What will the “winning” video streaming model look like?

Last month, YouTube TV rolled out its “streaming TV” service in five major US cities. Just before that, Comcast and Hulu announced their “streaming TV” services to join an increasingly crowded marketplace with industry heavyweights like AT&T (DirecTV Now), Dish (Sling TV) and Sony (PlayStation Vue). Despite the hype and the big brand names, success isn’t guaranteed for any of these services.

All of these new product offerings are essentially taking the traditional pay TV model that has been around for decades and making it available via the internet at a lower cost than their traditional TV counterparts. For the most part, reactions to these services have been mixed at best, which begs the question: Why aren’t these services knocking it out of the park?

StreamOn: Understanding the Streaming Video ConsumerSo far, each of these services are missing content and/or features that are deemed table stakes for any respectable cable TV service—some are missing local broadcasts for the majority of markets; others don’t provide any DVR capabilities; and many don’t even offer what is currently the #1 ranked broadcast network, CBS. Additionally, the quality of the service is far inferior to what pay TV customers are used to with their trusty coax television.

The current streaming video landscape reminds me a lot of the early days of digital music. The model of listening to songs on the radio and then purchasing the records at a record store initially evolved to internet radio stations and digital album downloads. The results left the customer yearning for more and content providers worried that they would not be compensated for their work.

Ultimately, the winning model in digital music was not one that simply replicated the old paradigm. Rather, the winner developed something new that met the needs of both the customer and the artists/publishers. With Apple Music and others, customers now have virtually endless libraries of music at their fingertips. Customers essentially rent access to treasure troves of music and are happy to pay $9.99/month for this benefit.

But, look what has happened to those companies that held tight to an outdated model. Pandora, who was the biggest name in streaming audio, now finds its stock down 75%. And Apple, Google, Amazon and others who focused on filling unmet needs are raking in the profits.

The streaming video providers need to consider this history. Successful tech and telecom companies need to build innovative solutions that meet the needs of their customers and the content providers. Such innovation will not happen until providers take a step back and fully understand customers’ unmet needs. Failure to do so will inevitably result in failed models and loss of both market share and market cap.

To learn how we help brands identify unmet video consumer needs, email me or call 404.601-9561. We are about to launch our new StreamOn™ video streaming research and would love to have you join us. Participating brands will get a competitive advantage by thoroughly understanding the needs and motivations of today’s video consumer. Learn more.


This entry was posted in Product Development, Technology, Telecommunications and tagged , , , , by Greg Mishkin. Bookmark the permalink.
Greg Mishkin

About Greg Mishkin

Greg is a vice president in the Telecommunications and Consumer Research Divisions but works across all divisions and is in high demand as a speaker and author in the market research and telecom fields. Greg's responsibilities include managing and growing key client relationships while maintaining a special focus on the integration of large-scale behavioral data with Market Strategies’ traditional market research solutions. He is known for turning extremely complex data into actionable insights and turning data into competitive advantages for his clients. Currently, he has seven patents related to data-focused market research methodologies. Greg earned a master’s degree in business administration from Kennesaw State University in Kennesaw, GA; a master’s degree in clinical psychology from University of Hartford in Hartford, CT and a bachelor’s degree in psychology from Union College in Schenectady, NY. When not on the road for work, Greg can usually be found enjoying his new-found empty nest while frequently visiting his twins in college to watch their performances in musical theatre, piano, percussion, symphony and the like.

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