The streaming services have officially taken over the viewing game, presenting a new digital frontier to be conquered, although entrepreneurs will have to work quickly to do so. Disney+ has already reached 10 million subscribers after its launch in November 2019. The instant success of the new streaming platform and entry of a major entertainment company to the market cemented streaming services as the new norm for consuming media and marked what many experts view as the beginning of the final chapter for traditional TV. Consumers turn to streaming because it’s a convenient way to watch TV. Streaming platforms offer a wide range of options, and monthly subscriptions are more affordable than the average cable bill. At HJR Global, we are certain that streaming is here to stay and will have a big effect on entrepreneurs in the entertainment industry. Here is what you need to know about the streaming service boom, why consumers love those platforms, and what the future has in store for streaming services.
A Few Facts About Streaming
Streaming has become the most popular way to watch shows and movies since 57% of Americans have at least one household subscription, with many more sharing connections across multiple homes. It’s often presented as an alternative to cable, but 36% of users with a streaming subscription still pay for both.It’s no secret that Netflix is one of the most popular streaming services available. The service, which started as a mail rental DVD rental service, has established itself as a successful streaming platform thanks to its library of content and personalized recommendations. It was also one of the pioneers of the streaming service landscape, which is probably why more than 51% of Americans now subscribe. Netflix has also found a groundbreaking way to expand its library and deliver value to users by producing its own content. And, with 150 million global users, Netflix’s success isn’t limited to the U.S. anymore. However, the streaming services revolution is in full swing, putting some of the old guard back on their toes. Hulu is another popular platform with 28 million subscribers in the U.S. It rose in popularity by making episodes from major networks available shortly after they aired. Finally, not content to just provide you packages at an alarming rate, Amazon Prime is also a major player in the streaming market with 100 million subscribers. Amazon is taking a different approach and delivering a unique value proposition by bundling streaming with other services, like its music library, e-books and audiobooks, free shipping and exclusive access to deals.
More than shows and movies
Streaming services have changed the way we watch shows and movies, but that technology isn’t limited to viewing movies and shows, as it has quickly established a front in other forms of entertainment. Streaming has revolutionized the music industry, with 900 billion songs streamed in 2019. More than 186 million users stream music in the U.S., and Apple is the most popular music service with 95 million users. Music streaming is appealing to users because they can listen to millions of songs in every genre imaginable. There are no ad breaks with premium service or fewer ads compared to radio stations when using the free services. Users can access their music library and playlists across different devices. Music streaming platforms also help users discover new artists, and some services deliver a personalized experience through curated playlists and recommendations. Users are also streaming other forms of audio content, like podcasts. With 525,000 active shows, podcasting has grown rapidly in the last two decades. Podcasts allow listeners to consume in-depth content in a convenient audio format and connect users with niche topics that are relevant to their interests.
The Technology Behind The Streaming Boom
The technology powering streaming services wasn’t as widely accepted 10 years ago and has tremendously evolved since Netflix expanded its services from DVD rental to online streaming in 2007. Streaming services have built performing content delivery networks that give users access to media at high speed and deliver high-quality resolution. Transcoding capabilities have evolved so that networks can transmit different file formats, and improved connectivity between devices is making it possible to stream videos at an acceptable speed. Recent innovations like AI are transforming the streaming experience. Netflix uses AI to make relevant personalized recommendations, to automatically adjust video resolution to optimize speed for the user’s connection and to prevent interruptions.
New devices are contributing to the streaming boom:
- Smart speakers are making it easier than ever before to request a specific service or content.
- Smart TVs support streaming apps.
- Virtual assistants are facilitating the navigation and browsing experience by letting users search several content libraries.
- Smartphones and tablets are getting larger high-resolution screens that are ideal for video consumption.
- Bluetooth connectivity allows users to cast media from one device to another, whether it’s a TV or a car radio.
The popularity of streaming services echoes broader trends that are characteristics of what consumers prefer and expect in the digital age. The user-centric experience of streaming, access to a wide range of options, personalization and on-demand content align with the expectations of the 21st-century consumer.
The Future Of The Streaming Industry
Generation Z and Millennials are more likely to embrace streaming compared to older generations, although streaming has a high adoption rate in all age groups. Users turn to streaming because it allows them to watch the content they want and because it delivers more value compared to a traditional TV subscription. Users have also mentioned access to a broad selection of titles, curated and personalized content, and mobile video as advantages of streaming.
These trends show that streaming is here to stay. New generations of children are growing up with streaming, and TV schedules aren’t shaping their viewing habits. The streaming boom is also resulting in the production of more high-quality TV content to meet the growing demand for high-budget shows with a quality comparable to movies. Producers are creating more content than ever before and an increasing number of shows with a very targeted audience. The proliferation of available options and the increase in quality will continue to fuel the streaming boom.
Disney’s entrance into the streaming market is a significant landmark. Disney+ is quickly becoming a go-to option for families with children because of its content library. Other services will probably look for new ways to compete in the streaming wars, such as pricing, original or exclusive content and bundles with other services to add value. A survey found that users were willing to pay for three to five services, which means a multiplication of streaming options won’t necessarily result in a loss of subscribers.
On the other hand, consumers are increasingly cutting the cord and canceling their cable subscriptions. Cable companies are trying to compete with streaming platforms by offering more on-demand options and their own apps, but AT&T lost over 1.3 million customers during Q3 2019.
We will probably see more major networks launch their own streaming services in the future, and a market with a multitude of options, especially for niche streaming services. We will either see streaming platforms merge to offer bundles that deliver more value to remain competitive or see consumers recreate the digital equivalent of a cable bundle by picking a few subscriptions to create a customized content library, a practice facilitated by smart TVs and assistants that allow for seamless navigation from one app to another.
In terms of affecting business, we have only just begun to see how manufacturing, content production and other industries are affected by the streaming services boom. It will be interesting to watch the growth of new industries centered around that and HJR Global will always be there to help new entrepreneurs find their footing. Have an idea that you’re ready to develop? Contact the HJR Global team today and let’s start building your dream.