Advertising and Its Up-Stream Battle
While it’s not a new hobby by any means, streaming is undeniably one of the most ubiquitous forms of media consumption today. The market has been expanding for years, and since the initial outbreak of COVID-19 in 2020 demand for streaming services has skyrocketed. The global streaming market is expected to grow by nearly $150 billion at a CAGR of over 18% through 2024. The streaming landscape itself has continued to evolve and provide viewers with more options than ever before. It can be overwhelming from both a consumer and marketer standpoint. Our goal today is to make sense of it all.
What’s Happening with Streaming
Right now, the name of the game is media consolidation. It’s a battle among established media giants—many of which have joined forces with others—for subscriptions and overall viewership.
Most recently, we saw AT&T’s merger of its WarnerMedia with Discovery, as well as Amazon’s $8.45 billion acquisition of MGM studios. And this is following many other mergers and acquisitions over the last several years, such as Disney’s $71 billion purchase of 21st Century Fox’s major entertainment assets and the subsequent launch of Disney+. All of these deals are putting pressure on the remaining major media companies, such as NBC Universal and Viacom CBS, to ramp up their streaming content efforts.
It’s a lot to take in, so we thought it would be helpful to create a streaming media guide to get familiar with the ins and outs of this space.
Live Capable, Subscription and Ad-Supported
Hulu
YouTube
Sling
AT&T Now
Fubo
Philo
ESPN+
Direct TV
Connected Devices
Roku Device & Roku TVs
Apple TV
XBox / Playstation
Smart TV (Samsung)
Amazon Fire Stick
Sling
Subscription-Based
Peacock TV
Amazon Prime Video
Netflix
Disney+
Discovery+
HBO Max
There have been many developments in this space, but perhaps none larger than the morphing of movie studios into streaming providers. For example, in April, Netflix won exclusive US streaming rights to Sony Pictures Entertainment movies (starting with movies released in 2022). The future of the movie industry is in streaming, and film studios that don’t have streaming services are now looking for opportunities to extend their content. This will continue the trend of consumers watching movies from the comfort of their own home, and down the road, it may present opportunities for brand integration into highly resonant content that is important to viewers.
Why This is Important
It’s impacting our industry in numerous ways. From a consumer behavior standpoint, more time than ever is being spent with streaming content, but it varies depending on the audience. It’s critical to understand how and where these audiences are using streaming media so that you can reach them at the right time, in the right context and with the appropriate message or idea.
Even though it comes in different forms—streaming, live TV, YouTube clips, and so on—we’re essentially talking about video. It’s sight, sound and motion. That’s what people are drawn to and have been for nearly a century. But it’s now being consumed in different formats and in ways that would have been unimaginable back then. These viewing and consumption behaviors are important to be aware of because we need to think about how we should modify or tailor our media plans (e.g., shifting media dollars to the places that are going to be most effective). This may mean revisiting your broadcast and cable TV plans and potentially reallocating those dollars to streaming, to not only reach a larger percentage of your audience, but to make the experience more impactful and rewarding since the interactivity of streaming can lead people directly to a destination. TV is continuing to lose share to streaming, and TV networks will need to adapt; without a streaming division of some sort, they’ll get left behind.
The Looming Challenge
With all the mergers and acquisitions and the unparalleled growth that is happening, we’re talking about a LOT of eyeballs . . . all without much advertising opportunity (yet). Many of the largest streaming providers are not ad-supported and probably won’t be for a long time. Netflix continues its subscription model. Disney+ is focused on growing globally and increasing its user base. One bright spot is that there has been a rise in those few ad-supported platforms, as consumers who want to save money are accepting advertising as the trade-off, much like in traditional TV value exchange.
Streaming also leads to further fragmentation of audiences who are using different platforms to access their video content. Most consumers are using more than one, so how can you be sure that you’re reaching them on the right platforms and getting the results you want?
This speaks to perhaps the most difficult hurdle in the industry to overcome: tracking. The methods of measurement in the streaming media space are not sophisticated yet, and while it’s logical to measure pre-campaign and post-campaign traffic, or implement a test vs. control market program to determine your lift in results when your streaming spots aired, there is still work to do to get us to more direct measurement techniques.
So, What Should We Do About It?
Streaming is here, and we need to embrace it—not push it away. But we also need to use it wisely. Test as much as possible where you can, especially with those platforms that are ad-supported, such as Hulu and WarnerMedia/Discovery. Keep an eye on the platforms that are expanding rapidly, such as Disney+, which is on pace to surpass Hulu’s audience by the end of this year. It’s not ad-supported yet, but if and when that happens, there’s going to be a massive audience opportunity.
It’s also critical to continue to monitor developments in the streaming space and how outside factors will influence those developments. With the rollout and continued expansion of 5G, we can expect vastly improved connection speeds to foster the growth of streaming as consumers adapt to a much better downloading and viewing experience.
Finally, we are keeping an eye out for the next logical mergers and acquisitions in the industry. Pay attention to the media companies who haven’t made big moves recently (like NBCUniversal) and the ones that have merged/acquired on a path to continued growth (like Disney and WarnerMedia/Discovery). CNBC recently released predictions of the next media mergers that make the most sense, and we think there is logic to all of these. It’s worth staying in tune with these companies and their continued evolutions.
Get in touch with Mike Pocci to learn more.
DATA SOURCES:
TECHNAVIO ONLINE STREAMING SERVICES MARKET BY TYPE AND GEOGRAPHY – FORECAST AND ANALYSIS 2020-2024
CNBC – HERE ARE THE NEXT MEDIA MERGERS THAT MAKE THE MOST SENSE – HTTPS://WWW.CNBC.COM/2021/05/29/MEDIA-MERGERS-WHOS-NEXT-.HTML