Ironically, Too Many Video Streaming Choices May Drive Users Back To Piracy

from the adapt-or-perish dept

To be very clear the rise in streaming video competitors is a very good thing. It's providing users with more choice, lower prices, and better customer service than consumers traditionally received from entrenched vanilla cable TV companies. It's the perfect example of how disruption and innovation are supposed to work. And given the abysmal customer satisfaction ratings of most big cable TV providers, this was an industry that's been absolutely begging for a disruptive kick in the ass since the 1980s.

But we've also noted that, ironically, the glut of video choices--more specifically the glut of streaming exclusivity silos--risks driving users back to piracy. Studies predict that every broadcaster and their uncle will have launched their own direct-to-consumer streaming platform by 2022. Most of these companies are understandably keen on locking their own content behind exclusivity paywalls, whether that's HBO Now's Game of Thrones, or CBS All Access's Stark Trek: Discovery.

But as consumers are forced to pay for more and more subscriptions to get all of the content they're looking for, they're not only getting frustrated by the growing costs (defeating the whole point of cutting the cord), they're frustrated by the experience of having to hunt and peck through an endlessly shifting sea of exclusivity arrangements and licensing deals that make it difficult to track where your favorite show or film resides this month.

In response, there's some early anecdotal data to suggest this is already happening. But because these companies are fixated on building market share, and this will likely be an industry-wide issue, most aren't seeing the problem yet.

Others are. The 13th edition of Deloitte’s annual Digital Media Trends survey makes it clear that too many options and shifting exclusivity arrangements are increasingly annoying paying customers:

But the plethora of options has a downside: Nearly half (47%) of U.S. consumers say they’re frustrated by the growing number of subscriptions and services required to watch what they want, according to the 13th edition of Deloitte’s annual Digital Media Trends survey. An even bigger pet peeve: 57% said they’re frustrated when content vanishes because rights to their favorite TV shows or movies have expired. “Consumers want choice — but only up to a point,” said Kevin Westcott, Deloitte vice chairman and U.S. telecom and media and entertainment leader, who oversees the study. “We may be entering a time of ‘subscription fatigue.'”

As it turns out, people don't like Comcast, but they do ironically want a little more centralization than they're seeing in the streaming space. What that looks like isn't clear yet, but it's something that will slowly get built as some of the 300 options (and growing) currently available fail to gain traction in the space:

All told, there are more than 300 over-the-top video options in the U.S. With that fragmentation, there’s a clear opportunity for larger platforms to reaggregate these services in a way that can provide access across all sources and make recommendations based on all of someone’s interests, Westcott said. “Consumers are looking for less friction in the consumption process,” he said.

Variety's otherwise excellent report doesn't mention this, but a lot of these customers are going to revert to piracy. It's not clear why this isn't mentioned, but it's kind of standard practice for larger outlets to avoid mentioning piracy in the odd belief that acknowledging it somehow condones it. But if you don't mention it, you don't learn from it. You don't understand that piracy is best seen as just another competitor, and a useful tool to gain insight into what customers (studies repeatedly show pirates buy more content than most anybody else) really want.

It's easy to dismiss this as privileged whining ("poor baby is upset because they have too many choices), and that's certainly what a big segment of the market is going to do.

But it would be a mistake to ignore consumer frustration and the obviously annoying rise of endless exclusivity silos, given the effort it took to migrate users away from piracy and toward legitimate services in the first place. The primary lesson learned during that experience is you need to compete with piracy. It's not really a choice. It's real, it's impossible to stop, and the best way to mitigate it is to listen to your customers. Building more walled gardens, raising rates, and ignoring what subscribers want is the precise opposite of that.

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Filed Under: piracy, streaming