K7 Media

K7 Media

SVODs feeling the squeeze will see an experimental year in streaming

2022 was a year in which the struggles of streaming platforms earned a lot of coverage. Subscriptions are hitting a plateau, costs are rising, competition has grown and a glut of on-demand programming has left audiences punch-drunk and weary. The market conditions that allowed Stranger Things to launch with a seismic splash in 2016 no longer work.

With that in mind, expect to see many of the streaming companies, big and small, breaking away from what’s expected as they search for new ways to get people engaged and – crucially – keep them watching long term.

One of the biggest changes is already underway. Netflix launched its AVOD tier in November 2022 to a tepid response. The $6.99 ad-supported option reportedly accounted for just 9% of new signups that month. That may change though. Rival HBO Max launched its ad-supported tier in 2021 and it now accounts for 21% of new subscribers. Disney+ jumped aboard the AVOD bandwagon in December with a strong show of support from US advertisers but no signup projections as yet.

Getting audiences to warm up to the idea that streaming will look a lot like network television is going to take time, which is no doubt why Netflix – the market leader but also the most vulnerable streamer in terms of financial exposure – will be entering 2023 with a slate of eye-catching format changes. Chris Rock’s next stand-up comedy special for the company, titled Selective Outrage, will be streamed live on 4 March in the hope of focusing audience interest and sparking the old ‘must see TV’ appeal that broadcast networks used to take for granted. If it proves successful, expect a raft of similar programming as well as a shift towards competitive reality shows, which can now take advantage of live voting and other interactive features.

Kaleidoscope (Netflix)

Interaction is another area where dice are being rolled. Netflix already trialled this tech with the ‘Bandersnatch’ episode of Black Mirror, and pushed it even further with the recently released Kaleidoscope (pictured), a heist thriller starring Breaking Bad’s Giancarlo Esposito, in which audiences can follow the action from the viewpoints of different characters.

Will that be enough to keep Netflix atop its throne? Possibly, but we also expect to see simpler shake-ups of the streaming landscape. FAST channels will likely see a surge, as audiences feel the subscription pinch and opt for free options instead. Vice Media is about to launch a news-based FAST channel which will leverage its library of factual content, and this provides an important clue to the appeal of this model in the wake of the SVOD explosion.

Traditional media companies with vast libraries of older content will be quick to serve it up non-stop on rolling FAST channels, and in particular linear networks and stations will be in a very strong position to translate their existing advertising deals and hours of popular material to the BVOD model. Witness the UK’s ITV relaunching its digital hub as ITVX, offering a mixture of showy original drama and beloved classics. More channels will surely follow suit.

Dan Whitehead

Dan Whitehead has been covering TV and video games for over fifteen years, both as an entertainment journalist and as an industry consultant.