For several years, I gave most of the presentations at the AT&T AdWorks Lab and of course, the entire discussion of un-bundling and cord-cutting was always part of the discussion. At the time, I used to say that I thought that cord-cutting was potentially more of a point in life thing and less of a generational issue. When you're single and loving alone or with roommates, you don't want to be the one stuck wit that monthly bill, so it makes sense. As you get older and have a family, you start to realize how much all of the channels cost to deliver all of the content you really want. Just take a look at this piece from last month about the costs for various streaming services.
I asked my wonderful daughter Sydney what she thought about all of this, and here's how she replied:
"What do you think about all the new subscription services?" That’s what my dad asked during our 2.5 hour car ride to CT. I answered sarcastically, “It means bad news for Netflix!" But more than that, it means bad news for consumers. Having everyone take back their piece of the pie means it will be harder for consumers to find and watch what they want, when they want.
People flocked to sites like Netflix because it made their lives easier. They are able to access a multitude of shows and movies from several genres. Everything is made readily available and the setup is easy to navigate. You can watch Thor: Ragnarok one moment, a Nat Geo special the next, and then move onto binging a new show all in one place.
Consumers don’t like sifting through multiple layers to find what they’re looking for. While new streaming services such as DC Universe and Disney+ may seem like a good idea to wealthy business men looking to get wealthier, I don’t think consumers will be as excited about this trend. For them, it just means their favorite shows and movies are being removed from the sites they already pay for. They will have to pay for multiple streaming services in order to get the assortment of movies and shows they want. I can easily see this causing strife between consumers and streaming services. Personally, I am very upset that the new season of Young Justice is only available on DC Universe when I watched the first two seasons on Netflix.
As a member of Gen Z, I can assure you we find ways to watch what we want, even if it’s not through conventional channels. Whether on Youtube or another less than legal website, Gen Z would rather find their own way to get the content they desire then pay for something they don’t want. However, there is a point where the desire for good content overpowers pride. In order to appeal to consumers, these new services need to keep their prices down and their options open. Users are more likely to switch if they believe the transition will be easy and painless. It is clear the decision to make individual streaming services was based on a desire to make more money, so streaming services will need to work hard to prove that they care about the customer’s experience too.
Good luck to Netflix when you go toe to toe with Disney +, to new companies trying to find a niche, and to consumers who will have to navigate the sea of streaming services. Honestly good luck to everyone involved in this shift, you’ll need it!
I share her frustration. Sadly, this had been going on for some time now. I wrote this back in 2015. During our SXSW presentation, William, one of our speakers, made an excellent point about content and Gen Z:
If the experience of free is better than the experience of paid, then they won't be paying!
While content providers and cable companies do everything they can to generate additional revenue, they continue to make it more difficult for consumers. It's not enough any more to have a full cable subscription, now you also have to subscribe to individual channels to get certain content. Want to see any of the new Star Trek shows? CBS All Access. Impulse? Youtube Premium. Handmaidens Tale? Hulu. Well, you get the idea. Suddenly, I'm spending $100/month for these services and I don't have premium cable channels yet.
I've now started seeing people asking who will start bundling all of these channels back together again. For example, in this piece in FierceVideo, Barclays analyst Kannan Venkateshwar wrote:
In our opinion, however, ISPs that can create product bundles will be a lot more effective than those creating price bundles but the only company which has invested in this among ISPs is Comcast.
So, we're back to looking at who will bundle all of the streaming sites back together again. In a piece in Vox from March, wrote:
The streaming revolution, which promised to break down lots of barriers in the TV industry, is beginning to morph into something else. And what it’s morphing into looks a lot more like ... traditional television.
With Apple having music & TV bundles, BGR reports that they're now thinking about creating a super-bundle. From that report:
Apple has priced Apple TV+ aggressively on a standalone basis. It only costs about $5 a month, which is a testament both to the newness of the service and to the fact that there won’t be a lot of content available at the beginning — just a handful of shows, compared to the hundreds and hundreds of TV series and movies available on something like Netflix.
What Apple seems to be working on with this new proposed bundle offers some interesting possibilities, such as an opportunity to include the company’s subscription news service Apple News+. Depending on where Apple prices such a mega-bundle, it might be less of an ask to encourage consumers to sign up for it than to try and convince those same consumers that they need another standalone news app or something like Apple TV+.
The real question for everyone involved - consumers, content providers, networks, etc. - is how many of these will the consumers want and pay for. How will we discover shows if I have to pay for a channel to see a single show. Will consumers pay for one month of a service and binge everything (like I've been thinking about with CBS All Access).
TV would've failed at the very start if I needed to pay differently for each channel. I don't think we'll see these established channels failing, but there's no doubt that in a few years, we'll be back to paying someone to bundle everything again and complaining about how much it all costs.
Read the original post here.