As traditional linear TV viewing shifts to an on-demand and over-the-top delivery system, companies that sell bundles of premium video content are trying to adjust accordingly.
According to a new report by Hub Entertainment Research, media companies, technology companies, and distributors should be seeking simplicity as they compete for consumer attention.
“Throughout our research, we have found it's not so much the cost of pay TV that aggravates people, but the amount they pay for stuff they don’t watch,” Hub founder Jon Giegengack tells Digital News Daily. “They told us they would rather pay more per network for a smaller bundle that is only things they use, and none of the things they don’t use. They would pay a premium for a simpler solution.”
That's a reaction to paid video universe getting more crowded, with new streaming products from satellite companies like DirecTV and tech companies like YouTube competing against startups like FuboTV.
Hub’s research asked respondents to choose their dream list of channels (including streaming services), with no pricing mentioned. Respondents selected, on average, around 17.5 channels, with Netflix and the broadcast networks leading the field. When asked to repeat the process with pricing figures attached, the number of channels selected dropped to eight, with Netflix being the clear top pick.
“It shows that people want to create their own solutions, but if one of the selling points of the TV bundle is the massive number of networks you get, that isn’t something that people necessarily find value in. In fact, a lot of people found it overwhelming, and would be willing to pay more per channel to have just the ones they want,” Giegengack says.
While right now it is focused on premium services like HBO and Showtime, as well as niche streaming services, a model like the Amazon Channels product, where subscribers pay a monthly fee for specific channels they choose, sounded appealing to nearly 60% of consumers.
Another takeaway: consumers are not satisfied with the way ads are presented in the traditional video bundle. A significant plurality of respondents, 38%, said the inability to skip ads was the thing they liked least about the current bundles on the market.
Many streaming services, such as those offered by Netflix and Amazon, are ad-free, while others allow for more targeted or interactive ads, both a stark departure from the traditional video ad delivery system, which is not targeted or interactive.