Insights: How Smaller VOD Services Can Attract Subscribers Amid Epic Competition

By 10/03/2019
Insights: How Smaller VOD Services Can Attract Subscribers Amid Epic Competition

Hundreds of video-on-demand services have already crowded the interwebz, and several big new beasts from some of the world’s biggest companies are weeks or months from joining the fray.

Amid all that, how the little guys find more subscribers is a literally existential issue. But a panel I moderated at last week’s Future of TV conference in New York suggests there’s room even for the little guys, if they’re smart about how they maneuver among the 900-pound gorillas such as Netflix, Amazon, and Hulu, as well as newcomers Disney+, Apple TV+, HBO Max, and Peacock.

Mike Vorhaus — who, along with Future of TV co-organizer Ned Sherman, presented at this year’s VidCon, detailing their new study on TV’s future, video-on-demand services, and audience interest in both — has said there already are more than 300 services in the market. That’s a lot. And going forward, it’s only going to get more complicated for operators, creators, and customers.


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But there are ways to make your niche video service successful, according to my own panel of business development and marketing executives at the conference. They detailed multiple tactics and approaches crucial to a smaller service’s success:

  • Be different. Don’t try to be everything to everybody. The big services will offer tens of thousands of hours of shows. Smaller competitors can offer a tightly focused library of shows that can be marketed effectively to a core audience. “With the numbers you’re talking about, 300 streaming channels, the key is differentiation,” said Ian Greenblatt, managing director of tech, media and telecom at J.D. Power. “How are you going to find the right content mix, because all content is niche to someone, and all niche content is primary content to someone. So how do you find the right mix?”
  • Exclusivity. It’s good to be different. It’s even better to have what no one else has: exclusive content not otherwise widely available. “What they have to their benefit is exclusivity,” said Ronit Schwartz, director of business development and partnerships, media and telecom at Kaltura.” It’s not available in any of the bigger players, so balancing those two is where they could potentially succeed.”
  • Know your audience. You know your shows, but do you know who likes to watch your shows? Research will matter a lot. “One of the biggest challenges out there is understanding your audience,” said Pamela Young, executive director of Valassis Digital. “Your content can be incredible, but if you don’t have the right folks interested in your content, if you’re not reaching them or finding data signals online or offline that can do that, it’s going to be incredibly hard to find subscribers, or for them to stay.”
  • Find deep data you can depend on. A smaller service needs to find a reliable source of audience data that can drive deep analysis and smart decision-making about programming, positioning, and more. “If you’re a smaller player, you have to absolutely hyperfocus on your audience,“ Young said. Given the challenge of audience discovery, “You’re going to have to find them elsewhere, and you’re going to have find them off the platforms you’re typically used to getting them in.”
  • Get granular. Being focused with your library and your customers is vital. But get even more granular with your data, down to why one given fan likes a particular program. Subscribers are signing up largely for specific programs more than an entire service. “The closer you can get to your consumer, the more we can tell if they’re truly engaging in your media,” Young said.
  • Know what else your audience likes. It’s a psychographic approach to understanding your site’s fans. And that means understanding what else they like besides your programming. “Who is that person? What are they doing outside of your service, outside of watching your programs?” Young said. “Are they going to the gym? Are they shopping for particular things? Those are all telling about the lifestyle that that person leads. It’s not too dissimilar to how niche consumer packaged goods are marketing themselves.”
  • Use data to give them more of what they want. Netflix has long used data about viewing histories and preferences to tweak what users see next.  But even small services must use those tactics to build a deeply immersive experience that encourages users to binge and come back. User recommendations have become “table stakes” for video services, Schwartz said: “But you can use it to alter the entire UI/UX to surface content and put it at the top. There’s no reason my home page should look like your home page.”
  • What’s a win? Deciding what counts as a win can be difficult, because the metrics for a win can be wildly diverse. Apple may give away 250 million or more free accounts in the next year, hoping that TV+ shows make its iPhones, iPads, and iMacs more valuable to users. Disney+ is competitively priced at $6.99 per month (and can come deeply discounted if users subscribe to Disney’s $12.99 bundle option, comprising Disney+, Hulu, and ESPN+), but will feed fans ever more deeply into the Mouse House’s iconic brands such as Star Wars and Marvel. Comcast will give away Peacock to broadband subscribers, and make money from ads while perhaps reducing churn among its internet users. When it comes to smaller operators, though, toting up a win can be even more complicated. “Do you want a highly engaged audience that is small?” Young said. “Do you want a larger audience that isn’t necessarily that engaged? What value do you bring to that broader OTT environment?”
  • Use the buddy system. The Great Re-Bundling is coming, but isn’t really here yet. But trust me, it’s not that far away. Tightly focused services with good data about their clearly delineated audiences will be valuable, and find lots of potential partners. AT&T‘s Crunchyroll, which is part of VRV and serves 2 million paying subscribers the best of Japanese animation, is a good example. “They don’t go everywhere,” Young said. “But the engaged audience is equally as valuable. You think about moving [into] the era beyond this one, and people are bundling [niche services together]. They now have a highly valuable audience that can be bundled with other things and bring more value into that space.”

None of these tactics is a solution by itself. Given the cavalry charge of competition, even all of them together may not sustain some small services currently in the market.

But it can be done. The panelists pointed to DogTV, the 10-year-old streaming site for, I do not joke, dogs left alone by their owners. Those owners pay $9.99 a month for programming designed to keep their pets engaged and not chewing up the furniture. DogTV’s longevity and focus suggest the company has figured something out about surviving.

“It’s quite niche, and people are paying a premium to watch it,” Schwartz said. “I don’t think they could ever go against a Netflix — and they don’t have to.”

If you’d like to hear all of my Future of TV conference panel on getting subscribers into VOD services, with Valassis Digital’s Pamela Young, J.D. Power’s Ian Greenblatt and Kaltura’s Ronit Schwartz, go to this episode of my podcast Bloom in Tech. In the same podcast episode (and conference), I also sat down with Christian Kurz, Viacom’s SVP of Global Consumer Insights, about the company’s new “Power in Progress” report on the changing face of power, and the new roles it creates for brands and marketers.

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