The coming SVOD-megeddon

Can all these subscription video on demand (SVOD) services succeed? and what does it mean for Data Strategy in entertainment?

Its a question that has been perplexing me for some time, currently there are host of ways to watch TV and movies and in the next 18 months the choices are only going to be become more complex and varied. The market is creating three major groups with a great deal of uncertainty around who is going to succeed. Which in turn is creating implications for Data Strategy and Analytics downsteam..

This is not meant to be a holistic review of the market forces at play, just a primer on some implications that keep me awake at night from a Data Strategy perspective!

The big guys — Netflix, Disney+, Amazon Prime Video, Hulu, WarnerMedia/HBO, NBCU…

This is where the most attention is focused — and rightly so, each major studio/production house is going to have a direct to consumer vehicle, and the behemoth SVOD platforms Netflix and Amazon have been creating top class content for some time now.

The pricing in this group is all over the place, with Hulu (AVOD supported and SVOD), Amazon (Prime based) and Nextflix currently raising pricing. Disney+ has come in at a super lower price that is really potentially disrupting.

2. The (somewhat) Niche players — CBS All Access, Golf TV, ESPN, DC Universe, the list goes on and on!

(great article here outlining the Niche SVOD universe )

These guys pricing points are also all over the place, but generally cheaper than the big guys. Their content is certainly more focused, and as such they either need to ‘layer’ onto other services as additional outlets or target (and retain) their audience in a highly targeted way.

3. The potential content aggregators

This is where things get perhaps the most unclear with giants like Apple making a play to be the new method of distribution for all this content. Equally, Amazon, Roku, Samsung and even the traditional cable operators like Comcast having a role in this part of the market place.

So what are the implications of all this activity — and specifically for Data Strategy?;

No one, and I mean no one knows how this is going to play out for sure. There is lots of great analysis and perspective, but the only constant is the uncertainty of the future. Which in turn makes it very hard to plan for future Data Strategy (amongst everything else!).
Consumer reaction to this myriad of choice and flexibility is likely to be driven by these major factors;

Content they want and can easily find/access.
Price they are willing to pay — and not just for each service, but collectively do these services add up to an amount consumers are willing to keep paying.
A method of access that is multi-screen and mobile when it needs to be and integrated.

3. Churn is inevitible in this landscape — there will no way to escape churn, the best bet would be to embrace it and help consumers on board and off board as they want to. This will allows overall customer liftime value to be retained as much as possible. Accept churn as a reality and start the process of winning the customer back as soon as they indicate they might cancel — or perhaps as soon as they sign up :D!

This means that the customer management strategy needs to be highly responsive to actions and triggers and be fully supported by the models and technology — and frankly the retention tactics — needed to bring customers in and out of their subscriptions seamlessly.

4. The data that these services will create and need to operate is exponentially bigger than anything the media and entertainment industry has ever needed before. From the pretty easy to anticipate use cases around consumer acquisition and retention to the more complex ones around content creation and optimization there is a set of needs that are being figured out in real time. The implications for this will mean more people, better processes and advanced technology in order to deliver against business requirements now and in the future.

5. Forecasting business performance in this complex market place is going to be a critical challenge — not just for marketing and sales, but for finance, distribution and content development. For a long time large media companies have run as well oiled financial super tankers able to predict future financial outcomes pretty well — but this disruption means their forecast models no longer apply which means there is a ton or work to be done to understand and forecast to support the core engine of the business. At the heart of this is an analytical exercise to determine the components of a good and robust forecast. One that will be essential to the foundational running of the business.

6. Consumer identity is essential to the new shape of things. Understanding consumers in a privacy compliant and consumer orientated (preference driven) way is essential. Capturing consumer information with permission from the consumer is essential to being able to personalize, communicate and engage consumers in a world where they have more choices than ever before. Only the organizations that proactively gain permission from their customers to use their data in a positive and altruistic way will be able to enjoy the fruits of all the consumer level data. Otherwise, they will be forced to use anonymous aggregated data in an abstract way.

7. Skills and experience in data will become more and more important at every level of the organizations. Those media companies that can utilize the streams of data and output their advanced data science teams create will have a competitive advantage, but its going to take some re-wiring of the mindset. Its not about having the people to do the analysis — its about having the leaders in place that can use the Data Strategy output.

And…