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The Evolution of Streaming Meets Technology

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Dan Goman, CEO and founder of Ateliere Technologies picks apart the current streaming subscriber churn and offers an elegant cloud-based solution to the problem.

For most people that grew up during the golden age of cable TV, the advent of streaming services was a dream. No ads, no expensive cable bundles, the ability to binge entire shows at once – content on demand. What’s not to love? Plus, the relatively low subscription fee – sign me up. That was the zeitgeist of the last 10 years and no one was able to capture it better than Netflix. 

For the first time in history, streaming services hit 1 billion subscriptions worldwide during the height of COVID-19 in 2020, which was a 26% increase over subscribers in 2019. Numerous high profile new subscription streaming services launched in the last several years, which provided consumers more options – but along with more options came more subscriptions to pay for and manage. 

With COVID lockdowns largely over, inflation kicking in and an overwhelming number of subscription services chipping away at pay checks, consumers are now facing the first wave of subscription fatigue and for the first time, consumers are being selective about the services they choose to pay for. 

Due to the plethora of new SVOD (streaming video on demand) services, monthly subscriptions for content services are reaching – and in some cases exceeding the costs – for the traditional cable bundles. Here’s how quickly things can add up per month if you’ve cut the cable cord:

  • Netflix’s highest tier plan: $20/£17
  • HBO Max: $10/£8
  • The Disney Bundle: Disney+, Hulu and ESPN: $14/£12
  • The Disney Bundle and Live TV: $70/£58 (more if you add DVR and other options)
  • YouTube TV: $65/£54

As consumers begin examining monthly SVOD bills and start cutting back on subscription content services, streaming services operators (or content owners) are adapting by moving to advertising models—advertising video on demand (AVOD)—to offset continued consumer demand. 

Not only is consumer demand driving streaming services to AVOD models, consumers are also driving streaming services to make more sophisticated decisions at a more rapid pace—or risk losing consumers, demand and ultimately revenue.

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The shift to AVOD (and perhaps other types of offering models in the future) require the implementation of complex technology to provide a premium user experience. From a consumer perspective, it all seems very simple. You buy a smart TV or plug-in a Roku, and you’re set. And, yes, for consumers, for the most part, it’s that easy. 

However, for streaming companies and content creators, the production and distribution of video has always been difficult. And new service offerings, like AVOD, only increase the technological complexities. 

From a foundational perspective, digital streaming services require a very streamlined supply chain platform that moves at the speed of digital and uses sophisticated technology and services such as AI to make decisions, removing human intervention to the maximum extent possible. 

This allows streaming services operators and content owners to monetise content that was originally produced for older television sets, dynamically (and without human intervention) insert just the right number of advertisements in the most appropriate place within the content and push the boundary on understanding the viewer, both in terms of content and advertisement preferences. 

All of these are critical factors in reducing the problem of subscriber churn, which reached 5.2% by the end of 2021, up from 3.2% at the start of 2019.

While the media and content creation industry has seen immense technological advances in the last decade – primarily consumer facing – there are significant industry-wide deficiencies and workflow disruptions within the overall media supply chain. Most of the supply chain is fragmented and operates much like a messy server room of the early 1990s to get by, sacrificing revenue and larger margins, which have a direct impact on revenue. 

Up in the clouds

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So, what’s the solution? It starts with a cloud-native media supply chain platform, that seamlessly powers the entire content workflow, from concept to consumer. Take the entire content supply chain platform, from the initial stage of creating the concept – through the delivery of content to the consumer, all via the cloud. 

Seems simple enough written here as a sentence, but the reality is that there isn’t one single platform that solves the issue from concept to consumer, thus the patchwork of technologies that are currently “making do.” 

The obvious solution is for all stages of the content workflow to take place in the cloud, reducing costly and outdated technology and creating a more succinct and updated supply chain that is cost-effective, can keep up with consumer demand and is more environmentally friendly. 

Thus, as streaming companies are facing a serious consumer push-back for the first time in the streaming lifecycle, streaming service operators have tough decisions ahead to ensure this speedbump in consumer pushback is just that, a speedbump. Therefore, streaming service companies should first look at the internal critical success factors of speed cost and scale to remain in as high demand as they once were. 

Header image by Paul Garland

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