The pandemic has done a lot for the streaming industry, forcing people to stay home and rely on digital content as their primary means of entertainment. As restrictions lift across the world, streamers are looking for new ways to attract subscribers while maintaining and even increasing their profits. It turns out the obvious answer, according to a new report from Variety ViP+, is to give consumers the content they want at an affordable price.
The big neighborhood streamers, Disney+, Hulu, [Netfix], Peacock, Prime Video, and HBO Max all pride themselves on their extensive content libraries and use their catalogs as primary drivers for their individual services. However, all of this content comes at a steep price. Monthly subscriptions cost nearly $10 each, except for Peacock which hovers at a respectable $5 and Disney+ at $7, at least for now. HBO Max offers an ad-supported tier at a lower price for budget-conscious consumers, and Disney+ and Netflix are also moving in that direction.
Find the niche
These streamers now face a new problem as inflation pushes households to limit non-essential spending from their budget. This includes expensive service subscriptions with giant libraries that will never be seen. Having options for subscribers is great, but consumers are far more interested in the media they like to watch than the catalogs of content that will essentially be ignored.
Niche streaming is one answer that allows consumers to get the programming they want at a relatively lower price. This group of services has lower costs while focusing their content on specific forms and genres. For example, Shudder exclusively promotes horror-related content with a monthly fee of $5.99 (which is reduced to $4.75 per month with a one-year subscription). The AMC Networks brand not only offers classic and contemporary films of the genre, but also hosts a wealth of original films and documentaries.
Crunchyroll is delivering another unique product in anime form while also making its 120 million subscribers exceptionally happy when it slashed its pricing structure in nearly 100 countries earlier this summer.
In the second half of 2021, 10 of the most niche subscription video-on-demand (SVOD) services grew at a rate that nearly doubled their larger library counterparts. In an attempt to reach the widest possible audience, many of these big streamers seem to be losing touch with viewers more interested in watching very specific content.
Meanwhile, smaller streamers like BET+ have a pre-existing audience with management that understands their content best. This not only allows them to streamline their libraries, but also allows them to target their advertising in a much more targeted and economical way, thereby reducing overhead.
The other alternative for cable cutters wanting to reduce the burdens on their wallets is ad-supported free-to-air TV channels (FAST). Like traditional linear television (broadcast, cable, satellite), FAST channels broadcast content on a rolling schedule. However, since it is ad-supported, there is no charge to watch it. This makes FAST a great choice for those who are more familiar with the traditional TV setup or who don’t care about streaming and viewing content exactly when they want it.
As the world of premium subscription streaming has exploded in recent years, FAST channels have become an important counterbalance to more expensive services, with the proliferation of these free channels continuing to grow, even as the number of SVOD customers declines.
It may seem like this style of viewing is becoming obsolete, but premium Prime Video and Disney+ streamers still rely on traditional weekly schedules for their original programming. This trend suggests that FAST channels are not too far off in terms of how comfortable subscribers are with the non-excessive viewing options provided by streaming.
In fact, more viewers are turning to FAST options as the marketing model becomes more mainstream. FAST options are also great for businesses because their advertising revenue is usually more lucrative than standard subscription profits.
The path to follow
As the streaming industry continues to adjust to a post-pandemic market, services need to do more to retain their audiences. Current trends seem to favor a shift from a group of larger, catch-all subscription services to low-cost, niche broadcasters offering content specifically appealing to individual households. Coupled with FAST channels, these cheaper streaming options can ultimately deliver better content that viewers are more than happy to engage in than the “everything for everyone” model of streaming wars.