The Streaming Media Industry is Flourishing with New Business Models and Content Packaging Deals

Blog | Streaming Media Industry Growth | Verizon Media

By Dan Rayburn

We're committed to providing you with insights from across the streaming industry. Our guest for this blog is Dan Rayburn, Principal Analyst, Frost and Sullivan; Conference Chairman, NAB Show Streaming Summit. Dan is considered to be one of the foremost authorities on streaming media technology and is often referred to as the "voice of the industry."

With the impact of the pandemic being felt in every industry, there has been a lot of discussion about how staying at home is helping to drive record traffic when it comes to the consumption of online video. But truth be told, the streaming media industry was already seeing great growth in the number of subscribers to OTT services and the consumption of video content across all devices, before people were stuck in their houses.

Overall, we did see a surge in video traffic in Q2 at the height of the pandemic, but the credit for this really doesn't go to the fact that more people were at home. The credit goes to the fact that 2020 marks the 25th year of the streaming media industry and today's consumer streaming services are affordable and scalable, with plenty of content choices available in the market. All the pandemic proved was that these services work as they are supposed to, giving us all a lot of flexibility and options when it comes to what we want to watch and how we want to watch it.

The market for SVOD, AVOD and live linear streaming services is crowded with plenty of competition, but the market is still ripe with emerging opportunities for new monetization models and content packaging bundles. The future of this industry lies in companies trying to figure out the best mix of content and business models, which is evident from all the different types of monetization strategies we've seen over the past few months.

Quibi launched to the market with a service based on targeting only one device, with the mobile phone. They also focused their service based on the length of content, short-form, and a catalog of shows that's all originals. Advertising and subscription models both co-exist within their service. When Disney+ launched, they targeted their service for playback on every platform and device possible, with mostly long-form content and very little original content. The only business model being subscription, without advertising a part of their strategy. Peacock, which is the most recent streaming service to launch, took another approach with their monetization strategy offering a completely free tier with ads, and two levels of subscription tiers, one with and without ads. Content wise, they also offer live sports and news which is something the other SVOD services don't currently offer.

And it's not just new monetization strategies that are driving the industry. In the last few weeks we've seen new bundling deals with Apple TV+ subscribers in the US now capable of getting a bundle of CBS All Access, with no commercials, and SHOWTIME for only $10 per month. And Apple has made the package even more valuable by allowing up to six family members to share the subscriptions so they can all stream video at the same time. We've also seen a mix of video bundling deals amongst carriers with T-Mobile teaming up with Quibi and Verizon Wireless recently expanding on their bundling deal with packages that offer free subscriptions to Disney+, Hulu and ESPN+.

If there is one thing for the streaming and content industry that the pandemic has been responsible for, it's that some content owners and distributors are in fact trying out new business models, due to the unique nature of movie theatres being closed. A year ago, no one would have guessed that Disney would make the decision to allow subscribers of Disney+ to be able to see the new Mulan movie for $29.99. While the company has made it very clear that they are looking at Mulan as a "one-off" as opposed to a "new business windowing model", the fact remains that it is a new monetization model not previously offered by Disney. These are just a few examples we've seen in the industry and while most of them are all for US and Canada consumers, don't be surprised if we see some of these new deals roll out internationally as well.

At Verizon Media, we know blogs like this are excellent resources for keeping up with what's happening in streaming. Deepen your understanding by attending our upcoming live webinar: OTT trends & solutions. We'll cover three OTT trends that are reshaping the industry. Register now.

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