Television audiences are evolving. Every year, more consumers step away from cable providers — a recent study from the Pew Research Group found that one in seven American adults are television “cord cutters.” While this phenomenon can be viewed as a measure people take to cut costs, there is a more compelling factor involved when making the decision to separate from traditional TV: content.
In the beginning, streaming platforms brought mainstream content in an easily accessible and affordable manner. Binge watching soon became a national pastime. The options were simple, people paid less to watch exactly what they wanted, and they were no longer chained down to restricting time slots for when shows would air.
Roku, for instance, started off with a single channel but currently offers a platform of more than 3,000 channels. Similarly, Dish Network’s Sling TV, which had a lean offering when it first debuted last year, gained 2 million subscribers by the end of year, according to Goldman Sachs analysts.
“When we launched we had a slim-down channel line up and we tried to come through and hand pick — we did a lot of customer surveying in trying to decide which channels were the most important channels for demographics,” Seth VanSickel, General Manager Partner and Business Operations at Sling TV told iDigitalTimes. “I think we found a great balance. Price is a big part of that, but that’s only part of the story — your content still has to be compelling enough to drive customer interest.”
Growing audiences meant growing revenues, and platforms began expanding their libraries to expand their reach. Streaming platforms are now offering niche content to cater to individual interests. Take Netflix, for example, which offers its subscribers iconic content like FRIENDS and Gilmore Girls alongside lesser-known foreign films. Hulu similarly provides viewers the option to stream current seasons of cable TV shows and also gives them access to more interest-specific content like Korean dramas.
For some streaming platforms — like Netflix, Hulu and Amazon Video — this push to create more cordcutters means investing in original content, too. Exclusive shows (like Amazon’s Transparent, Netflix’s House of Cards and Hulu’s recently acquired The Mindy Project) not only brought in more audiences to streaming but also increased the prominence of cord cutting services. Amazon and Netflix, in particular, have created award-winning original content that has earned praises from viewers and critics alike.
At the 2016 Consumer Electronics Show in Las Vegas, Netflix co-founder and CEO Reed Hastings addressed the diversity in Netflix’s lineup for original content.
“We offer movies and TV shows for every taste and every age,” Hastings said during his keynote. “Shows that inform, that provoke, that engage, that delight. We are just beginning to break down the barriers to the world’s best storytellers can reach audiences all over the world. We’re shooting a sports comedy in Mexico, a crime drama in Italy, and a dystopian film about bio-engineering in Korea.”
Original content is not the only logical next step. Sling TV is focusing on curating channels that would not be found on traditional cable TV while keeping its costs constant.
“Our focus has always been about trying to bridge the gap between the best of live TV and the best of Internet TV,” said VanSickel. “ESPN3 is a good example. It’s a traditional channel you would watch through WatchESPN or streaming and now we are going to bring that to our user interface. We have also done this with channels like Maker and Polaris+ that are, what we consider, non traditional cable TV.”
At Roku, which has more than 9 million active accounts, accounting for special interest content means allowing for new channels.
“In the last year or so, we add somewhere around 10 new channels every week,” said Lloyd Klarke, the Director of Product Management at Roku. “It’s a constant increase in both broad appeal as well as special interest or passion appeal.”
The growth means that every demographic has something for their varied interests.
“There’s a growing number of channels that mean a lot to a smaller group of people,” said Klarke. “You can think of fitness channels, cooking channels, travel channels, a Jehovah Witness channel, a Roman Catholic channel, a channel for people who have or know someone with autism, and there is even a channel for dogs.”
Just because consumers are stepping away from cable providers does not mean they’re not interested in cable entertainment. Viewers are still watching cable content but through more convenient means. In fact, many networks are quickly adapting to viewer preferences by launching their own standalone streaming services — say, HBO Go and Showtime NOW — and the consumer response only strengthens the case that people want more flexibility with regards to how they watch content and when they watch it.
For the consumer, the obvious advantage is being able to curate the perfect entertainment package through a combination of increased channel options and original shows and movies. This benefit may not necessarily be better financially, as combining subscriptions can often end up being the same cost as traditional cable bill.
This rapidly changing landscape raises the question: how sustainable is cord cutting? Some analysts warn that cord cutters may regret ditching cable when costs increase but others maintain that content is king — so long as streaming companies keep the consumer in mind, they will be okay. And thus far, that’s exactly what they’re doing.
“We’re listening to our customers and trying to understand them,” said VanSickel about Sling TV’s strategy. “We’ll continue to listen to what our customers say and allow them to point us in the direction of what’s next. We shape what channels we launch next based on customer feedback; we shape what device platforms we’re focusing on based on customer feedback. It’s very important to us.”
In addition to keep the customer’s needs at the forefront, remaining a neutral party is equally essential.
“We remain agnostic … we want to be the neutral choice and leave the choice to the customer,” said Klarke regarding Roku’s neutrality. “One of the core tenants of watching video on the Internet is give you choice and control, as the consumer, and we want to continue to support that.
As Hastings put it: “Tune-in has been replaced by personal choice. We live in an on-demand world and there is no going back.”
