Marketing in the Crowded Landscape of Streaming Services
With humble beginnings, Netflix started in 1997 as a DVD mailing service. Little did we know, it was a game changer, growing into an entire industry that involves mass corporations like Amazon and Disney. Now, Disney, Warner Media, and NBC are all introducing their own video streaming platforms, making 2019 the year of video streaming services.
A 2019 Deloitte study reported that 69% of consumers pay for internet streaming over the 65% who pay for a cable service or satellite subscription. In the age of instant gratification, consumers want the convenience of getting what they want when they want it, and streaming services offer just that.
What can marketers learn from the rise of streaming services?
If you took a marketing class, then there’s no doubt you know the “P’s of Marketing” - Product, Price, Place, Promotion, Packaging, Positioning, and People.
The leaders of the video streaming industry are proactive planners who are adaptive to change, and, seemingly, experts at handling the P’s of marketing.
Product
A streaming service’s popularity primarily relies on the content it offers, as well as the deals with networks that enable the streaming service to host non-original content.
Many of Netflix’s most popular shows are owned by companies that will eventually want a bigger cut of the streaming market - companies that plan to compete with Netflix in the near future. This is why legacy streaming services like Netflix and Hulu are turning to original programming in order to remain relevant.
By the end of 2020, fan favorites like “The Office” will be taken off Netflix, so it can be hosted on NBC’s network-owned streaming platform, Peacock.
Although these moves threaten Netflix’s audience retention, Netflix has always been regarded for its consistent production of original series which have won multiple Emmy awards. Viewers are eager to see Netflix’s next steps in the coming year, however, as fan favorites of originals like Bojack Horseman and Orange is the New Black approach final seasons.
What this means for marketers:
In order to stay top of mind, marketers need to keep an eye on top trends and observe consumer behavior to be sure their product resonates with the target audience.
Price
Networks noticed the decline of cable viewers because cable bundles were, comparatively, too expensive (hence why there is now a plethora of live streaming options available). As Netflix grew in popularity, it was soon joined by competitors who offered alternative options at cheaper prices. Price (and convenience) is a major reason consumers switched from cable to streaming services...and now 70% of U.S. households own a subscription.
According to a study conducted by Vindicia, “the average American subscriber watches 3.4 services. For each one, they pay an average $8.53 per month” - adding up to a third of the price of cable.
Disney+ is coming into the picture in November 2019, costing $7/month. Disney+ will offer a majority of Netflix’s old collateral, including Marvel movies and animated features.
What this means for marketers:
Marketers need to constantly keep an eye on the market and competitors. Price point and perceived value can make or break a sale.
Place
All of these networks are popping up because channels knew when it was time to move (some a little slower than others). Networks want to be where the consumer is - which leads to a number of live streamings options like Acorn, DirecTV Now, Sling TV, and T-Mobile TVision Home; as well as bundles including Amazon Prime with Youtube features.
Amazon Prime is a key example of a company who jumped on an opportunity. Even if it was not a technology company’s “place,” according to BMO Capital Markets, Amazon “netted $200 million in revenue from Prime Video Channels in 2017; that’s projected to increase to approximately $1.1 billion by 2020.”
What this means for marketers:
Marketers need to ask themselves if they are meeting the customer where they are or if it is time for a change...or even a different platform.
Promotion
Deals are offered in packages and bundles - Hulu has a discount with Spotify premium, Disney+ offers a cheaper bundle paired with ESPN, and Amazon Prime has deals with Google, HBO, and Showtime. Deals like this make the consumer feel like they are getting more bang for their buck. If the consumer feels valued and taken care of, they will continue to be loyal and satisfied.
What this means for marketers:
80% of consumers are willing to make a first time purchase to a brand if they are offered a discount. In a time where there are so many options, including what to watch on TV, a discount, which can be offered on social media channels or other facets, may be the key to winning over a customer.
Packaging
The data personalization element can determine a consumer’s preference about a product, in addition to the platform’s user experience.
In a time where personalization is expected, a streaming service that has an algorithm that can make appropriate recommendations is preferred. Netflix is known for their data personalization. The analytics team observes the user’s behaviors to analyze the types of shows watched and the amount of times a user plays, pauses, and skips parts to influence suggestions and thumbnail options. This leads to a quality experience since the viewer can find shows that resonate with them better.
Related - How Marketers Use Data to Personalize Ads
Beyond that, some streaming services are more mobile friendly than others. For example, Hulu plays both vertically and horizontally on mobile devices while Netflix does not. Netflix’s navigation, however, leads to an easier user experience.
What this means for marketers:
Packaging really comes down to assessing what the consumer cares about and optimizing the user experience accordingly.
Positioning + People
With so many streaming platforms entering the market, positioning each platform is paramount. Different networks are creating different video platforms that h cater to different audiences. While Netflix may advertise its ability to reach anyone, Disney+ is positioned to be a more family-friendly / accessible platform.
Positioning goes beyond the platform, however. Some media platforms like Netflix and Hulu have further differentiated themselves by developing a unique voice through social media. Netflix’s Twitter username, for example, was “Netflix Is A Joke” for a long period of time - showcasing their brand tone and personality. Even characters from shows like Bojack Horseman have their own social media presence on Instagram - humanizing the platform while encouraging interaction with fans.
Related - Injecting Humanity into a Brand
we're not in hawkins anymore pic.twitter.com/Y4hayuPKvu
— Stranger Things (@Stranger_Things) September 30, 2019
If you want to feel extremely old just remember that this year’s incoming freshman class were born after the episode of Friends aired where Chandler proposed to Monica.
— Netflix US (@netflix) September 26, 2019
Streaming services know who the brand is and the type of people who would follow it.
Since most programs are for adults, streaming platforms like Netflix, added child-appropriate sections. Netflix is almost so vague that people often say it “has something for everyone.” This is not quite the same for every platform.
The streaming service tycoons each have their own personality that influence their content - HBO Max, home to HBO, the creators of the visually epic Game of Thrones series, may focus on shows with visual aesthetics and extravagant storytelling. Disney+, which (because of their bundle offers) is home to not only children cartoons but sports and the Marvel Cinematic Universe, caters to a wider audience.
What this means for marketers:
It’s a cycle. Marketers define their audience, position themselves accordingly, measure the effectiveness, and then use those insights to tweak and tailor their positioning and content strategy.
Whether B2B or B2C, if marketers evaluate and listen to their target audience to become B2P, they will find that people drive business.
Related - B2B and B2C, but this time, it’s Personal
Bonus P - Partnerships
Brands who are entering the streaming wars with other streaming services as partners have a competitive advantage, which, at first glance, may seem counterintuitive . In reality, consumers will soon be faced with a number of choices, and streaming platforms that make those choices easier will most likely win out.
For example, Disney+’s package plan with Hulu and ESPN does not require a customer to choose between multiple individual streaming platforms in order to get the same catalog of programming. Although the brands are technically competitors, their target markets are different enough that the services will benefit from one another. The bundle also ensures that Disney+ remains family-friendly, while releasing more adult-themed content on Hulu.
What this means for marketers:
Evaluating brands that complement your brand or competitors who are just different enough may be the secret weapon to gaining a competitive advantage in the market.
Since there are new releases in the upcoming months that will lead to more options and more decisions - what do you think the future of streaming will be? Could we possibly return to a reformed version of cable? Let us know what you think!
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