Tech.pinions

Streaming Bundles, Advertisers, and Aggregators

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I’m a fan of all things sci-fi. Which is why I was excited to hear about the new Star Trek Discovery Series. What was less than exciting was that CBS is using this show to promote their CBS All Access pass and the show is only available, at least right now, to CBS All Access subscribers. There is a one-week trial so I decided to do it so I can watch the first three episodes of Star Trek Discovery and choose the $5.99 a month with limited commercials. There was also a $9.99 a month option. Either one was a little shocking given CBS does not offer enough exclusive shows on its All Access offering to warrant either subscription. Regardless I found CBS’ approach here interesting.

One thing unique to this service over others that I have tried, is it asked me for more personal details than other streaming services. It asked for age, gender, and location. The result of this was actually much more relevant ads than others I’ve seen on streaming services. I saw more ads for tech products, things of interest to men under 50, and a range of other commercials that really weren’t that bad overall. Which got me thinking if the ultimate goal of these type services is to ultimately provide a better ad experience, thus leading to better revenue for the networks.

Nearly every brand and advertising study I’ve seen over the last year confirms that consumers are fed up with the amount and lack of relevancy of ads they see both online and on TV. The same consumers also suggest they are willing to tolerate better and more relevant ads as a trade-off for free or lower priced premium content. While this implementation of CBS All Access is a possible way to bring more relevant ads to consumers, it is also riddled with other challenges.

The primary challenge being how many additional subscriptions consumers will tolerate. Assuming one subscribes to a skinny bundle, or some kind of bundle, other options are Hulu, Netflix, Amazon Prime Video, HBO, now CBS All Access, etc., as places where you have exclusive premium content. Soon Disney will offer a subscription service, and it is likely other networks follow suit after CBS as well. My main issue with so many of these services is by the time you subscribe to all of them you want you are paying about as much as a cable subscription.

Besides the challenge of consumers being strangled by too many subscriptions, marketing and catalog of exclusivity becomes a challenge for the networks also. They will be faced with trying to decide what content to offer to their subscribers only and which to leverage their tried and true business model of mainstream broadcast distribution.

All of this leads me to believe a better way to aggregate this content must be possible. I’ve long said the bundle is not going away, however, who we pay may change. We may not pay a Comcast, DirecTV, Dish, etc, any longer and rather pay Netflix, Amazon, etc., instead. Once a large-scale company like Amazon or Netflix decide to leverage their sizeable user base to start fighting, or paying for premium network content, you can imagine they are in as good of a position as any to become the new aggregators of our premium content.

There is one other company that could be of interest as an aggregator and that is Apple. If you think about Apple’s sizeable customer base of 800-900 million affluent consumers, you can argue that Apple is in as good of a position as any to aggregate content from every source more relevantly for customers. In fact, this is ultimately what Apple TV, and the TV is executing on. While I made the point earlier that people don’t want half a dozen or more subscriptions, the question is if they can all be managed in one place like the iTunes content store, maybe they are more willing to have multiple subscriptions if they can be easily managed in one location. This is where iTunes could come into play.

One thing is certain, we are in the midst of a profound change of how consumers discover, consumer, and pay for premium content. Right now the landscape is a mess, however, as the market figures out what works and doesn’t work, I believe we will be back to a small number of aggregators once the dust settles.