their customers. Put simply they are able to focus on the vertical, rather than the horizontal.
The obvious stumbling block in a more limited customer base is that it would appear to put a ceiling on potential revenues and so also impact the ability to pay for content. To counter this the content offering needs to be niche but not too niche, provide something that sets it aside from the larger platforms in order to counteract subscription fatigue, and have content producers/rights holders themselves invested in the success of the platform.
Once enough of these more niche offerings succeed, we will likely see a consolidation of the industry as it becomes more appealing for larger streaming platforms to buy smaller competitors with established audiences. Or we will go the way of the cable model for streaming, which is bundling services together in order to maximize appeal to broader demographics. In the gaming space we're already seeing this happen, with Xbox adding EA Play to its Game Pass Ultimate memberships at no extra cost, massively increasing the available games on its platform.
Given the myriad social, economic, and business factors in play that will affect the success of niche streaming services, it is all but impossible to put a timeline on any of this. The only certainty is that we are entering a new phase in the “streaming wars” which will play out across music, TV, film, and gaming for years to come.
[Editor's Note: This is a contributed byline from Antstream Arcade. Streaming Media publishes vendor bylines based solely on their value to our readers.]
Best Ever Channels' Jonathan Barbato, TV4 Entertainment's Jon Cody, and Cinedigm's Erick Opeka discuss niche OTT customer-retention strategies in this clip from their OTT Leadership panel at Streaming Media West 2019.
TV4 Entertainment CEO Jon Cody, Shout! Factory SVP Gene Pao, and Ovation SVP William Marks discuss strategies for niche services increasing their reach in this clip from their OTT Leadership Summit panel at Streaming Media West 2019.
Dillon Media Ventures' Rob Dillon, Zendesk's Joe Jorczak, Didja's Jim Long, Brightcove's Mike Green, and Digital Media Strategies' Josette Bonte discuss the discovery challenges niche OTT services face in this clip from Streaming Media West 2019.