What Are Streaming Services To Discuss?
According to Tiran Dagan, Cognizant’s Chief Digital Officer for the Communications and Media business, it is time for streaming service providers to apply the lessons learned from 2020 to reinvent the direct-to-consumer experience.
In 2021, providers of streaming services will come to an unusual crossroads: While the demand for direct-to-consumer (DTC) content is at an all-time high, revenues are frequently difficult to come by. The problem is that streaming service providers aren’t focusing on the appropriate projects.
Make no mistake about it: there is a lot of positive news in streaming. In the face of a global pandemic, the market expanded by 37% in 2020. New services such as NBCU Peacock and HBO Max had splashy launches, garnering considerable media coverage. According to Digital TV Research, the top five US-based streaming services — Netflix, Disney+, Amazon Prime Video, Apple TV+, and HBO Max — will have 678 million members by 2025.
Mobile devices will be able to attain speeds of up to 10 gigabits per second with the deployment of 5G.
However, there are unsaid truths lurking underneath the good news. Disney+ will account for a large portion of market growth in 2020, while Netflix’s subscriber base significantly outnumbers its competitors, surpassing 200 million in January. Disturbingly, Netflix’s recent quarterly results reveal that even the streaming behemoth isn’t immune to the sector’s difficulties and subscriber slowdown.
Revenue alone is insufficient for streaming service providers. Services must also be lucrative. Even the most successful advertising-based video on demand (AVOD) service providers are experiencing declining average revenue per user (ARPU) and low conversion rates of signups to active users.
Four Worthwhile Discussions
To make a profit, suppliers will need to overcome some of the more difficult issues with DTC streaming services. 2021 is the year to start these discussions — and get them properly. Here are four areas that all content suppliers should be thinking about:
Content And Dissemination Should Not Be A Gamble.
Traditionally, media supply chains have been structured to support outdated linear distribution patterns. Nonetheless, adaptability and range are fundamentals of today’s viewing. As a result, the change to DTC must be a planned exercise that allows for the transfer to new models while continuing to servicing existing ones. Is your company capable of scaling and growing, and can it support additional consumption, users, and loads? How effective is your multi-channel packaging and fulfillment across linear, video on demand (VoD), and over-the-top (OTT) channels?
As content investments rise, it is equally vital to enhance monetization options while keeping rights compliance in mind. With content being disseminated across various endpoints, distribution platforms, and countries, a critical concern for every media firm is whether their system can manage that complexity and efficiently utilize content while minimizing the risk of noncompliance.
Most media firms have vast archives of content that they have yet to exploit. What has to be considered are the most contentious issues, such as:
- Expired rights pose legal and compliance issues.
- During discussions, real-time updates are not accessible.
- Unutilized content value as a result of rights expiration
- Manual updating and prone to mistakes
When it comes to monetization, foreign distribution expands the size and reach. However, managing worldwide rights and distribution differs significantly from normal rights management, and streaming service providers must adjust to each territory’s royalties, rights, and commissions. Existing contracts for original material in overseas regions, for example, may already be in existence.
Just Because You Build It Doesn’t Mean That Others Will Come.
Every streaming service has an app, but the subscriber experience is the deciding element, especially as Generation Z’s “personalize everything” kids come of age. They won’t necessarily come – or keep coming back – if you create it.
The top experience-related pain problems for OTT product and customer experience teams are user journey and navigation dissonance. Most teams also have issues with bad search experience and results, as well as a lack of content options.
There are two methods to distinguish experience. One method is to create content or marketing recommendations that are tailored to the viewer’s preferences. This necessitates utilizing the whole spectrum of data and AI — spanning user preferences, consumer profiles, and the user journey — in order to provide the experiences that contribute to customer stickiness.
Some of the streaming service providers with which we work, for example, have boosted viewership through marketing campaigns that use analytics generated from characteristics such as viewing behavior, consumption habits, and use. We may also use data in conjunction with evolving AI algorithms and frameworks to hyper-personalize the subscriber experience.
Another approach to stand out is to use automation to make the experience as smooth as possible. This strategy also places a premium on data, with tailored user interfaces, carousels, and asset displays depending on individual preferences and customer path maps. We are currently working on proofs of concept for streaming service providers to automate experience validation as well as to measure search and suggestion efficacy.
Take The Proper Measurements.
Many media service companies consider the quality of service as a given rather than differentiation. Many organizations continue to rely on reactive metrics, such as how soon a service issue was fixed. Few investigate the role that an intelligent, holistic system — with a unified view of apps, user behavior, devices, and the network — may play in preventing quality concerns in the first place.
Allowing the existing quo to remain, however, is hazardous. By not changing their analytics, media companies leave themselves open to consumer complaints, which can lead to audience desertion and unfavorable social media remarks.
The difficult challenge is how to measure and take remedial action before this happens. The solution necessitates a shift away from manual, reactive procedures and toward systems that integrate sophisticated data sources, artificial intelligence/machine learning-based intelligence, and automated operations.
We can assist streaming service providers in moving beyond measurements that answer the “what” (buffering, pixelation, and delays) and into metrics that answer the “why” (application vs. device vs. infrastructure), “where” (region, geography), and “how” (next-best-action).
It’s All About The Data When It Comes To Monetization.
Providers must use audience segmentation to share the appropriate material with the right audience on the right platforms in order to enhance the efficacy of their content and promotional efforts. However, data is the fuel that powers the DTC engine, and many streaming service providers fail to consider how well they are using it to facilitate segmentation.
While data drives the most important KPIs, such as customer lifetime value, ARPU, and subscriber retention rate, media service providers often have a myopic perspective of data.
By keeping the information in functional silos like the product, marketing, and promotions, they end up with monetization gaps that a unified picture of the consumer would help to fill.
What actions must media organizations take to get a unified consumer view?
To begin, gather, clean, and arrange data from catalogs and media assets, as well as devices and platforms, in a single location. Next, to obtain a 360-degree perspective of the client, aggregate user information that is both privacy-compliant and enhanced by first- and third-party data, such as customer identity and household relationships, as well as lifestyle indicators and social media.
You may then apply this unified perspective to numerous downstream purposes, such as customer profiling and segmentation, next-best offer, and free trial-to-paid subscription conversion, using cloud-based advanced analytics and data science.
2020 was a memorable year for both streaming service providers and media consumers. Now is the moment for providers to use critical lessons learned over the last year in order to continue reinventing the user experience across devices, platforms, and content ecosystems. By doing so, they will be able to make 2021 a transformative year in which they will successfully navigate the path forward.
Written by Kusuma Nara|The Entrepreneurs Diaries is now available on Telegram. Join our telegram channel to get instant updates from TED.