//Content alone is not going to win the streaming war. Here is why
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Content alone is not going to win the streaming war. Here is why

 

 

Netflix will announce Tuesday its results of the first quarter of 19th. We will know for sure if the increase of its subscription constituted a good commercial coup in the short term. Meanwhile, Disney announced that Disney + its new streaming service platform, will cost only $ 6.99 / month and that its stock has soared from more than 11% in one night.

Debate on the pricing model for streaming services as Disney eclipsed Apple, which dominated the information technology cycle for weeks after announced ] its OTT broadcast services compete with Netflix, Amazon and Hulu, called AppleTV +. With the participation of big names such as Steven Speilberg and Oprah who helped boost Apple's credibility in the increasingly crowded OTT market, Apple has made it clear that they would define, in the words of a leader, "the commitment to tell stories, on every screen of your screen". life. While it may have been tempting to be distracted by the procession of celebrities who have invaded the Steve Jobs Theater, Apple's silence on a subject has become deafening at Twittersphere as everyone began to ask the story. fundamental question that remained unanswered: How is it going to cost?

CNBC reporter Alex Sherman, who attended the unveiling in person, tweeted "We had half an hour of actors talking about their no-clip shows and zero detail on the pricing of Apple's original content or if the channel services will be bundled for discount. The overall atmosphere here is a shock and a slight annoyance among the people sitting around me. "Todd VanDerWerff Vox's great critic, said: " The new Apple streaming service is still mainly defined by what we do not know.

He is right. The company has chosen not to discuss the details of potential price or savings that users could achieve by partnering with other Apple services. What we do know is that Apple TV + will be an ad-free subscription service. This announcement has opened an interesting debate on the revenue model – funded by advertising or subscription – likely to attract a broad consumer audience.

Apple and Disney's decision to forgo advertising strongly contrast with Google's recent YouTube reports, which would instead be intended to extend ad-supported content while potentially reducing the weight of subscription-based models, as well as PlutoTV, owned by Viacom, doubling its totally free advertising-funded model. Google denies that it will completely abandon its subscription model, as have already reported but it is clear that the world's largest advertising company sees an important opportunity of ## 147 ## Providing free content free of charge in an advertising-funded environment.

As debate continues between ad-supported models and subscription-based revenue sources, the real question for marketers and content platforms is next: "What do consumers want?"

To begin, it is important to define levels by stating that OTT is now a common product and that it is not a niche audience. In partnership with the Harris Poll, OpenX conducted a national study on OTT users released this week, which revealed that the majority of US consumers now broadcast at least one OTT service, most streamers subscribing to three platforms on average. . Within this growing group of banners, the opinions on the preferred billing models are very diverse, which indicates to the platforms a great opportunity to be creative in the monetization of their contents.

The study revealed an almost equal division between those who want to pay a subscription in exchange for zero ads with a slight majority opting for some form of advertising to reduce or eliminate fees d & # 39; subscription. Forty-six percent of consumers prefer a service that costs $ 10 per month without advertising. It is worth noting that the survey also revealed that consumers would be willing to pay up to $ 24 per month for a master subscription, or nearly twice the adjusted Netflix monthly fee for its package on more popular, now at $ 13 a month (instead of $ 12 a month). a clear mobility of rising prices for an ultra-premium supplier in the subscription market. I expect the results announced Tuesday do not report a significant drop in sales due to this increase.

That said, streaming service providers, including Netflix and Apple, may miss the opportunity to launch a multi-tier pricing model. which includes subscription models funded by advertising, discounted and free.

Often, out of the 2,002 American consumers who responded to the Harris Poll poll commissioned by OpenX, 54% would choose an ad-supported model; 29% of them prefer a service costing around $ 5 a month with 2 to 3 minutes of ads per hour, while 25% prefer a free service with up to 10 minutes of credit. ads per hour. The clear message is that there is room for multiple models and a "one size fits all" approach (or unique billing models) will likely be replaced by a series of options tailored to consumer preferences. A guide to follow still comes from the national survey of OTT users, which revealed the sweetness of content and costs – what I would call the 15/100 video rule. Consumers are watching about 15 cable TV channels today and, if the price was not a problem, they would be willing to watch 15 different OTT services. Viewers spend about $ 100 a month to access the content they want to watch, whether OTT or cable / satellite.

Consumers do not want an unlimited number of choices and do not want to pay for the channels that they do not watch. The diversity of revenue models will increase in step with demand from various OTT service providers. At present, less than five percent of TV advertising revenue goes to OTT channels. As eyes continue to migrate to streaming platforms, OTT advertising funds will follow quickly – and they are expected to exceed the overall growth of all ads by five times in 2019. Investment in content alone will not determine the winners of the OTT market losers. race. Regardless of which platform benefits from the pricing formula, content portfolio and user experience, the OTT market will be a leader in the fast-growing market.

The opinions expressed in this article are those of the invited author and not necessarily those of Marketing Land. Associated authors are listed here .

About the Author

content alone is not going to win the streaming war here is why - Content alone is not going to win the streaming war. Here is why

Dallas Lawrence is currently Head of Communications and Brand at OpenX, the Largest Independent Advertising Market . Prior to joining OpenX, Dallas Lawrence was Communications Manager for Rubicon Project, Head of Global Communications and Government Affairs for Mattel, and Chief Digital Strategist for Burson-Marsteller. For more than a decade in Washington, Dallas served as a Press Attaché at Capitol Hill before joining President Bush's outreach team as part of the President's National Political Initiative. , No Child Left Behind. Dallas would later be deployed to Baghdad in Iraq, on behalf of the White House, to serve as spokesman for the Coalition. Upon his return from Baghdad, Dallas joined the communications team of Secretary Donald H. Rumsfeld, where he was the Pentagon's director of public relations for Rumsfeld and his predecessor, secretary Gates. He has been named both "crisis manager of the year" by PR News and "social media professional of the year". In 2013, PR Week named him one of the 40 most influential PR leaders. Dallas was previously an officer in the US Navy and earned a BA in Political Science from the University of California at Berkeley and an MBA from Johns Hopkins University.