CES Talks Seismic Impact of Streaming
2020 may mark the year that streaming platforms became the ubiquitous way audiences consumed content and left traditional media companies behind.
The Consumer Technology Association (CTA) projects a record $112 billion spend on streaming services and software in 2021, an 11% growth over 2020.
In a CES tech trends briefing, the CTA also noted that Disney+ hit 50 million subscribers in just five months after launch, in contrast to the 7 years it took Netflix.
"The point is that the last few months will transform the overall economy for the next decade," said Steve Koenig, the CTA's VP of market research.
"More things have happened in streaming this past year than in the previous decade combined, echoed Brian Fuhrer, SVP product strategy & thought leadership for Nielsen in a CES presentation dissecting the year's media activity.
"About a quarter of TV usage is now streaming (among OTT capable homes)," he said. "The early adoption phase is behind us. Older demographics, a mainstay of traditional TV, continue to embrace streaming. During the 'stay at home' period, a lot more people put the plumbing in to stream. It was a big period of enablement. People figured out how to get credentials and tried a lot of services. We think that is going to be the pivot for a lot of media consumption going forward as older demos increase and maintain their usage and sampling [of services]."
Research out this week from Ampere Analysis finds the average U.S. household now stacks an average of four different SVOD services. In the five largest Western European territories, homes average two services. Across both markets, almost 10% of SVOD homes already take five or more services.
"AVOD, studio-direct streaming launches, the strengthening of local and broadcaster-led streaming, and the turbo-boost that came out of the blue in the form of COVID-19 have brought the industry to a pivot," said Guy Bisson, Ampere's research director. "That point will lead to a shift in thinking that will change the way content creators, distributors and content aggregators, platforms and channels think about streaming in the wider TV market. In 2021, compounding is here to stay in every portion of the streaming value chain."
Ampere predicts compounding—in the sense of both combining and adding to—will characterize global TV through 2021 as the streaming TV boom forces a re-engineering of the TV value chain and the strategies for getting TV to the end viewer.
The Great Unbundling
"This is not a winner take all market," said Scott Reich, SVP programming, Pluto TV, which is ViacomCBS' AVOD service. "There's been a lot of talk about how many SVODs the consumer can support. I think you'll see more experimentation from the consumer. They will decide what the new bundle is going to be. The opportunity from us is for them to have enormous options for free and enormous options on the paid side. It's a win-win."
Speaking on a CES panel titled, "Great Unbundling and Entertainment Transformed," Reich said Pluto TV had seen time spent viewing and frequency of viewing rise last year.
"Being the free player in this space there is zero barrier to entry, so we saw new viewers come to us as well," reported Reich. "There was a massive influx around election time. So, it was an interesting combination of people coming in for COVID and election news and then diving into escapist content."
Pluto, he said, was designed as more of a lean back experience than your conventional on-demand service. It also operates as a complementary to its parents paid content offers which includes premium shows like Yellowstone from Paramount.
"During 2020 we looked at a lot of data and optimised the organization of the platform to get people to watch new categories like reality shows and classic TV. We added a lot of Viacom and CBS content. We're constantly figuring out how we complement Viacom's linear channels."
Andrew McCollum, CEO of subscription-based live and on demand service Philo, said the site had also seen a big surge in subscribers during the pandemic and a particular glut in consumption of kids' content when they were stuck home.
He voiced concern that "a prolonged recession" could have an impact on his business. Nonetheless, the service—which costs $20 a month—hasn't raised its price and McCollum has no plans to do so.
"It was never our intention to be the lowest-cost service, but it was to be the best value service. Philo existed as a college TV service initially. When we looked at our data and talking about bringing service to market. We felt the lifestyle market was under represented. We felt like we could bring a package of channels to market but not at such a low price that we'd have to increase rapidly over time to make the service sustainable."
He added, "Free won't support all the great content that's being created, unfortunately."
With continued fragmentation in the streaming market—reminiscent of similar competition in the growth of the cable market observed Nielsen's Fuhrer—how do streaming brands continue to grow and innovate in this new era and not get lost in the noise?
Speaking on this topic at virtual CES, Stefanie Meyers, SVP, distribution for STARZ said, "We are all in a battle to make sure customers can find our content. STARZ realised very early on that having a clear strategy is critical. We have one product. Our content is the same everywhere and we are focused on making sure the consumer can reach our content on devices or third-party distributors."
COVID is widely understood to have brought forward the future of TV and of streaming. New tech-driven formats are being primed for primetime.
"COVID has pulled trends forward like digital co-viewing where two people in different locations watch a show simultaneously," said Sarah Lyons, SVP, product experience for HBOMax (WarnerMedia).
Amazon's VP and GM for Fire TV Sandeep Gupta suggested further intimacy with the TV.
"Conversational TV started with Alexa for search and discovery, and now you can take it a step further and ask 'What was I watching?', 'What do you think I should be watching?' You can see where this goes next where you have a relationship with the TV and a portal into the digital world."
Kids' Movies and Weekly Releases Dominate
In Nielsen's data breakdown of the year in streaming, Fuhrer highlighted the growth of audiences watching live linear TV through streaming apps provided by the likes of Comcast Xfinity and Sling TV.
"SVOD remains the biggest draw at 55%, which is no surprise, but if you take out the main five streamers (Netflix, Hulu, Amazon Prime Video, Disney+ and YouTube) the biggest category is linear TV," he noted. "It's one we see expanding significantly."
Fuhrer attributed this to cable companies making a strategic decision during lockdown to "make their apps more appealing in features and price."
"We think people like idea of streaming live TV through an app and not a cable box," he added.
Other take-aways from the analyst showed the value for SVODs in reverting to traditional weekly release schedules for their originals (per The Mandalorian) rather than dropping the whole series at one time.
"This strategy extracts more value out of premium content," he said. "It's watercooler TV giving people time to talk about each episode."
He predicted more of this, particularly with the contraction of new content creation during COVID.
The most viewed movies on streaming services were kids' films, including older films like Moana and Zootopia. Disney+ scored 7 out of the top ten movie hits for 2020 (Frozen II leading the way with 15 billion minutes viewed). The reason, Fuhrer suggested, was that kids watch repeat views of content.
The most streamed content in the U.S. in 2020, period, was The Office (U.S version) which totalled nearly 60 billion minutes viewed. However, since January 1 the series has relocated from Netflix to Peacock.
The number 1 original series was Netflix' Ozark (30 billion minutes viewed in 2020). Indeed, 4 of the top 5 original shows watched in the U.S were made by Netflix (Lucifer, 19 billion; The Crown, 16.3 billion; Tiger King, 15.6 billion; with Disney+ The Mandalorian in fifth place with 14.5bn)
"Kids movies and episodic weekly releases will be key considerations," he said.
Photo: Jason Bateman as Marty Byrde in episode 310 of Ozark, Cr. Courtesy of Netflix ©2020
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