State of Streaming Snapshot: Pinpointing Streaming’s Pricing Pain Points
对于一个20多年来一直以快速增长而自豪的行业——无论是在技术方面，还是在订户和观众数量上——最近业内关于快速上升的交付成本的讨论是一颗难以下咽的药丸. Our research, in conjunction with Help Me Stream Research Foundation and longterm State of Streaming survey sponsor Tulix, shows that delivery costs are only one pricing pain point across the streaming industry.
Background
From the outset of the twice-per-year StreamingMedia.com State of Streaming surveys—the first survey report was released in early 2020, based on initial responses from late 2019—we’ve always asked respondents to rank their business and technology concerns.
These responses had been relatively consistent, but based on feedback to the Spring 2023 edition of the State of Streaming report—first presented as the Research Keynote in Boston at Streaming Media East 2023—we expanded the most recent survey to include questions around pricing pain points within the streaming media industry.
While the survey is still live—you can take the survey here—and the final results will be presented at a Research Keynote for Streaming Media Connect on November 14, 2023, we wanted to provide a sneak peak at several consistent patterns have emerged around pricing in four main pain points: CapEx, consumer, content, and content delivery.
Please note that respondents aren’t required to identify themselves, unless they provide an email address to enter a prize drawing (in this case, winners receive one of two prizes: an Apple Watch or a $100 Amazon gift card). As such, we can’t share any identifiable details in the quotes throughout this article. 尽管如此，我们还是希望这些引言能够在一个同样能够在内容上投入大量资金并试图超越或超越的行业中引起共鸣, in recent days, at least shore up—revenue models.
CapEx
In the first two years, 受访者对运营支出(OpEx)表示了显著且持续的担忧，而对资本支出(CapEx)几乎没有任何担忧。. To a certain extent, this was to be expected: With the growth of streaming rising rapidly throughout 2020, in no small part thanks to the extended lockdown and work-from-home scenarios that played out across North America and Europe, a greater percentage of the general population was embracing streaming in all its forms, from on-demand subscriptions to live breaking-news or live sports streams, the latter often buoyed by advertising revenue.
在这一阶段，大大小小的流媒体行业公司争相迅速扩大内容和交付供应，以满足消费者的需求, many turned to cloud-based media platforms or traditional content delivery networks (CDNs). 与创建内部内容交付平台所需的巨额资本支出相比，这两种选择的前期成本都较低, it was clear even in late 2020 that OpEx costs might rise to an unsustainable level.
To be fair, though, even for companies that initially considered going the CapEx route, 建立内部解决方案的现实常常受到供应链瓶颈的阻碍，这可能会使扩大规模的时间延迟两位数.
Starting in the mid-2022 timeframe and continuing over the past three State of Streaming surveys, however, we’ve seen indications that CapEx concerns are rising across the board.
At the Streaming Media West 2022 research keynote, where Help Me Stream Research Foundation’s Tim Siglin presented his analysis of the survey’s responses, alongside sponsor Tulix Systems, CapEx was a key topic. At the time, Siglin noted, “The rise of CapEx concerns stemmed mainly from newer OTT providers that, having been successful at launching their nascent streaming service, were now shifting away from higher OpEx expenses to a less costly approach that included building out their own infrastructure.”
By the Spring 2023 Research Keynote, CapEx had replaced OpEx as the top-ranked business concern, followed closely by concerns around revenue generation, 西格林指出，这些较新的OTT提供商很可能“从云服务提供商那里收到了高于预期的账单”，他们正在利用初始收入转向建设自己的基础设施.
Here in late 2023, that trend continues, with one respondent to the State of Streaming Autumn 2023 survey 他指出，他们的主要定价难点是“平衡销售增长与资本和运营费用”，而另一家公司则表示，“我们的主要问题是获得创造资金。, build, and maintain an infrastructure dedicated to streaming.”
所有这一切的另一个问题是，需要与“购买和更新技术资产”保持同步，同时还要实现“在提供高可靠性的同时降低技术成本”的内容交付目标, which we’ll cover in a subsequent section.
Consumer Pricing Strategies
我们看到的另一个关于定价痛点的传闻和定量证据是消费者订阅视频点播(VOD)内容库的成本.
On one end of the VOD spectrum is what we call AVOD or advertising-supported VOD content. AVOD comes in varying flavors, 从收视率领先的YouTube使用的经典广告支持的预播放和插播方式，到最新的免费广告支持流媒体电视(FAST)，包括实时线性在线“广播”OTT.
On the advertising front, there’s a consistent thread through the pricing pain point responses in our State of Streaming Autumn 2023 survey, 强调了基于广告的收入的缺点:缺乏高质量的广告来填补由AVOD的扩散所产生的所有广告时段.
One respondent said “ad fill” was their greatest concern, noting that there are “fewer ad dollars to go around,” while another simply stated, “We need more advertisers."
Despite the fact that most viewers may feel that there are too many ads played in the middle of their streaming viewership, respondents to the State of Streaming survey argued that more advertising is needed.
“Platforms also limit ad time,” wrote one respondent. “We offer 12 minutes per hour, which challenges our ability to monetize and sustain our channel’s visibility.”
Another respondent called out revenue limitations around ad blockers “posing another challenge that affects both short & long videos & also articles without videos” while adding that “advertising partners should be taking this into consideration.”
An additional respondent said their greater challenges converged around “unsteady revenue from advertising and unpredictable viewership,” adding that they’re looking at the model of subscription video on-demand (SVOD) to remedy the shortfall in advertising revenue.
We’ll explore a bit more about FAST issues under the content delivery section, but it bears noting that there’s a bit of irony and cross-purposes on the AVOD and SVOD fronts, with FAST solutions moving towards SVOD, while many of the primary SVOD providers—from Amazon to Disney to Netflix to YouTube, 与其他一些不太知名的SVOD平台一起，他们正在以一种Hulu在几年前被嘲笑的方式，在他们的低价层添加广告.
Even for live events, which were often a staple of premium ads, there’s a move towards subscriptions, although it seems to be as much a technical issue as a revenue one. A respondent noted that it’s “hard to insert ads in live news streams so we use subscriptions.”
At least three leaders in the SVOD premium over-the-top (OTT) content—Apple, Disney, and Netflix—raised rates recently, and their historical price increases are far outpacing inflation.
For instance, the cost of a monthly premium ad-free Netflix SVOD subscription in the US is now more than 65% higher than it was in early 2019. The company also replaced its Basic subscription tier with an advertising-based tier it calls “Standard with Ads” in April 2023.).
Below we lay out Netflix price increases for Basic, Standard, and Premium plans from mid-2019 to October 2023.
- January 2019: Basic $7.99, Standard $10.99, Premium $13.99)
- May 2018: Basic $8.99, Standard $12.99, Premium $15.99
- October 2020: Basic $8.99, Standard $13.99, Premium $17.99
- January 2022: Basic $9.99, Standard $15.49, Premium $19.99
- April 2023: Basic disappears, replaced by “Standard with Ads”
- October 2023: Standard with Ads $11.99, Standard $15.49, Premium $22.99
在Netflix最近一次提价之前，该公司刚刚宣布，由于打击密码共享，该公司在2023年第二季度的订户数量大幅增加(本季度增加了900万), while at the same time decreasing its original content spend from $19 billion to $13 billion for the year, due in large part to the writers’ strike that ended after 148 days on September 2023. (The SAG-AFTRA strike stood at 105 days at the time this article was posted, with official talks between guild leaders and the studios ongoing.)
Apple has an even greater percentage rise for its Apple TV Plus (+) OTT service. Launched in 2019 at $4.99 per month, the monthly price rose to $6.99 in October 2022 and shot up to $9.99 in October 2023. For those keeping track, that’s at 43% in one year’s time and over 100% increase since 2019.
With prices rising across the board for consumers, from gas to groceries to going out to eat, the reality of a 65-100% price increase for a single streaming service will likely give consumers pause. And while it may not force viewers to abandon Netflix, compared to possible abandonment of competitive premium OTT offerings, it heightens the need for a way to watch content from various premium OTT platforms in a single location. That brings us back to the bunding discussion that cable cord cutters have been actively looking to avoid.
On the live OTT front, there’s an added concern: the right viewer and programmatic content mix at the proper time. As one respondent wrote, “Getting eyes on the screens at the right times” is a key goal, adding “we just don't have the draw or the appeal to the right crowd sometimes.”
Content Costs
This pricing pain point breaks down into two distinct segments: third-party content licensing and exclusive content creation.
On the content-licensing front, concerns around this pain point were the second highest of any topic, ranging from concerns about franchise fees, licensing, and royalties. Sports topped the list of content licensing types followed by exclusive VOD content.
Speaking of exclusive content, respondents told us they had concerns about what they termed “content freshness,” which included creating or licensing new content. The reason for fresh content is viewer retention and engagement.
On the flip side, respondents also said that the lack of quality content distracts viewers. One respondent said “receiving poor quality creative content” was their number one concern.
Challenges around revenue from exclusive content isn’t necessarily limited to high-end, premium OTT content. Several respondents noted the challenge of “custom content creation for Reality TV and DocuDrama/Documentary” content.
Additional concerns around “fresh” content center on a nebulous mix, with the “taste of audience and geographical and financial status of audience” affecting revenue.
Conversely, there’s some content that while old, appears to be evergreen. Recent examples of legacy content licesning by Netflix includes the NBC show (now owned by Comcast) Suits and the HBO series Band of Brothers that have experienced an uptick in viewership based partly on current events.
Another aspect of custom content that repeatedly was raised as a pain point was the very short shelf life of news.
“As a very local news organization,” one respondent wrote, “getting people's attention to local issues amid all of life's distractions is a challenge.另一位律师表示，“社交媒体平台在新闻内容方面不断变化的算法和政策”限制了它们提供定制内容作为可行收入来源的能力.
A third respondent noted that many news organizations can’t scale their content (and subsequent revenues) beyond a local market. “Our content is hyper-local. Thus we mainly rely on local economy as opposed to national income,” they wrote.
Content Delivery
While the adage is often true that companies pass price increases on to the consumer, as one content delivery company’s executive noted, “The cost of everything from bandwidth to the price of batteries has risen” from last year’s prices.
When even the cloud providers are saying that they’re feeling the pinch of higher prices, with the added wrinkle of higher borrowing rates at a time when they need to be investing in their own infrastructure, it’s little wonder that we’re seeing the consolidation of CDN offerings begin to accelerate.
StackPath was first to the exits on its CDN business on August 24, followed on October 10 by Lumen (formerly CenturyLink formerly Sprint formerly Qwest). In both cases, the companies sold a portion of their customer base to Akamai.
For its part, StackPath noted its path forward is towards edge computing. 该公司表示，它正致力于“成为业界最好的基于互联网边缘的云计算平台”，而不是将时间分散在边缘计算和核心CDN功能上.
“With this decision, StackPath CDN and Highwinds CDN services will cease operations at 12:00 a.m. Central (UTC-6:00) on November 22, 2023,” a press release from StackPath noted, adding that “Akamai Technologies has acquired select StackPath enterprise customer CDN contracts.”
Lumen also stated its goal is to shift focus towards what it calls “cloudifying its network” while dropping CDN services.
“Much of our core work involves simplification of our business," said Lumen’s SVP of Business Development, Bob McCarthy, in an October 10 press release. “出售精选Lumen CDN服务合同使我们能够更加专注于通过云化我们的网络来颠覆电信行业.”
This consolidation may lead to supply chain difficulty for smaller content owners seeking to monetize via FAST or other OTT models. Below are a few examples of pain points around FAST costs that respondents to the State of Streaming Autumn 2023 survey noted.
Calling out the realities that economies of scale provides to larger platforms, 一位受访者表示:“与流媒体FAST频道相关的交付成本非常高，很难在小型平台上达到同等水平.”
Another respondent noted that monetization is a challenge when approaching the household names in OTT service, stating that “larger streamers are less cooperative when it comes to launching channels,” calling out a list of both OTT services and smart TV manufacturers.
或者正如一位受访者在谈到大型OTT平台时简洁地说的那样:“竞争降低了价格，因为它们是全球性的组织.”
Conclusion
是否要提高SVOD或OTT客户的价格，以吸收更高的交付成本，这个问题在当今支离破碎的媒体格局中仍然是一个重大的难题.
Lest we simplify the pricing pain point equation too much, though, we should also note that, besides the four major pricing pain points we’ve touched on here—CapEx, consumer, content, and content delivery—respondents provided feedback on lesser pain points: production costs, labor shortages, and potential money “left on the table” in the slow move online by traditional broadcasters.
All of these pain points share a common theme. As costs increase, 我们预计，该行业将经历一波整合浪潮，这与我们在早期(大约1999-2001年)和大衰退期间(2008年底- 2009年年中)看到的情况没有什么不同。. The major difference this time around, though, is that it likely will be major players consolidating efforts, in much the same way as we’ve seen movie studios and broadcasters integrate their offerings together.
The market opportunity here, if anyone is paying careful attention, 与大客户关系不大，而与那些仍然希望以合理的订阅价格发布内容的OTT和FAST频道关系更大. They can only do this, though, 如果从cdn到OTT纯游戏再到智能电视制造商的发布平台能够在降低整体成本的方法上进行创新，并将节省下来的成本传递给那些拥有利基但忠实观众的新兴内容所有者.
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