Nov 19, 2019

The Video Streaming Battle begins

Consumers are searching for a single, all-inclusive subscription plan that caters to their viewing needs, in this battle to gain the most subscribers, will these platforms provide what is demanded without tainting the viewing experience or increasing prices?

  • According to Ofcom, almost half of UK households have subscribed to video-on-demand subscription services.
  • When considering today’s fragmented TV experience and growing video subscription service landscape, does it come as a surprise that 81% of consumers between the ages of 14-35 are willing to tolerate more advertising to achieve their desired viewing experience?
  • As streaming sites enter the battlefield to gain more subscribers will they be able to provide the near-perfect TV experience their viewers demand without prices soaring?

“70% of consumers would rather pay for premium content than experience a free, ad-support service.” CLICKON Social Labs.

More competition… 

While platforms like Netflix show no sign of slowing down, there has been some speculation that to maintain momentum during the surge of video subscription sites, they may have to integrate advertising to their platform. However, this has been greeted with obvious disinterest from subscribers, but given the increased competition, does Netflix have a choice?

This year sees the release of Apple TV+ and Disney+. The latter launched on November 12th for $6.99 in the US with a likely 2020 release in the UK. Apple TV+ released in more than 100 countries at the beginning of November, retailing in the US at $5 per month and £4.99 in the UK, challenging Netflix at £5.99 for the basic plan.


Meanwhile, ITV and BBC are also set to release their streaming service, BritBox, priced at £5.99 per month, launching before Christmas in the UK. This move is a bold step for both broadcasters as they hope to provide audiences something fresh and unique. Generally, TV broadcasters are under more and more pressure from subscription streaming services like Netflix and Amazon Prime Video due to their ad-free content, unlike scheduled, linear TV.

ITV chief executive, Dame Carolyn McCall has stated that the platform will be ad-free and both TV broadcasters have announced that they will be launching a high-profile marketing campaign and analysis to find the best way to:

“connect viewers between BritBox, ITV Hub and BBC iPlayer as they search for the content they wish to view.”

Continued, “The agreement to launch BritBox is a milestone moment. Subscription video-on-demand is increasingly popular with consumers, who love being able to watch what they want when they want to watch it. They are also happy to pay for this ease of access to quality content and so BritBox is tapping into this, and a new revenue stream for UK public-service broadcasters.”

ITV and BBC aim to create programmes that represent and mould British culture and their new platform will be no different, with plans to commission original British content launching next year.

These up and coming competitors plan on spending heavily on their advertising as they are entering a newly crowded market with Netflix and Amazon Prime Video leading the way. However, marketers face an obstacle now that many of these new services will not host advertising spots. This change is in part, due to changing viewer habits, especially when Gen Z are considered as they have grown up being exposed to platforms like Netflix that are ad-free and on-demand.

Viewer habits are changing...

The assumption that advertising needs to align with previous beliefs that millennials have a 15-30 second attention span is lacking suitable evidence due to the surge in video-on-demand subscription platforms. This demonstrates that when given the right content, millennials are capable of concentrating for a longer period.

This behavioural change is most notable amongst the demographic aged 16-24, whose viewing of traditional TV has almost halved in recent years. Overall, the study conducted by Ofcom states that in 2019 the UK has received a total of 19.1 million video-on-demand subscriptions, which has risen from 15.4 million in 2018.

What does this mean for marketers?

Now that viewers are moving away from scheduled, linear TV and towards on-demand subscription sites that are ad-free, there is an increased risk that brands will find it harder to reach certain audiences.

However, Ofcom’s most recent report states that ad-free streaming services only represent a relatively small, 19% of 16-34 year-olds’ daily TV viewing habits. While the rise in popularity of subscription services is inevitable, traditional broadcasters are still regularly delivering significant volumes of advertising to viewers during peak programmes, so there is still plenty of opportunities for marketers to reach and engage at this time. It is more important than ever that marketers are smarter and more selective about the way they reach their target audiences.

According to a study conducted by Amdocs, 71% of consumers aged 22-35 stated they are willing to provide personal data in return for a more personalised and condensed subscription bundle. Furthermore, two-thirds of consumers between 14-21 year-olds agreed, but only 42% of 51-65 year-olds would contribute to this exchange.

While there is a worry for both marketers and subscription sites that ad-free services could contribute to engagement challenges, it appears that when offered the correct exchange, viewers seem to be more open to personalised ads than first assumed, if it provides a means to supplement future increased costs.

While there is nothing in line to replace TV advertising, the acceptance of ads especially on video subscription services will only be accepted by consumers if it comes as part of an exchange. The streaming platforms will need to battle to provide a near-perfect viewing package at a reasonable price in exchange for personal data, allowing them to target their audiences.