The pandemic has not only altered the way in which we live; it’s altered the way in which we consume content. This past year saw more than five new streaming platforms launch, with a variety of innovative new free, ad-supported streaming TV (FAST) services also making their way onto the scene. If that number seems staggering, it’s not considering that reports indicate more than 25% of consumers added at least one new streaming service to their rotation since the start of this pandemic.
Streaming TV may be on the rise, but is it here to stay? Will the landscape become increasingly convoluted as more services crop up? Or, perhaps are we on the verge of what I look to refer to as the “COVID Content Collapse”? Let’s explore.
An unexpected boom: how the pandemic catapulted the streaming TV market forward.
Nielsen reports an 18% increase in television usage and 38% growth in TV consumption in the United States since the onset of the pandemic. With that, average viewership of SVOD or AVOD rose by 40% from January 2020 to March 2020, and it was predicted by the end of 2020 that SVOD would grow by 47 million subscribers.
At the same time, we have to expect that there will be a flattening, with consumers only willing to subscribe to so many. In fact, according to a recent report, 79% of those respondents said that they would rather use free, ad-supported streaming TV than subscribe to another paid service. These growth indicators signify the beginning of a sudden boom in the free ad-supported streaming TV (FAST) market. FAST services, like DistroTV, feature all the benefits of a paid streaming service without the cost.
With consumers paying closer attention to this exploding market niche, it’s no surprise that advertisers now are too. The streaming TV market’s fast adoption rates signify huge potential for advertisers looking to tap into its virality and reap the benefits of its quickly growing, global audience. A recent survey indicates that 42% of US agency and marketing professionals plan to increase ad spending directed to OTT streaming services over the next 12 months. It makes sense, as through streaming TV, advertisers can hitch their efforts onto a piece of trending content and effectively spread their message algonside it, at a scale and capacity previously unattainable in the traditional TV market.
Given the popularity and benefits, the only question that remains is: is this level of growth sustainable?
Navigating a convoluted landscape amidst a ‘COVID Content Collapse.’
What do we mean when we talk about a potential COVID Content Collapse? This is the idea that as the pandemic draws to a close and degrees of normalcy begin to resume, consumers may potentially re-evaluate their subscription streaming services. We’re already seeing this start to take shape.
While pandemic-induced entertainment restrictions initially led to an uptick in streaming wars, consumers may now be re-evaluating what they’re willing to retain. The free trials that lured consumers to major streaming platforms in the beginning months of COVID-19 are becoming rarer to find. And rising vaccination totals may very well see consumers looking to make up for lost time, meaning less TV time and more time back to socialize and gather outside of the home.
What started out as a form of escapism now has to justify the entertainment value. This is where FAST services can continue to push the boundaries and add more quality content channels to a growing and diverse audience base who are eager to adopt more free streaming services.
What’s next for streaming TV: a reckoning.
When it comes to streaming TV, the consumer is in control of what they want to watch, when they want to watch, and how they want to watch. Every consumer has two TV viewing modes: they’re either looking to “lean in,” and actively seek out content that appeals to them or “lean back,” and put on a channel that they know will interest them, like their favorite sports or cooking channel. FAST streaming services are now providing both of those experiences to consumers, with unlimited options at their fingertips for free.
FAST platforms allow for the creation of more niche channels; for example, brands and publications that were traditionally not associated with a linear TV channel, like TDAmeritrade and Us Weekly, can now create a streaming TV moment for themselves. There is also a deeper level of interactivity that FAST platforms can start to tap into, actively involving viewers in ways previously unheard of in the traditional TV market.
The streaming TV market will continue to evolve, but it will not fade. There will always be a market need for entertainment. The pandemic’s eventual close is an opportunity for streaming TV providers to think through new ways to innovate and ultimately engage with a growing, diverse audience base. Now is the time to get creative, think FAST, and put the viewer back in control.