Embracing Unscripted, Licensing Agreements, More Bang For Their Buck, Streaming Giants Go Back To The Future

How are global streaming platforms evolving as they focus on profits as much as luring new subscribers?

One answer was given at Cannes MipTV trade fair on Monday by a presentation titled ‘What Do Streamers Want?’ In it, Guy Bisson, research director at Ampere Analysis, painted an illuminating picture of the OTT giants’ metamorphosis.

He focused in particular into the rise of unscripted content and the imperative to appeal to a wider, more generalist audience. 

As revealed by Ampere research, global streaming commissions have hit their lowest point in two years, shedding light on the changing dynamics within the industry. Fourth quarter 2022 saw streamer commissions of unscripted content pass 50% for the first time, up to 50.27% from 30.35% in Q4 2019. 

Bisson captured the essence of the streaming evolution, as he told Variety, “once you’re at 80% penetration, you’re effectively serving a generalist audience just by scale. And so your content strategy has to evolve to reflect your increasingly generalist audience.” 

As the streaming market matures, it is incumbent upon platforms to diversify their offerings. The attraction of unscripted, as the session showed, is its measurable ability to hold a core audience over a prolonged period of time as compared to marquee scripted titles. Those prestige shows have huge viewerships in the first weeks but then their popularity wanes. Conversely, unscripted shows, though not as gargantuan at launch, exhibit significantly lower popularity decline over time.

Bisson further emphasised the merits of unscripted formats “that can be easily adapted and quite easily localized across many of the countries that are important.” Such a strategy empowers streamers to captivate a more extensive audience, catering to an array of preferences and at a lower cost compared to scripted.

Another striking observation by Bisson is the notion of streamers licensing original content, a practice that has begun to permeate industry conversations. Bisson pointed out, ”there’s been noises in the market from several [streamers] that they will at least look at licensing some original content that hitherto would not have been that, but no one’s done it as far as I’m aware yet.” It would be a marked departure from their erstwhile strategy of retaining exclusive rights. 

As it stands, exclusivity remains king. It is a long standing trend from pay TV through to streaming that if you are charging people there is an expectation and draw for exclusive content. All major platforms still exceed 70% in terms of exclusive content within their libraries. 

On new trends, Ampere data suggests between 30% and 40% of U.S. households are engaging with an AVOD/FAST platform in any given month. This puts the maturity of the market in the US. .far ahead of any other territory. In terms of their content strategy, 60% of Pluto’s channels are based on a single title, for example “Star Trek,” “CSI,” and “Hell’s Kitchen.” The channels that adopt mixed programming do so with very little, averaging 13 different shows per week “they [AVOD/FAST platforms] are very much about a small amount of programming used repeatedly in a linear format in a streaming environment,” Bisson said. 

Reflecting on the early days of streaming, Bisson underscored the demographic transition from its nascent throes to the present. “When we were in the early days of streaming, there was a massive skew demographically of the people who were watching. They were much much younger, much much wealthier, and much much more into scripted content than the average household,” he recalled. As streaming services permeate the mainstream, it’s no surprise their content strategies must adapt accordingly to embrace this broader spectrum of viewers.

As they mature and mutate into quasi-broadcasters, as the industry at large, the streaming platforms in some ways are going back to the future.  

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