Frenzy of Streaming Services Shows No Sign of Slowing
On my recent trip to the US I couldn’t help but notice the overwhelming array of online services for consumers to choose from. The market is seeing a frenzy of activity as most providers are making moves to add live TV services to their on-demand offerings. It’s unsurprising that many households have cut the cord with their cable providers.
For example, rather than continuing to pay a fee for renting Comcast’s TV set-top box and paying a monthly subscription, my colleague Geoff Blaber has chosen to disconnect and pay for a TV service with another provider. He pays for a mid-tier package with PlayStation Vue and receives the service through an Amazon Fire TV set-top box. I was particularly impressed by its intuitive user interface and the fact that the service is based in the cloud. No data is stored on a device, but rather retrieved from a network. However, streaming means that customers need a robust Internet connection.
One of the main obstacles to adoption of the PlayStation Vue service was a lack of live news and sports content, but that’s no longer the case with the rise of “skinny” bundles — akin to the way Sky offers content through its online video service Now TV.
AT&T generously gave me the opportunity to try its new online video service, DirecTV Now. It offers four packages, priced between $35 and $70 a month, with a mix of live TV and on-demand video and some local stations. I will give further details about this DirecTV Now in a separate blog.
I also tried Verizon’s free go90 service. This mobile-centric service is mainly focussed on millennials, irrespective of which carrier they subscribe to. It features a growing variety of content, especially premium sports, and it was surprising to see that it offers football from the Italian and Spanish top-flight leagues. It was easier to use than DirecTV Now, although it’s difficult to compare the two offerings as they are targeting different users.
It’s clear that Verizon is seeking to create and offer mobile-first content, in stark contrast to the slew of existing online video services, including Netflix. Verizon’s ambition is seemingly to bring to go90 the popularity of YouTube and the premium nature of HBO, for example, with content specifically for mobile devices and delivered on a mobile network.
US providers are entering a crowded market and it will be hard to knock Netflix off its perch. The service boasts more than 50 million subscribers, far more than traditional TV providers. We cannot rule out the likes of Google, but its previous failed attempts to persuade people to pay for video content underline the challenges that lie ahead. YouTube TV, an online streaming TV service, has recently been introduced in selected markets for $35 per month, allowing users to access more than 40 network and premium channels. Google needs to exploit its vast array of content by creating new revenue streams to avoid relying solely on advertising.
These live TV services are still in their youth, with all providers struggling to differentiate in a congested market. But a huge number of households in the US have cut back on their TV spending with their cable providers, suggesting latent consumer demand for streaming services.
I’m certain that more providers will enter the video content space and that other companies will offer services including live TV and features such as the ability to download material. This means that more households will continue to either reduce their TV packages with their providers or cut their spending on premium TV bundles in favour of online TV services.
I’ve long believed that it’s all about content, and this was one of the biggest themes from my trip; AT&T’s latest marketing push is evidence of that. More disruption lies ahead for the US media and entertainment industries.
For detailed analysis of the US broadcasting market and recent developments please see NAB 2017 Hints at Major Disruption in US Broadcasting Industries.
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