Streaming cos. ‘go big or go home’ shift leaves customers confused, providers scrambling
Aug 2, 2021 | By PYMNTS.com
There are now more than 200 streaming services vying for eyeballs, attention and consumer spend. It’s one of the reasons that Vindicia Chief Operating Officer Roy Barak said streaming services have suddenly made an appearance as a credit card benefit offered by issuers. In a world where consumers will likely top out at three paid streaming services bundles, this takes on more importance — particularly for the smaller streaming services in search of an audience who use it as a customer acquisition strategy.
“Credit card companies that have offered these types of offerings have been quite successful,” Barak said. “And taking the lead beyond airline miles or cash back is a pathway into more sticky services.”
Barak said it also helps blunt the increase in annual membership fees, as American Express has recently proven with the streaming addition to its Platinum card product.
The many ways to build a bundle
The basic name of the streaming bundle game, Barak said, is to create a rich enough streaming offering to both draw in consumers and be sticky enough to hold them in place. That’s why the push is toward bundling and enriching the experience to offer more bang for the subscription buck — and there are many ways to do that.
Netflix is one example of a company building out from the base of its large content library, expanding into things like merchandising and gaming to leverage the massive digital brand it has already built to “take the next step,” said Barak.
“Netflix mimics the path Disney has taken over the years: starting with content and expanding to services, merchandise and more engaging activities,” he explained.
Other companies have tried, but not necessarily very successfully. It remains to be seen whether creating a Netflix-like ecosystem of games will pack the streaming punch they expect it will.
That differs from the play Apple and Amazon are taking, he noted, as they both are building fairly large audiences, but neither would be defined as a video streaming provider at the base. They are instead bundling together “digital lifestyle brands that tie together a host of benefits — streaming, music, delivery, fitness, commerce, higher availability discounts — that individually might not dominate a market, but bundled together create a very sticky subscription package.”
What comes next
The streaming subscription market has proven to be a very changeable space, Barak noted, but there are some things we can likely expect. Netflix is expected to hold its top spot in terms of video-streaming services, simply given its size, scale and obvious expansion ambitions.
The player to watch, he said, is Disney — Barak believes it will very likely hold its No. 2 spot behind Netflix in the race, simply because it is so thoroughly earning the teenage and younger market. He pointed out that kids are the most loyal streaming customers, delighted to watch the same programs over and over again, meaning parents are unlikely to cancel those subscriptions. However, Disney’s hole is programming for adults, he noted. Though it has started adding on with things like Hulu and ESPN, given how expansive the Disney brand is — and how deep its pockets are — bigger offerings are likely on the way.
“Disney owns teenage and below. I think it will be very interesting to see how they move on adults when they decide to do that,” said Barak.
That might mean snapping up a competitor property, like HBO, if the Discovery deal falls through, or striking up a big partnership with Apple. Either way, Disney has the firepower to really push the game.
But whatever it is, said Barak, we can expect it to be something. Because from Amazon’s acquisition of MGM to Netflix’s leap into gaming, the streaming wars are increasingly a “go big or go home” kind of game.
“It’s going to be intriguing to see what paths they take,” he said.