Content, Engagement and Simplicity

S05E07: Game of Streams (Content, Engagement and Simplicity)

Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you don’t want to miss an episode.

Great content will always sell regardless of how it is packaged. But for everything else but the big blockbusters the way that it is distributed makes a substantial difference. One good example is the Quibi library that attracted more viewing the first two weeks on Roku than it ever did on Quibi during the short history of the streaming service. The content is the same, the difference is how it is delivered.

The original Quibi service only allowed mobile viewing and no possibilities to take screenshot to allow viewers to share and meme its programming. Big screen possibilities were added later when it was too late.

You can argue that the timing for Quibi was extremely bad, and the content might not be strong enough for a stand-alone service. And it might be unfair to compare with Roku where the Roku Channel reaches 70 million people and has about 54 million accounts. But it still shows that how its packaged and distributed matters.

Apart from good content, engagement and simplicity is vital for a successful service. It does not matter how good content you have, if you cannot find it on your service or if the experience in the service is bad.

I will not mention any specific service by name, but I have endless of examples of bad user interface and content discovery. Online streaming over the public internet might not be the best suited technology for distributing video, but the web technology should be very suitable to make a great presentation, discovery, and experience.

Ease of use and simplicity

In a recent report from PwC that surveyed 1,000 US consumers ages 18 to 59 you find that only 27% of the consumers say top-notch quality content is what attracts them to streaming services. On the other hand, 55% of the consumers say ease of use is the most important factor for a streaming service. Also, 35% say knowing I will always find something to watch is a major influence.

So, it is not just the content anymore and a streaming service is not only competing with other streaming services. That means that a streaming service provider must work a lot with the customer journey and engagement. It starts with the landing page and the sign-up process, as this is the only part that all consumers will experience. If the sign-up and onboarding process is complicated, you lose a lot of potential viewers already at the start line.

As stated in earlier episodes of Game of Streams, churn will increase even for the global streaming giants. Even though churn for streaming services is not as serious and definite than churn in other subscription-based services, it is still something to address. It might sound contradictory but making it easy to leave is an effective way to ensure that your audience stay longer and come back quicker. So next after a simple initial sign-up, make sure that its equally easy to leave and return. A complicated process to cancel the subscription will only ensure that you think twice before you return.

Engagement and stickiness

Netflix is exploring a lot of areas, partly outside of their core business of video, with the goal to keep the viewers engaged within their domain. Increased focus on kids’ content is a well-known way to ensure good retention rates. Offering of merchandise is the first big move beyond TV shows and films, to monetize the brands they create and increase loyalty.

The latest news from Netflix is their planned expansion into video games and they have hired a former Electronic Arts Inc. and Facebook Inc. executive to lead the effort. Regardless of if you believe that this will be successful or not, it proves that Netflix has understood the importance of viewer engagement and stickiness. It clear that video games are one of the biggest competitors to Netflix, so why not explore this area?

To watch out for the coming months…

We are in the mist of the Q2 earning reports and so far, we can conclude that the subscriber growth has declined for Netflix and the above-mentioned gaming expansion was discussed at the earning call. Netflix stated that this would not be an independent driver of revenue, rather a way to increase engagement and keep subscribers within their platform.

WarnerMedia with HBO Max and HBO instead added 2.8M U.S. subscribers and raised its year-end 2021 guidance to 70 million-73 million global HBO Max/HBO subscribers.

And we again got evidence that we should not forget ad-funded services in the “streaming wars”. YouTube booked $7 billion in ad revenue last quarter (up 83%) to Compare to the $7.34 billion in revenue Netflix booked during the same period (up 19.4%). Not a bad move by Google back in 2006 to acquire YouTube for $1.65 billion.

Other notable information from Google at the earnings call was that YouTube Shorts, the short form videos like TikTok generating more than 15 billion global daily views, up from 6.5 billion global daily views in March.

In August we will follow more earnings reports from ViacomCBS, Disney, Amazon, Discovery, and many others.

Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.

Follow me on Twitter (@svensson00) and LinkedIn for regular updates and news.

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We are consultants sharing the passion for the technology for a media consumer of the future.

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