As quarantines are lifted, services that enjoyed usage and subscription bumps from housebound consumers are beginning to find out whether they have what it takes to make a lasting impact, or whether their holds on audiences will dissolve as consumers spend more time out of their homes.
This past week, at Variety TV Fest, I was on a panel with content execs from Twitch, Twitter, Snapchat and YouTube. We talked about the influx of new viewers and subscribers, helping them find content of interest, and the importance of retaining the loyalty that has been forged during the pandemic – all timely topics in an increasingly crowded OTT environment.
The Importance of Habits
Digital TV Research recently estimated that Netflix, Amazon and Disney+ will comprise 67% of global subs, outside of China, by 2025. While that still leaves a large market of addressable subscribers outside of the “Big Three”, the competition will be fierce! In 2019, even before the launches of Quibi, Globoplay and others, Parks Associates had estimated that there were already 235 SVOD services in the U.S. alone. While some have big names, bigger reach and even bigger bankrolls, the vast majority are niche services that cater to specific topics, regions or demographics.
To continue to build market share in the post-quarantine world, services in the shadows of the Big Three need to look past the fish-in-a-barrel viewing environment of the past few months and examine how they can maintain their holds on audiences in the months ahead.
As recently as February, just before COVID-19 upended viewing norms, the Nielsen Total Audience Report cited 42% of consumers as saying that they cancelled paid video subscription services because they didn’t use them enough to justify the cost. The key question therein: Is your service part of someone’s daily habit?
Creating a TV habit
Habits in television are critical. Before the OTT boom, when cable was carrying hundreds of channels, consumers watched only 17 of them. In today’s SVOD / AVOD marketplace, that number of services consumers “watch” has concentrated among a few key players. So how do you break in and become part of someone’s habit? Here are some critical questions these services and the industry must ask themselves now as they look to navigate the months ahead:
- Who is my current consumer? Has the composition of my consumer base changed as a function of COVID-19 viewing demands and profligate free trial offers? What are the opportunities to turn some of these potentially new “light and occasional” viewers into habit-forged subscribers?
- Are there opportunities to enhance my value proposition through partnerships? Are there aggregation plays, like Hulu, Salto (France), Joyn (Germany) that would allow me expand the content offering for key cohorts, to secure greater premium storefront shelf space, and to drive more time spent and daily engagement?
- Is my platform up to the job? Four of the Nielsen’s Total Audience Report’s top six most important attributes for consumers of video streaming are focused on platform performance: ease of use, streaming and playback quality, menu selection and content loading speed, and search and accessibility of desired content. Based on those attributes, does my platform encourage or discourage habit formation?
The last few months have provided an unprecedented opportunity for services to expand their reach and subscriber base. In the next few quarters we will begin to know whether they won consumers’ habits as well.