Report: Originals No Longer Drive Subscription Numbers; Streamers Must Expand to Sports, Gaming
It’s likely that many streaming service operators are pining for the old days. A time when the market was less saturated, when over-the-top (OTT) streaming was new and cheap, and providers could dazzle customers with one original show or movie per month, but that was a long time ago.
Now, everyone has big-name originals. Companies have acquired big-name intellectual properties like “Star Wars,” “The Witcher,” and “The Lord of The Rings,” and seemingly every streamer is rushing to develop a big-budget show adapted from those IPs. With the number of streaming services at an all-time high and each one turning out more and more content, with that kind of market saturation, it’s increasingly difficult for a particular service to stand out from its competitors.
According to research from Publisher's Clearing House's Consumer Insights, those companies had better find a way to differentiate themselves if they want to survive. PCH surveyed 15,000 Americans on what digital content they were most willing to pay for, and the answers reveal stark differences in age and income groups, but also point to a potential future for the streaming industry.
Movies and scripted TV clearly top the list of what people are most willing to pay for, but every service has attractive options that no other service can offer. So how will streaming services be able to avoid churn, and keep people subscribed once they’ve got them on the hook?
That answer gets a bit more complex, though the PCH survey offers insights. Older viewers ages 35-64 value sports offerings, and the older customers are able to watch more sports the more that they are willing to pay. Younger viewers, on the other hand, value gaming more highly than anything else.
It will be fascinating to see if the popularity of gaming and its importance to a streamer’s success is a generational anomaly. Will the willingness to pay for games decrease as customers age; will the generations raised on gaming continue to want to pay for gaming in their golden years, or will they “grow out of it?”
Netflix’s heavy investment in its mobile games shows what it thinks the answer will be, and it will be interesting to see if other streamers jump onboard the gaming train.
The willingness to pay for sports is definitely generational, and not specifically based on income, as every single economic demographic surveyed indexed in line with the general population when it came to willingness to pay for live sports. Services like Prime Video, Paramount+, and Apple TV+ are leaning into live sports offerings, suggesting that they believe sports will be an important factor in their future success.
Streaming has changed the media landscape forever, and there will be no going back to traditional TV. Going forward, however, it seems that there are two paths for streaming to evolve: with expanded gaming, or with expanded live sports. Which path streamers choose and how well they pull it off will not only determine the future of their platforms, but the future of the streaming industry as well.