Some might recall the content streaming war at the end of 2018 between Verizon and Spectrum Communications that left 4.5 million Verizon customers scrambling to find where to watch the NFL payoffs. ESPN, Disney, and CBS had refused Verizon their content while Spectrum wrangled over a contract that would force Verizon to pay much higher fees for carrying their channels.
It seems Spectrum, now the second largest cable operator in the U.S., pushed Verizon to the edge using their gambit intended to make second largest telecommunications company blink and shell out . Typically, feuding over consumer-based contracts rarely make their way down to the consumer. After all, who in their right mind wants to severely damage their largest customer? However in this case, Spectrum shut the switch of its prime channels, leaving consumers in the dark.
The obvious reaction of many Verizon customers was to seek alternatives. But that effort, in and of itself, led down numerous rabbit holes leading consumers into a new world of content streaming.
CBS, PBS, ESPN, Disney, BBC and MSNB, to name a few Verizon standards, can now be purchased as standalone subscription services. In fact, most viewers might have already discovered it’s quite difficult finding any current and in demand, thus valuable, content for free over the Internet.
These new business models are plumb for service designers to tuck into their bag of models. Each offer degrees of insights that others have found with respect to user value, cost versus benefit, and user tolerance. Further, the machinations that are yet unresolved shine a light into ways of positioning a service in a field of crowded competitors. In time the market will settle and we will be left with a different landscape of consumer-preferred options along with lessons for how to maneuver and succeed for profitable market share. These will be valuable lessons for service designers in how to design and improve services.
At this point in time, however, the video content streaming market resembles the early days of automobile manufacturing, when hundreds of machinists were turning out reasonable horseless-carriages. This predictable cycle of industry melee in its infancy also resembles the 1990s heyday of computer manufacturing as newly minted titans sought greater market share experimenting with user-friendly features and novel business operations.
Today, meantime streaming choices have become quite complex. Consumers are able to subscribe to aggregate channel providers, genre-segmented providers, business-model segmented providers, including those providers who stream exclusively to internet enabled devices. The choice is more difficult when providers compete with releases of must-see original content. The familiar networks (free by law in the U.S.) advertise much more nowadays for their original content shows; the effort is try and hook viewers (creating viewer loyalty, as well), who in turn demand a personal experience and will pay for a subscription.
In this year, expect Apple TV to launch their own service, in competition with Netflix, Amazon Prime and Hulu, featuring its own original content and those of others. And look for companies $TBD, and Warnermedia, to compete in that mix. Disney is also launching a streaming service this year providing exclusive access to Disney theater-released movies and its own content that will air nowhere else. Plus, Jeffrey Katzenberg, DreamWorks co-founder, is set to launch New TV that is expected to develop and stream 10-minute shows available only for those with mobile devices. Then there’s DC Universe, which will carry a spate of classic DC Universe shows and movies along with live action and animated programs.
Few of any of these providers have shared their business models, such as cost-per, subscriptions, bundled content, or something market-disruptive. This is highly consequential when it comes to consumer choice and experiences, which service designers will need to factor. Those consumers who choose a channel, such as CBS All Access, will pay $7 a month; WatchESPN, $5 a month; or an aggregate provider of multiple channels, including DirectTV, will pay $45 minimum a month plus a 24-month contract. Youtube TV starts at $40 a month, and then there are the commonplace standards who bundle telecommunications services such as Verizon and Comcast.
One blogger said he and his mates find a series that they want to watch, sign up with the service provider, then binge the show, and when they’re done they ditch their subscriptions.
When all is said and done, consumers will make trade off choices among content, interest, effort, convenience and cost. On the service provider side, survivors will be those who can offer sufficient distinction among one or more of those factors, while claiming enough market share to offset costs and turn out profits.