There is room for several winners

S06E03: Game of Streams (There is room for several winners)

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 do not want to miss an episode.

The battle for the aggregation role of television continues. But as Jeff Bezos said, “Great industries are never made from single companies. There is room in space for a lot of winners.”. The question will be how many, and how to create the best aggregation. The winners will be the companies that manage to create the best offer to the consumers, which might differ regionally and from market to market.

With the increased churn the interest to be part of a bundle will also increase. There will be a place for aggregation and bundling if it’s made attractive to the consumers. But if the bundles just become a larger collection of services with less flexibility for the consumers the value will be limited.

In a lot of ways, the global streaming services both want to have the cake and eat it at the same time. They all want to be part of aggregation services and bundles, but they want it to be on their terms and conditions. They want their app to be part of all popular devices and television sets. And they usually don’t mind having a commercial agreement to be distributed as part of a package. But they still want to control how their content is being watched, and they absolutely want to own the valuable data.

The operating systems, specifically Google and Apple, will play an important role as they might have the best possibilities to create an attractive offer. They already have most of the popular apps and they have a billing relation with the viewer. If it wasn’t for the high fees connected to Google and Apple Pay, this would make a very easy onboarding process for new subscribers. With a simple acknowledgement you could register to a new service without the need to enter any credit card or other information.

Change is coming

We might be on the way to see a change in this area. Both Google and Apple have opened to reduce the fees for their payment services. And interesting enough, Apple has removed the option to rent or purchase movies through its Apple TV app on Android TV and Google TV devices. A taste of their own medicine? Will this be the real trigger towards lower and more reasonable fees?

More interesting around in app purchases is the news that Google will test letting Android developers use their own billing systems, starting with Spotify. Users who’ve downloaded Spotify from the Google Play Store will be presented with a choice to pay with either Spotify’s payment system or with Google Play Billing.

Depending on how this is implemented, it could be a way for other companies to offer the same simplicity when it comes to customer onboarding. This might open up the possibilities to the traditional pay TV distributors to make their offer more attractive.

The ideal bundle

In my view, an attractive bundle is less about content aggregation and more about flexibility. If a bundle could make it easy to subscribe, and unsubscribe, and collect all subscriptions in one place it would make administration a lot easier. And I believe that this will reduce churn, or at least increase lifetime value, for each individual service. Lock-in and long-term commitments is usually not the best way to create a good market offer.

As long as each service wants to control the viewing experience, which is understandable, content aggregation and common search will be harder. With deep linking into apps, it will be difficult to create a good user experience. Google and Apple already do content aggregation as part of the operating system, and it will be very hard to create something better in a separate service. The best way might just be to use the underlying operating system. Standing on the shoulders of the giants, as I wrote in an earlier episode.

In my view, the best content discovery might just be the linear experience with a curated stream of content. If you discover something you like, you could subscribe to the specific service to get more. So, the ideal bundle would then be a broadband connection, a device running Google/Android or Apple TV OS, a collection of the popular streaming services with an attractive commercial offering with easy onboarding and a set of FAST channels.

Enable a good TV experience, don’t build and reinvent everything.

To watch out for the coming months…

Mark your calendars, Streaming Tech Sweden 2022 will take place this year on June 2nd. The conference has over the years established itself as one of the leading technical conferences in Europe for video streaming technology. The focus is technical, and the aim is to be educational in all presentations and without product presentations. STSWE usually gathers around 200 attendees and has attendance from all job titles from engineers, technical managers, and CTO’s.

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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