Consumer Demand For Cross-Platform Functionality Will Force Aggregation

More than 20% of U.S. consumers agree that they subscribe to too many video streaming services, and a third say they want to be able to manage and search for all of their available content from one place.

That’s according to a new study on the future of OTT aggregation, from the Interpret research firm, based on a survey of 9,000 U.S. consumers and interviews with executives in the video streaming sector.

The study’s bottom line: Current obstacles must eventually give way to aggregation offerings that meet consumers’ demands. 

U.S. viewers currently subscribe to an average of four to five subscription-based video-on-demand (SVOD) services, and most also access multiple ad-supported or ad-funded on-demand services, the survey found.

Through streaming media players, gaming consoles, set-top boxes and smart TV interfaces, most also already have multiple potential aggregators in their homes.

Consumers expect financial value from all bundles, as well as better account management, discovery and content recommendation functionality. Increasingly, they also value offerings that eliminate pain points in the subscription and cancellation processes.

But aggregation progress is being hampered by players’ fight to retain control.

Disputes between aggregators and content providers over data access/control, and the “gold rush” for rapidly expanding connected TV advertising opportunities, are the main culprits.

And aggressive negotiation stances are causing more service blackouts for big players, while smaller or niche content providers are being priced out, reducing consumer options.

Both of which are eroding consumers’ perceptions of value and trust in the streaming industry.

Innovation and market aggregation dynamics are also being held up by slow replacement cycles for devices and service owners' greater use of barriers and loyalty incentives to discourage switching services.

But churn and consumers' increasing feeling of being overwhelmed will eventually drive SVODs to partner with one another and with distributors.

“Addressing fragmentation will be tricky, since there are so many service options, each with its own priorities relative to revenues, data and audience," acknowledges Interpret Vice President Brett Sappington. "But the companies that solve the aggregation puzzle have much to gain.

"Successful aggregation of content and services will produce an improved, sticky customer experience and drive subscription and ad revenue opportunities,” he stresses. And while most aggregation providers are focused on front-end content interfaces and discovery tools, there is potential to offer significant differentiation through portfolio and payment management tools.

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