What does the data tell us about OTT consumer preferences and trends, and how can platform providers interpret it to improve reach and reduce churn? Evan Shapiro, CEO, ESHAP, discusses these questions with Jon Giegengack, Principal and Founder, Hub Entertainment Research, and Paul Erickson, Founder and Principal, Erickson Strategy & Insights, in this clip from their panel at Streaming Media Connect 2023.
Shapiro notes that Giegengack and Hub Entertainment Research regularly conduct consumer research about entertainment preferences. He asks, “From looking back over the last two years of your surveys, what do you think the consumer is saying to us right now?”
Giegengack says that while people are using more entertainment sources of all kinds, video has dominated. “It peaked last year at a little more than seven sources per person,” he says. “It went down a little bit for the first time this year to a little more than six, but that’s still the second-highest number we’ve ever seen. So, people are availing themselves of all of these different options. They’re kind of creating their own bundles, their own stacks of video services, some of them that do similar things.”
However, Giegengack says that while people are excited about the sheer amount of options available to them, the vast array of choices has become an issue. “The amount of stuff they’re trying to use in the same 24-hour day creates this environment where they have two problems,” he says. “One is complexity. So just the task of trying to use all of these platforms that don’t necessarily exist within one bundle yet.” The other issue, he says, is rooted in value. “People are a lot more willing to spend on TV than they are some other things. But as these stacks get bigger, they are less willing to take a flyer and try out a new paid platform just for the heck of it to see what it’s like. And they’re thinking a lot harder about, ‘Am I getting enough value out of this or enough utility for what I’m paying?’ That’s different than how much something costs. There are things that cost more than other things that people still think [are] more valuable because they have better utility. But I think they’re looking with a lot keener eye at, ‘Am I getting enough use out of this platform [for it] to be worth it?’ And then if they’re not, they’re more likely to drop it and take that money and transfer it to something different.”
Shapiro discusses a recent study he’d seen that breaks down the numbers of media usage by both age demographics and value. “Under 35 consumers have something like 16 services free and paid that they use on a regular basis,” he says. “Over 35 have 11. But in both cases, out of all the ‘must-have’ media that they have, only half of that 16 is considered must-have, which means the other half is at risk on an ongoing basis.”
Shapiro asks Erickson, “When you look out across the data you’ve seen with the clients that you have, what have you seen that effectively moves [a user] from ‘nice to have’ to ‘must have?’ Are you seeing different platforms, programmers, or publishers utilize content or packaging differently to move their services from the ‘kind of nice to have, but disposable’ to that ‘must have’ column?
“That’s a magic question for a lot of services,” Erickson says. “You have what they can do within their own content portfolio, which is to get better at personalization, making sure that they’re super serving [the viewer]…it’s an ongoing issue with OTT in that it’s a bit unfair to compare it to traditional pay TV because that dynamic of locking people in it will never be the same as it is with traditional pay TV…”
Shapiro says, “A large bundle, and then within that bundle to the triple play itself too.”
“It’s always going to be easier to leave an OTT service, that just goes with it,” Erickson says. “So I think that going forward, we see certain services that are very niche doing well. So we know that people are very interested in certain niches, and they’re often willing to leave a service if that show they like is not there. So you get strength in collaboration…I mean, you’ve done the most you can do personalization-wise, you have figured out how to really engage your particular viewership. Then the next extension beyond that sometimes is to find out, ‘Okay, so what can we do from a packaging perspective? What can we do from other companies within our own corporate portfolio to where the collective is the most effective?’ So I think we’re going to see a lot of evolution towards exploring these bundles and collaborations as a way of extending the power of what you can do within your own content portfolio.”
Learn more about a wide range of streaming industry topics at the next Streaming Media Connect in November 2023.
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