Skip to main content

3 Things VOD Providers Need to Compete in the Streaming Wars

"It’s only by committing to content, discovery and eliminating friction that services will have what they need to compete and survive." -Dan Hurwitz, Penthera

The video-on-demand space is already saturated, but the number of media giants entering the space is going to turn the market into a veritable “bloody” battleground. Disney+ and Apple TV+ officially have a November launch dates, NBCU has officially announced its Peacock platform and WarnerMedia's HBO Max is coming soon as well. They join Netflix, Hulu, Amazon Prime Video and others in the fight to add subscribers and maintain engagement.

As we strap ourselves in for this highly-competitive era, there are already reports of streaming subscription fatigue among viewers. This leads to major questions about the shape of the streaming industry, and which platforms will last.

For every big media company in the headlines, there are several smaller VOD services that are competing for the same viewer attention. They might not have the budget and the star power, but they have offerings that appeal to unique audiences.

While the competition is bound to be brutal, it’s possible for all of these services, large and small, to compete. Surviving – and possibly thriving – comes down to three things that must be given equal attention: content, ease of discovery, and eliminating friction.

Great Content

Content represents the front lines of the VOD wars. It’s the most obvious differentiator, it gets the headlines, and it’s the area where the platforms are throwing around gobs of money. Netflix invests more than $12 billion annually in its original programming. Apple has reportedly invested $6 billion, while Disney will spend $1 billion by 2020, to go along with its existing library of Disney, Pixar, and 20th Century Fox titles. Meanwhile, HBO Max has invested $425 million to be the home of Friends, a show that went off the air 15 years ago but has become a streaming powerhouse.

VOD services don’t need to match these sums, but they do need to ensure that they have content that will attract and engage subscribers. Whether it’s original programming or licensed content, all VOD services will need to find the right balance going forward.

Ease of discovery

Platforms can invest all the money in the world on programming, but that doesn’t matter if viewers can’t find the content. Netflix’s UI has been described as “disorganized chaos,” while research shows that nearly half of all viewers will give up on searching for content if they can’t find it in a few minutes. This is a massive issue for those platforms breaking the bank on production.

Marquee shows can drive subscriptions, but if a viewer binge watches a single program and then can’t find anything new to watch, they’ll likely cancel the service. Why pay a monthly fee to spend more time navigating a library than actually watching programming?

Content discovery mechanisms and easy-to-navigate user interfaces are as important as the content itself. VOD platforms need to invest in insights drawn from the viewership data at their disposal to improve and innovate the recommendation and discovery mechanisms, reducing churn in the process.

Eliminate friction

When viewers can find engaging content, they need to be able to watch it without interruption. While the streaming wars are often seen as a shift from cable TV to digital in-home delivery, viewers are increasingly watching VOD on their mobile devices, on the go. The average adult watches 40 minutes of mobile video a day. But mobile connectivity is prone to issues like buffering, slow start times, and failed ad loads.

These issues often happen in the last mile of content delivery, and are rarely the streaming service’s fault – more often than not, they’re caused by poor signal or spotty WiFi. Even Apple, which will have a huge hardware advantage over its VOD competitors thanks to the iPhone and iPad, will fall victim to these issues.

This applies to in-home viewership as well. VOD viewers still want to watch the really big shows live when they air, and an outage can create negative headlines, no matter the cause. Meanwhile, both Hulu and Disney are promoting live sports as add-ons to their offerings, and any kind of lag or delay can kill the consumer viewing experience. While watching a very important playoff hockey game on Hulu, my brother, who was watching on cable, texted me “woo hoo” a full 40 seconds before I saw the winning goal, effectively ruining my experience of suspense. It’s not “live” if a friend with cable sees the action before you do.

Whether it’s in-home or on the go, viewers don’t understand the nuances of video delivery, and they tend to blame the streaming platform for delivering the bad experience. Viewers may not choose a streaming service because of its playback capabilities, but they will cancel their subscriptions if they keep encountering frustrating experiences. As the competition ratchets up, it’s imperative that VOD services do what they can to eliminate friction and ensure their content is available.

The truth is that there are only so many hours in a day to watch VOD content, so it’s unlikely that a significant portion of households will subscribe to half a dozen streaming services. The more likely path is that users commit to two or three favorites, which makes it all the more important for services to maintain that level of commitment and engagement.

Great programming might capture subscriptions, but it’s only one of the three legs that VOD services need if they want to stay standing in the tumultuous, competitive times. It’s only by committing to content, discovery and eliminating friction that services will have what they need to compete and survive.

Penthera is a global software company that develops and deploys products to help OTT providers improve the mobile video experience and drive business results.