Shakeout among streaming video providers imminent | VOD | News | Rapid TV News
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A survey from global management consulting firm LEK has found that even as number of cord-cutters grows, there may be signs that the streaming market has become over-saturated.

netflix UK 18Feb2018The analysis suggests that as these big three subscription-based video-on-demand services — Netflix, Hulu and Amazon Prime Video — vie with each other for streaming market share, the arrival of value-based skinny bundles, premium networks and genre-focused services aiming for the same space are leading to growing signs that the market me be headed for over-supply.

The LEK study noted that following a record year of 34 notable streaming launches in 2015, 2017 saw the debut of only ten such services. Moreover, four-fifths of those in the survey reported having just the right amount of video subscriptions. It found that over three million US consumers left pay-TV behind in 2017, a threefold increase in the past two years which saw cable subscribership dropping to less than 80% of households for the first time in 15 years. But the LEK also found that these cord-cutters were not actually consuming less video content and the survey pointed out that by 2020, the big three are expected to approach a combined 200 million US subscriptions.

Among other trends discovered, LEK found that targeted content and budget pricing do not guarantee success — evidenced by the suspension of NBC’s $3.99/month SeeSo comedy streaming service after less than two years — and Consumers are now at the point where aggregators of services are of growing appeal. Millennials alone were found to simultaneously carry at least six different services each, with their preferred model of consumption being aggregator services.

“Despite the prevalence of cord-cutters, subscription streaming services are now the ones that will need to adapt to survive,” observed Alex Evans, managing director in LEK’s Media and Entertainment practice and co-author of OTT in Transition: Finding Success in Subscription Video report.

“While the big players, like Netflix, are already winning, we expect genre-based services that successfully cater to niche tastes will also have a role to play. Niche services will need to continuously update high-quality content, while ensuring their programming will resonate with their fickle audience. And larger video streaming platforms must keep an eye on what both traditional TV and emerging players are doing so they themselves don’t get disrupted by innovative content and pricing options.”