Why Engagement Capabilities Will Define The Future of Media and Entertainment
Streaming media has undergone rapid growth and evolution over the past few years, with ad-supported models gaining traction – evidenced by the success of Netflix's "Basic With Ads" tier now counting 15 million monthly active viewers just one year after launch. However, there appears to be a ceiling to how much consumers are willing to pay in total subscription costs. As major players like Netflix, Hulu, and Amazon look to diversify revenue streams, one area offering significant untapped potential is user engagement.
Heading into 2024, new engagement-focused offerings that move beyond ads to unlock new revenue opportunities will be a crucial element in expanding free, ad-supported TV (FAST) channels. Players in the media and entertainment industry that can successfully introduce creative features and gain viewers’ active involvement in content stand to benefit tremendously.
There are a few ways engagement capabilities can be integrated into existing content to expand revenue streams, the most obvious of which is content gamification. Adding gamified elements into programming incentivizes viewers to watch for longer, and even to make purchases. These microtransactions linked to interactive games, trivia, polls that precede or overlay popular shows can add up quickly across a large subscriber base. For instance, by facilitating just $1 in extra monthly purchases per customer, a provider with 10 million subscribers could boost annual revenue by $120 million on the back of engagement-driven micropayments.
Live commerce and novel applications of artificial intelligence present similar opportunities for entertainment providers to convert fan enthusiasm into revenue via real-time engagement. Shoppable programming, for example, enables the seamless purchase of on-screen products unlocking increased e-commerce sales for advertisers. AI integrations like interactive chatbots, on the other hand, can provide a concierge-style purchasing experience – converting engaged viewers into buyers through hyper-relevant promotions and offers that are native to the viewing experience.
These types of innovative and multi-faceted engagement strategies enhance entertainment offerings, enabling the active involvement of modern audiences. Media companies that creatively involve audiences in what they watch stand to gain significant advantages in three critical areas:
Innovative integrations of interactive components into programming, like the NFL’s augmented Toy Story broadcast, demonstrate new avenues to lengthen viewing sessions by entertaining hard-to-captivate demographics without compromising core fans. As consumer taste continues fragmenting amid endless entertainment choice, customization and personalization will be key. Platforms that allow fans to tailor viewing experiences, such as selecting specialized avatars and camera angles for live events, stand to gain an edge in retaining fickle modern audiences.
Prioritizing investments in mobile-first engagement strategies also promises to pay dividends moving forward. With younger demographics increasingly consuming content predominantly on internet-connected devices, providers need to meet this cohort where they already live. Social media and messaging integrations that tap into digital-native viewing habits can drive higher engagement levels, view times, and, crucially, subscription loyalty.
Integrating social features directly into streaming apps provides an opportunity to foster brand affinity by facilitating authentic fan-to-fan and fan-to-star interactions. Two-way interfaces enable platforms to build owned communities centered around beloved talent and programming, where like-minded fans intermingle in real-time. This community-building promises to boost meaningful engagement, turning casual viewers into vocal brand champions, while also allowing providers to gain direct access to invaluable first-party data on superfans for informing content decisions.
Building superior user engagement capacities promises tremendous upside for media companies that are able to execute it successfully. Features that facilitate meaningful engagement between viewers and content can drive real business results by cultivating an enthusiastic and loyal subscriber base.
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