Streamers at NAB NYC See Consolidation Coming
NEW YORK, NY -- The streaming industry is headed for consolidation, but executives disagree over whether it should embrace cable-style bundling, according to panelists at the NAB Show New York’s Streaming Summit Tuesday. “Cable was a great product, people just didn’t want to pay for it anymore,” said Greg Barnhard, Vizio director-content acquisitions and strategy. After a streaming service has spent “an insane” amount of time and effort to create premium content, it shouldn’t “devalue” that content by sticking it in a bundle, said Archana Anand, chief business officer for South Asian content streaming service Zee5 Global.
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Many “ailments” facing the streaming industry, such as high cost and high customer churn, exist because streaming has “pampered the consumer way too much,” said Anand. In other industries, consumers are willing to pay higher costs for premium products, but streaming a prestige show such as Game of Thrones or Yellowstone is available to viewers for essentially the same price as much lower quality content, she said. In the industry’s infancy, streaming companies were in an arms race to offer content at low prices, but that race has no finish line because consumers can always churn away to a different service, Anand said.
Bundling content with other services is the solution to that, said Barnhard. Bundles attract consumers, and all but the largest streamers need the discoverability bundling provides to compete with companies such as Netflix, he said. “The No. 1 thing is discoverability,” Barnhard said. Consumers' appetite for more content is “insatiable” and once they have watched the content they desire on one service, they unsubscribe in favor of another, said Anand. Streaming companies must “start respecting content,” she said.
The fragmentation of the streaming industry “creates a real barrier to rebundling,” said Barry Tishgart, a consultant and former Comcast and Disney executive. That fragmentation is likely to decrease with time, said Michael Rosellini, Hearst senior vice president-digital services: “ I think the herd is going to thin in the coming years in terms of the number of apps.” “There is going to be consolidation,” said Barnhard. The cable business model was able to sustain just two primary cooking channels, he said. “We don’t need 15 of them,” he said. There are thousands of streaming channels, but 70% of streaming viewing is spent on just five platforms, including Disney Plus and Hulu, said Jamie Power, Disney senior vice president-addressable sales.
The ability to do geotargeting for ads will likely be an important differentiator for streaming platforms and services going forward, panelists said. Geotargeting is needed to make local TV streaming channels viable, Rosellini said. Without it, viewers often have to select their local stations from among large numbers of local apps, he said. The ability to geotarget will be a huge factor for 2024 election advertising, said Adam Wiener, former CBS executive and founder of Continuous Media. Even the largest platforms “still need to have the correct eyeballs” for political advertisers to reach, he said.