Consulting firm Magid offered predictions for the entertainment industry, and streaming in particular, in 2024. It predicted increased churn among the major streamers as FAST channels proliferate and the monthly price for a subscription to a premium streaming network goes up.
“Players large and small will experience turbulent churn seas ahead unless they develop strategies to manage churn with precision,” Magid said.
Magid shared its findings in an online presentation December 11. The firm broke subscribers into six different groups. The group known as Hypers are a high-churn, high-income segment that accounts for almost one-third of new subscribers on average in any given month. While they often split from an existing service, they are also “hitmakers, social amplifiers and organic marketers that carry more services (six) than the average home (3.3),” Magid said.
The rise of ad-supported video-on-demand (AVOD) services will prompt subscription video players to “concentrate their investments on what AVOD doesn’t do as well — forcing a shift in strategy.” AVOD excels in news, kids programming, family programming and reality content, Magid said, and so SVODs will have to do a better job delivering and marketing premium content.
“The result will be SVODs that look and feel more akin to the HBO of old, turning to, for example, expensive dramas and movies off-net in their first run outside of theatrical and sports rights, as a way of differentiating their service when it comes to quality content,” Magid said.
Tony Cardinale, Magid senior VP, data and science, global media and entertainment, said the SVOD players, paradoxically, will spend less on programming. “They’ll find ways to do it more efficiently,” he said.
Magid also sees a rise in the bundling of channels. “Consumers will be recreating the bundle that they had via cable 15 years ago but with a different assortment of assets, tied together synergistically through creative partnerships,” the firm said, calling for networks to be open-minded about partnering with rivals.
“Those who have been competitive in the past will have to put their emotions aside and play nice in the sandbox by partnering strategically,“ Magid said. “Ultimately, services will have to marry each other in order to stabilize their businesses and establish a sustainable business model.”
One subscription and one access point will make life easier for consumers.
Magid also predicted that sharper marketing in the streaming universe will rule in the new year. “In 2024, there will be a move towards precision marketing as messaging to the right audience about the right shows will be key to streaming success,” the consultancy said. “Marketers’ decisions around spend, especially when it comes to hidden gems, will take on new importance as streamers attempt to identify who's watching and why and work to attract brand advocates who will tout the value of their service.”
