There are many people of a certain age who remember a time when they relied on a single TV service to provide all their favorite content in one place, on a TV. It used to be so easy.
Fast-forward to today and it’s clear that the TV landscape is quite different than it was 10-15 years ago. Today’s audiences are inundated with choices. There are tons of services, streams and platforms to choose from, accessible across any and all of their devices, through livestreams and on demand. Viewers love that they can watch what they want, how they want, when they want it, but the number of choices can be overwhelming.
With so many options, services have also become more expensive and more difficult to manage. It’s beginning to harken back to the traditional cable bundle. While viewers enjoy having all this content at their fingertips, they’re seeking more cost-effective and streamlined access to the shows and movies that they love.
Service stacking hits a plateau
With today’s viewers fragmented across screens, service stacking has become the norm with consumers typically subscribing to 5.4 different streaming services, according to Kantar. This also comes with hefty subscriber churn rates as consumers regularly add and drop services depending on cost and what content is available to them.
For example, just over one in five (22%) U.S. adults cancelled a streaming video subscription within the past three months, according to a survey conducted via Suzy for DIRECTV Advertising. In the past six months alone, 62% of millennials have canceled a paid streaming video or on-demand service, according to Deloitte Digital Media Trends, indicating the highest rate of churn across generations.
As services become harder to manage, viewers are eager for easier and streamlined access to their content of choice. According to Nielsen’s State of Play, 64% of viewers say they wish there was a bundled video streaming service that would allow them to choose as few or as many video streaming services as they wanted. Additionally, 64% of respondents say that a bundled live TV service is a “must-have.”
The balance between business and consumer needs
The industry has certainly taken note of how consumers’ viewing habits have continued to evolve and has started to shift toward bundling, aggregation and consolidation to attract more long-term subscribers.
As seen with with the Disney+, Hulu and ESPN+ bundle a few years back, the industry has been experimenting with bundling as a short-term fix to combat subscription fatigue and cut costs for viewers without requiring too many changes on each platform. While this doesn’t address the larger issue of audience fragmentation, it’s an attractive offer to viewers that gives them a variety of content in one place for a lower price.
Aggregation has also popped up as a new avenue for players who don’t own major streaming platforms to gain a competitive advantage. For example, Google TV has made moves to become a key free ad-supported TV (FAST) channel aggregator by bringing more than 800 free TV channels to consumers in one place.
Meanwhile, traditional video providers have worked to integrate FAST channels and access to streaming services next to premium TV content for a seamless and unified viewing experience. Google TV, DIRECTV and others in the space see aggregation as table stakes for when more platforms jump on the bandwagon to meet viewers embracing FAST channels.
Lastly, consolidation has emerged as a major trend in the industry, most recently with newly-launched MAX, combining the strengths of Discovery+ and HBO Max. While this is a long-term strategy, it’s an initial effort to combat subscription fatigue and fragmentation, attract (and keep) more subscribers, cut down on content spending and make the streaming business model more lucrative across the board.
TV bundling made for today
As viewer preferences continue to shift, the industry is reaching a time where the modern-day bundle is also evolving. This ultimately presents marketers with an opportunity to solve ongoing fragmentation issues, use aggregated data with more consistency, and make it easier to find audiences at scale. TV providers, such as DIRECTV, have implemented audience-based, programmatic and data-driven solutions, across different types of inventory and formats, that help bridge the gaps as convergence continues to take hold.
Looking ahead, marketers can expect to see more industry experimentation in an effort to streamline the options available to viewers, attract more long-term subscribers and make the current business models profitable. As linear and streaming continue to merge, there will likely be more consolidation across traditional networks, FAST and streaming services to appeal to every type of viewer.
Providers who can offer a diverse library of premium content, FAST channels and seamless access to other streaming services in one platform are well positioned to provide viewers with the ease they demand and advertisers with myriad opportunities to effectively reach their key audiences.
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As chief advertising sales officer, Amy Leifer is responsible for leading DIRECTV’s advertising sales business enterprise wide. With over 25 years of experience across sales, operations and technology, she is widely recognized as a problem solver who drives results and a winning culture through teamwork and collaboration.
