Are streaming services a real disruptive force?
Streaming has been presented as a disruptive innovation for traditional TV ever since Netflix launched its online streaming service in 2007. Some aspects such as making content available on several devices have been disruptive and have forced cable TV providers to adapt to new expectations, but is the experience delivered to viewers a real innovation?
Streaming services aren’t really delivering a brand new way to consume media. This technology is slowly recreating cable TV with its subscription-based model and recent switch toward branded content.
What makes streaming appealing?
Netflix currently has more subscribers than cable providers. People are willing to cut the cord because an OTT solution available at a cost that is greatly inferior to a cable subscription is attractive.
Streaming services have delivered on some of their promises by offering an OTT solution that makes content available on a wide range of devices. Viewers enjoy being able to binge-watch an entire show instead of being subjected to a TV channel schedule. The ad-free experience is another reason to cut the cord.
Switch toward branded content
The original value proposition of streaming services was to offer content from multiple sources under one roof. This approach would have efficiently disrupted traditional TV.
However, the reality of the streaming industry is different. Consumers are faced with an industry that is slowly but surely adopting an approach based on brand or channel-specific content.
This is a trend that started with channels such as HBO or CBS launching their own streaming service rather than letting providers like Netflix purchase streaming rights for their content. Brand-specific content will become one of the defining traits of the streaming industry once Disney launches its own streaming service and becomes the only provider for popular family entertainment media such as Pixar, Star Wars, or Marvel movies along with Fox titles.
The repeal of net neutrality could even further consolidate this model by allowing internet providers to prioritize access to one streaming service over other options and recreate the bundling model that has traditionally linked internet and cable subscriptions.
What to watch?
Streaming was a new and exciting technology for a lot of consumers because viewers felt like they could access anything they wanted to watch. The reality is very different and consumers need to subscribe to more than one service to watch the different programs they are interested in.
Streaming service providers have also been focusing on producing their own shows and movies rather than purchasing streaming rights for other media. Some of these shows and movies have found their audience, but Netflix or Amazon are far from becoming successful content producers.
Original content created by streaming providers doesn’t address the needs of the users who want to keep up with popular shows, watch classic movies, or find older shows for the sake of nostalgia.
This could explain why the average cable subscribe spends 9 minutes on choosing a program while a Netflix user will spend almost 18 minutes browsing before deciding what to watch.
The streaming industry truly had the potential to disrupt cable and traditional TV, but the current subscription-based model and the switch toward exclusive branded content isn’t what consumers were hoping for. Streaming succeeded in transposing the model of cable TV into the digital landscape but failed to bring media from different brands or networks under one virtual roof to create the entertainment service consumers were hoping for.