The Webinar on “The State of Streaming Now” by Evan Shapiro gives you a glimpse of delving into all the most recent data, turns, gaffes, and twists in the new Streaming Wars. Evan explained the map below, saying that it’s four representatives of media: audio, video, social, and gaming. Let’s check more on what Evan has shared in the SVOD Vs Fast, the state of streaming webinar.
SVOD Vs FAST: Is the Streaming Landscape Changing?
The above map represents the drivers that change the shape of the streaming industry. They are a war between advertising and subscription, generations: GenZ and millennials. All the companies on the above map have experienced growth in the last decades. In the webinar, the speaker focused on TV and video streaming.
In 1972, the top 10 broadcast and top 10 TV shows had a billion viewers, while the top 20 had a billion. Whereas in 2022, the top 10 shows on the broadcast and cable combined give 1/10 of that. This fragmentation is driving the video economy.
Video entertains more; we’re in a mini fragmented bubble right now. In the last 36 months, we’ve seen a significant move for all videos, from small devices to big ones. From phones to the best screen. Around 52% of YouTube users now regularly use YouTube on CTV. Connected TV has replaced mobile phones and home screens. And for streaming videos, it’s a major happening, and it’s pretty much a dictator who will rule for a couple of years.
Video watching is done at 77% on CTV globally and just 11% on mobile. Asia, for many reasons, is much more mobile-oriented, not just for videos but also for gaming. Asia is like a mobile-first society. But for others, entertainment and video viewing is a big screen experience.
When we go for the content that is more consumed on CTV for the first time in July 2022, streaming surpassed all other video forms on CTV. It has been poorly broadcast for a couple of years but surpassed Pay TV for the first time in July 2022.
PayTV will come back and take the lead when streaming falls. But that will be temporary; streaming will prominently replace Pay TV by this time. It is one of the major drivers for its sports. Major players are Roku, Amazon Fire, Apple TV, and more.
Google and Samsung TV have been major leaders in recent years. Amazon Fire is also the one as they are shifting to the TV. Roku is the market leader with around 31% share, more than other competitors, but they are declining.
One of the major reasons for Rokus share going down is one of the connected devices is Dongle. CTV has gone 34%+, and it can go another 34% up a year in the year ahead. There are many reasons for this, but the major one is people these days are way more connected to television than they were ever. They planned to change their old TV and love to jump over to Smart TV.
For the first time, Charter and Comcast measured great BroadBand distribution in Q1 2022; that’s a major movement in time. They joined the adventure called FAST to compete with Roku because Roku and Samsung are smart TV ecosystems.
Comcast lost a subscriber in the second quarter because they distributed a tremendous amount of free broadband in the 4th and first quarters. As 5G gets better every day and the digital transition is happening right now for all publishers in the video space, an app like YouTube TV and Hulu Live are the 5th and 6th largest MVPDs in America, and they will catch Charter and Comcast very soon.
Both players will pull up in the top four with just video subscribers. FAST/AVOD: all free ad-supported television should be called “FAST.” AVOD is a bit confusing as to what HBO Max and Hulu are. Is that AVOD? Not SVOD (Subscription advertising video-on-demand).
As per the speaker, all AVODs are FAST now; FAST is not going and will do better when compared with SVOD and AVOD.
Two players in the streaming market lost share from Q2 2021 to Q2 2022. Prime is down by 3%, but Netflix is down 9%. Discovery+ is up by 97%, Tubi is up by 127%, whereas Peacock is up by 98% in terms of usage and subscribers.
META and Netflix are the two best case studies to accelerate the business model. Adapters accelerated Netflix’s business model over the last two years. They gained ten million subscribers in 2020 and many in 2021.
When Disney was launched in 2019, it had 10 million monthly subscribers. What they fail to do is to adjust a business model they ignored. The problem Netflix was having was way before the first quarter, Q1 2021, Q2 2021, and Q3 2021; they were “SUBFLATION”; they were losing more subs than they were gaining.
In Q2 2022, 138% of their Gross Adds. We just see that Netflix added 100 million subscribers in the second quarter, but they lost 138; that’s a bad thing. In Q1, it was 129%, but in Q3 2021, for every 100 subs they added, they lost 104, and nobody paid attention to it. They have to look at all these things to understand what is happening. Adding ads to this model is not good as it can’t help Netflix to get the problem solved, which they’re facing.
One of the listeners of the webinar asked the question about the Low-Quality Subs to the speaker of the webinar SVOD Vs. FAST, she asked what you mean by low-quality sub and what would be high-quality subs for Netflix.
The speaker replied that high-quality subs are those that have a long lifetime value (LTV). The problem is they know how to get those subs, and they got more. And honestly, Android subs have a lower lifetime value than Apple’s subs, for example.
The problem is not limited to Netflix; it’s an industry-wide problem. The industry signed up a tremendous amount of gross ads in Q1 2021 and Q2 2022. They kept a lot fewer amounts; there are two different reasons for that.
1. A lot of the new net shows, Apple, Discovery+, and Paramount+, combined brought 2.9 million net subscribers in Q2. Those 3 alone brought 2.9, but the whole industry only brought around 2.5, which means many players lost lots of subs. There are a lot of differences between the NET Adds and Cancel subs.
2. The Second problem is serial tuning. This is somebody signing on to the streaming platform, using a free trial, canceling the billing cycle, and jumping to other platforms with many movements.
Around 31 million Gross Adds in Q2 in the industry; this is a lot lower than Q1, but it’s still a historically high number. In Q2 2021, they kept 35%, and in Q2 2022, they kept only 8%; the average here is 35%, which means 35% of subscribers sign up or return. Hence, it could be a better model; keeping only 8% of every 100 subscribers is not great; this number can probably get 0.
The issue is people are not paying as much; the regional pay has gone down to a great extent in recent times. But what fascinates me is that the amount people are paying has increased. But even though they are higher, they pretend it’s reasonable; hence, the number is going to fall.
They’re experimenting with free as a way to supplement pay or trading out premium only for a mixed-up premium, or they’re cutting out one service. People are canceling premium only and signing for a mix-up premium; this is just the subscription, not the free stuff.
FAST is 95% high, combining AVOD and FAST together. When you look at SAVOD (Subscription Advertisement Video-On-Demand), it is growing in Q2. What is the answer to all the questions, like people not being ready to pay and more?
The answer is the types of programming that you put on your services and the bundles you create. The major answers to the problem are:
Quick Programming
Daily and weekly, that is live and not replaced by anything else. The best example is Sports. When you look at the cable business, you can find that it’s 100% business, but only 30% of the audience uses it. Whether it’s ESPN+ or any other, they see that their audience is steady.
Apple, Amazon, and Disney are overpaying for sports. Netflix is the only major streaming without live sports. Live viewership and urgent viewership. These are the things that can be stable in the streaming world. And Netflix is entirely out of the game.
News
If you want your subscribers to touch your product every week, they will turn. But if they’re touching your product daily, you’re good. Spotify has the lowest turn in all the entertainment; why? Because their users touch their product every single day.
Spotify has 185 Million Premium Subscribers Globally, which drives 90% of its revenue. 90% of music streaming leaders’ revenue comes from 45% of their users. But you need daily touch products.
ABC, CBS, CNN, and NBC all got into the local free streaming news and are doing quite well with it. Roku and Samsung are also doing well with it. 40% of people get their news from social media, while 51% get it from streaming, and it’s growing very fast.
So these are areas to look for; News is not for what people pay for or are ready to pay for. Apple and Amazon are also planning to enter into it.
The average household has an average of 12.5 products in America, but half consider it a must-have. Amazing Prime Video subscribers are less than half, but when mixed with gaming and Music, it adds around 20%.
Alphabet is going into television; it’s one of the fastest-growing CTV operating systems. They’ve overtaken Roku. We’re going to hear a lot about Netflix and Disney taking ads. Social media like Twitter, Snapchat, Meta, and others have a disastrous scope; people chase quality content.
SVOD Vs FAST: Explore Every!
Exploring SVOD Vs FAST can help you gain deep insight into the difference between the two. Here’s a comparison between Subscription Video on Demand (SVOD) and Free Ad-Supported Streaming (FAST) presented in table format:
| Feature | SVOD | FAST |
| Payment Model | Requires a subscription fee for access. | Free to users; revenue generated through ads. |
| Content Access | Exclusive access to a library of content. | Offers free access to a variety of content. |
| Ad Presence | Typically ad-free, as users pay for content. | Ad-supported, with ads integrated during streaming. |
| Revenue Source | The main revenue comes from subscription fees. | The main revenue comes from advertising. |
| Viewer Experience | Uninterrupted viewing without ads. | Ad interruptions during content playback. |
| Content Variety | Focus on high-quality, exclusive content. | Offers a mix of licensed and original content. |
| Viewer Base | Attracts subscribers willing to pay for content. | Appeals to users seeking free access to content. |
| Viewer Engagement | Subscribers may be more committed due to payment. | Attracts a broader audience with free access. |
| Business Model Challenges | May face subscriber retention challenges. | Relies on ad revenue, requiring high viewership. |
| Examples | Netflix, Hulu, Disney+, Amazon Prime Video. | Tubi, Pluto TV, Crackle, Peacock (free tier). |
It’s important to note that all these characteristics can vary across different SVOD and FAST platforms, and the industry is dynamic with ongoing changes and innovations.
Why Don’t You Try a New Model for Your Streaming Business?
As the streaming industry evolves, the FAST model has emerged as a rapidly growing trend, offering streaming businesses an opportunity to engage a wider audience. For those operating streaming apps like Netflix or similar platforms, considering innovative approaches to stay competitive is essential.
Seeking support from a specialized streaming platform development company can be a great move to introduce new features, functionalities, and overall improvements to your platform. Alphanso Technology can help you launch your FAST streaming app.
For inquiries and to explore how they can contribute to the success of your streaming business, you can contact sales@alphansotech.com. Our expertise can be instrumental in achieving your targeted goals and staying ahead in the dynamic landscape of the streaming industry.
Frequently Asked Questions (FAQs) about SVOD Vs FAST and Streaming Business:
What is the FAST model in the context of streaming?
The FAST model means advertisement-supported streaming, where revenue is generated through ads.
How is SVOD different from FAST?
SVOD requires users to choose a subscription for premium content access, whereas FAST provides free access to ads-supported content.
What are the key drivers shaping the streaming industry?
The key drivers include the ongoing war between advertising and subscription models, the influence of different generations (GenZ and millennials), and the constant growth experienced by companies in the streaming industry.
What challenges is the streaming industry facing in terms of subscriber retention?
The industry faces challenges such as “SUBFLATION,” where they are losing more subscribers than gaining. Additionally, there’s a phenomenon called serial tuning, where users hop between platforms during free trials.
How are companies experimenting with business models to address subscription challenges?
Companies are experimenting with free models to supplement the pay, trading out premium-only for a mixed-up premium or cutting out one service. This includes canceling premium-only subscriptions and signing up for a mix of premium services.
What are the areas to focus on for stable streaming in the future?
Quick programming, including news, daily touch products, and live sports, can contribute to stable streaming. Companies are exploring the combination of AVOD and FAST for better results.
How can Alphanso Technology help in launching a FAST streaming app?
Alphanso Technology can provide support in launching a FAST streaming app by adding new features, functionalities, and overall improvements to the platform. For inquiries, you can contact them at sales@alphansotech.com.
Note: All images for this blog are captured from the Webinar on “The State of Streaming Now” by Evan Shapiro