A lot of people use Streaming Video on Demand services (SVOD) like Netflix, who just breached 117 million users worldwide. That goes without saying really. But, what I find interesting is that of all SVOD users, less than 20% of users have 3 or more services.
This is what I uncovered as part of my research for an article I wrote for Peer5. This statistic may not sound too surprising. It stand to reason that less than 20% of users want to subscribe to so many streaming services.
But, this statistic reflects an unsustainable problem in the video streaming industry: if you are not in the top 5, then you are fighting for attention in an extremely crowded market.
Did somebody say “New Users”?
The top three are Netflix, Amazon and Hulu. That means new streaming platforms and niche services are fighting with the likes of HBO NOW and CBS All Access for a profitable share of less than 20% of users.
This of course, is not stopping a new streaming services coming out every quarter. For this article I counted at least 30 video services available in the US alone. The question I am interested in then is:
What will give services the edge they need to survive in this competitive and crowded space?
Well you can read my article for my full analysis, by the short version is that it’s all about content and branding.
Either you need to follow Netflix’s model of creating your own exclusive content, or you need to have exclusive rights to content. An easy way to do that is to focus on a niche audience, where the competition is less fierce, and the fanbase more loyal to your product.
Another facet is branding. Right now, Filmstruck has the Criterion collection of classic movies, including Charlie Chaplin, Akira Kurosawa and Alfred Hitchcock’s movies. Previously, Hulu has exclusive rights to Criterion collection. So if Hulu got the Criterion collection back, would Filmstruck users feel loyal enough to stick around?
This is trouble with exclusive content that is not also your own intellectual property, it can be taken away. This is where stronger branding and community building could hang on to users or feel a connection to a product, beyond its current menu of shows and movies.
Disney has announced it will be pulling all its content from Netflix and other streaming services, to build its own platform. Disney certainly has brand loyalty, but will that be enough to draw users who will be asked to subscribe to yet another service.
Interestingly, after I published this article, I heard news about another competitor I’d not thought about: the cinema.
MoviePass now offers a subscription service for films at participating cinemas at $9.95 a month, with a limit on one movie per day. After dramatically reducing its price from an earlier rate of $50 a month, it is now seeing a huge up-turn in users.
Perhaps the video streaming industry now needs to consider MoviePass as another competitor. Because there is a limit to how many services users will subscribe to, and with no end to this mass proliferation in sight, we should start to see the limits of what consumers will tolerate soon.