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Streaming audiences are currently reaching their limit when it comes to monthly subscription fees. Will they pay for Netflix, Amazon, HBO, Hulu, and subscribe to upcoming streaming services like Disney+? Consumers are increasingly fatigued with the growing number of choices they have for streaming video across multiple platforms. At one point, switching from traditional television to streaming was a simple proposition that involved just one or two subscriptions.
As more companies launch their own streaming services and jump into the red ocean competition of spending billions on original content, NBCUniversal will leave out this stage of the streaming disruption and move forward to the next one. Recently, the company revealed its plans for an ad-supported streaming platform, which will launch in 2020. The underlying hypothesis is simple. When you ask the fatigued consumers if they would accept advertising in exchange for free content, the answer predominantly is yes.
Such ad-supported streaming service will not hurt the traditional advertisement business model of parent Comcast, a cable company. Neither will it hurt its cable subscribers. Streaming customers only pay if they do not already subscribe to cable or if they do not want to see ads. Bringing the free-view option known from broadcast television to NBCUniversal's streaming service will solve further problems of paid-subscription platforms: limiting potential audiences and discriminating low-income customers. Also, Comcast recently acquired Sky, which allows the company to further expand its offerings to about 24 million customers in new geographic markets such as the UK, Italy, and Germany.
As cable company, Comcast benefits from increasing video streaming in homes. Therefore, NBCUniversal also aims at shrinking or even eliminating the three-month window between movies showing in theaters before being able to watch them at home. Making theatrical releases available earlier to subscribers might be a critical success factor for the upcoming streaming platform.
NBCUniversal is not the only company going into ad-supported streaming. Viacom has just acquired linear-like video streaming service Pluto TV for $340 million. Amazon launched its ad-supported streaming service Freedive and YouTube is adding free movies.
With the increasing number of streaming choices, aggregation becomes inevitably necessary. The idea is to bundle streaming services, which require individual passwords and payments, into a single subscription with only one login and one bill. I personally believe that the emergence of ad-supported streaming services will now quickly boost and facilitate the emergence of streaming bundles. For more information, have a look at my article: The Rise of Streaming Aggregators
While the future of streaming has not entirely been decided, ad-driven streaming platforms and streaming aggregators point to a surprising prediction: all the disruptive new streaming platforms are potentially just re-creating the familiar traditional television model.
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