After a busy 2020 and 2021 in which a large number of new paid and ad-supported streaming services debuted in both the US and Europe, the players in the streaming wars are now largely set. In 2022, the focus for these services will be investing in content and refining their user experience as they fight for sign-ups and audience share.
The battle between the gateways to these services – mostly comprised of CTV platforms like Roku, Amazon Fire TV, and Samsung TV, has been given less attention. Perhaps that’s because the wars between the streaming services play out across big-budget, well-advertised original productions, while the streaming gateways compete through less public licensing agreements and carriage deals.
But the gateways’ role in the streaming landscape has been growing – and is set to grow further still in 2022. This growth won’t just come at the expense of their direct competitors, but also at the expense of some of the streaming services they carry.
Crunch time for paid services
Research from Accenture released today outlines a number of consumer frustrations with the CTV world as it is. And the CTV aggregators are by-and-large the best placed businesses to solve these frustrations.
One – which has been very well documented – is the mounting cost of streaming. For years commentators have speculated about when consumers will reach SVOD saturation, where the monthly cost of multiple streaming services grows too large and audiences start to trim their entertainment stacks.
Accenture’s consumer research, which surveyed 6000 consumers in eleven markets, suggested we’re reaching that point. One third of consumers globally said they were planning to cut their spending on media and entertainment either “somewhat” or “greatly” over the next 12 months.
This trend will likely benefit gateway services, which control the visibility of streaming apps within their platforms. If audiences really do cut back on subscriptions, the platforms will be able to influence the winners and losers based on which services get most prominence. Apps are more likely to pay to promote their services within these platforms, to maintain their audience share.
Algorithms falling short
Free ad-supported CTV services will obviously not be hurt by this trend, and would likely stand to gain. But the issues for streaming apps go beyond just cost.
Accenture’s research highlighted two further common issues. One is that consumers say navigating different CTV services is frustrating, and feels like popping in and out of rabbit holes as they search for content. Sixty percent of those surveyed said they find navigation either “a little” or “very” frustrating. And 44 percent said they spend more than six minutes on average trying to find something to watch.
The second issue is that consumers find recommendations on streaming services are inaccurate or incomplete, rendering them ineffective. For example, a user might just happen to have watched two cooking shows on a particular CTV service, and not much else. But then that service’s algorithm might decide that the user is only interested in cooking shows, and mostly recommend cooking programmes, despite the fact that it’s just one of the topics the user is interested in.
Again, aggregators are well placed to solve both these issues. Fifty-eight percent of those surveyed said cross-service search features, like those operated by Roku and Apple TV, are more convenient for finding content than opening up individual streaming apps. Meanwhile 56 percent said they would like to be able to port their user profiles between different services, to enable better personalisation and content recommendation. Aggregators are best equipped to enable this kind of cross-services content recommendation.
Fight back from the streamers?
The aggregators’ gain would be the streaming apps’ loss. As gateways control more content surfacing and recommendation, streaming services must necessarily have less control over these aspects of the user experience – which they’ve invested in heavily.
And as users switch to aggregators’ own search and recommendation tools to find content, those aggregators can use that search data to power their own streaming services (if they own one).
The question is whether streaming services can and will fight back against this trend. The gateways and aggregators have always been frenemies to the streaming services themselves. On the one hand they provide access to audiences. But they also are increasingly asking for fees or slices of ad revenues from streaming apps, and dictating more of the user experience in the CTV space.
We’ve already seen a few carriage deal flare ups between apps and aggregators – notably between Roku and YouTube at the end of last year. We may yet see more as streaming services fight to maintain control over the user experience.
At the same time, competition between the aggregators will likely heat up. New data from Conviva shows how the landscape shifted over the past year – with Roku and Amazon Fire TV both slightly losing share of streaming viewing time on the big screen, due to a mix of new entrants and growing smaller players.
The competition will likely intensify further. Accenture says that any of the current streaming ecosystem players – major SVOD services, access devices and connected TVs, major internet onramps and consumer apps, and even traditional cable operators – could throw their hat in the ring and position themselves as aggregators.
