The Story of Streaming
Dish CEO: Sling TV to Complement Dish's Core Business [Source: https://www.youtube.com/watch?v=sRfrejSjgWU]
People under the age of 30 are not big on commitment. I mean, they just don't want to be tied down with anything, be it a music system, a television cable subscription, or even a car. The under-30 crowd prefers paying for those items when they need them - and nothing more. How to explain the rise in popularity of Uber for transportation and Spotify for music?
Now their attention is turning to the media and entertainment industry. You see, affluent, millennial consumers would rather stream shows at their convenience than pay for a subscription that gets them hundreds of channels they know they'll never watch. This is driving a sea change in the entertainment industry, which is slowly moving towards steaming content.
One of the biggest players in this streaming space is Amazon. Its CEO, Jeff Bezos, is intentionally blurring the lines between digital entertainment and all other forms of traditional delivery, whether it's movies or television. Amazon Instant Video, which offers television shows and films for rental and purchase and is free to customers with an Amazon Prime account, is really taking off. Bezos is paying big money to the most famous names in the entertainment world to write, direct, and produce custom programming for Amazon's audience. Instant Video service has also just received a whopping $1.3 billion investment. That level of funding suggests Amazon has a convergence strategy in mind. Amazon is not the only one trying to capture the millennials. Dish's Sling Television is also catching up with Internet TV, offering a whole lineup of cable channels for $20.
The advertising landscape is also going through a paradigm shift. The advertisements for a custom-made show on Prime are directed towards certain customers - those whom Amazon knows are more likely to buy the product right then and there. Viacom, one of the largest broadcasting and cable companies in the world, is changing their traditional business model. Via revenue-sharing agreements, the company is now selling advertising on Twitter and Tumbler, where most its customers frequent. You see, there's something about controlling the content that your customers stream and watch that builds overall familiarity with your brand. It's a comfort level.
A recent study at the University of Missouri found that the typical digital consumer experiences major separation anxiety if he doesn't have his digital device for one day. Just one day! So major, in fact, that the person has trouble making decisions and completing of basic, daily tasks. The study found that people under the age of 30 - consumers who never knew a non-digital world or, more importantly, a non-streaming world - become particularly anxious without their devices because they have a perception that their entire lives are stored on them. Needless to say, the study greatly supports evangelists of wearable computing platforms. Interestingly, wearables, which one needs to 'wear' every day - speaks volumes of 'commitment' in today's day and age!
There's no other way to look at it. The future of Pay TV industry is changing forever and we are going to see many new players bringing in new business models. It will interesting to see how digital entertainment will play out. But, those who make timely business decisions and embrace the 'new' will always stay one step ahead of the competition.