Netflix will announce Tuesday its first quarter results of 19, when we will know for sure if the rise in the price of its subscriptions was a good commercial coup in the short term. At the same time, Disney announced that Disney +, its new streaming service platform, will only cost $ 6.99 / month and that its stock has shot up more than 11% overnight.
This further complicates the debate over the pricing model for streaming services, Disney obscuring Apple, which dominated the technical information cycle for weeks after announcing its competitive OTT streaming services to Netflix, Amazon, Hulu and AppleTV +. With the participation of big names such as Steven Speilberg and Oprah who helped boost Apple's credibility in the increasingly crowded OTT market, Apple has made it clear that they would define, in the words of a leader, "the commitment to tell stories, on every screen of your screen". life. While it may have been tempting to be distracted by the procession of celebrities who have invaded the Steve Jobs Theater, Apple's silence on a subject has become deafening at Twittersphere as everyone began to ask the story. fundamental question that remained unanswered: How is it going to cost? Why do not you share Disney?
Alex Sherman, CNBC reporter, who attended the unveiling in person, tweeted "we had half an hour of actors talking about their shows without clips and no details about the original content of the show. Apple's price or if channel services will be bundled for a discount.The overall atmosphere here is a shock and a slight annoyance among the people sitting around me. "Todd VanDerWerff, spokesperson for Vox, has said that "Apple's new streaming service is still mainly defined by what we do not know."
.The company has chosen not to address details related to price or potential savings Users could achieve by joining other Apple services.What we know is that Apple TV + will be a subscription service without advertising.This announcement has opened an interesting debate on the revenue model – funded by the publi quoted or by subscription – likely to attract a wide audience of consumers.
Apple and Disney's decision to give up advertising contrast with recent reports from the agency. YouTube, owned by Google, which seeks instead to expand its advertising-funded content while losing importance to subscription-based models, as well as to PlutoTV, owned by Viacom, doubling its model completely. free funded by advertising. Google denies the total abandonment of its subscription model, as others have reported later, but it is clear that the largest advertising agency in the world sees an important opportunity to Offer free premium content in an advertising-funded environment.
Compared to ad-supported models and subscription-based revenue, the real question for marketers and content platforms is: "What do consumers want?" . The answer is the same.
To begin with, it is important to set level by stating that the OTT is now a common product and that it is not a niche audience. In partnership with Harris Poll, OpenX conducted a national study on OTT users published this week. This study revealed that the majority of US consumers now broadcast at least one OTT service, with most streamers subscribing on three platforms on average. Within this growing group of banners, the opinions on the preferred billing models are very diverse, which indicates to the platforms a great opportunity to be creative in the monetization of their contents.
The study revealed an almost equal division between those who want to pay a subscription in exchange for zero ads with a slight majority opting for some form of advertising to reduce or eliminate fees d & # 39; subscription. Forty-six percent of consumers prefer a service that costs $ 10 per month without advertising. It is worth noting that the survey also revealed that consumers would be willing to pay up to $ 24 per month for a master subscription, or nearly twice the adjusted Netflix monthly fee for its package on more popular, now at $ 13 a month (instead of $ 12 a month). a clear mobility of rising prices for an ultra-premium supplier in the subscription market. I expect the results announced Tuesday do not report a significant drop in sales due to this increase.
That said, streaming service providers, including Netflix and Apple, may miss the opportunity to launch a multi-tier pricing model. which includes subscription models funded by advertising, discounted and free.
Often, of the 2,002 US consumers who responded to the Harris Poll poll commissioned by OpenX, 54% would choose an ad-supported model; 29% of them prefer a service costing around $ 5 a month with 2 to 3 minutes of ads per hour, while 25% prefer a free service with up to 10 minutes of credit. ads per hour. The clear message is that there is room for multiple models and a "one size fits all" approach (or unique billing models) will likely be replaced by a series of options tailored to consumer preferences. A guide to follow still comes from the national survey of OTT users, which revealed the sweetness of content and costs – what I would call the 15/100 video rule. Consumers are watching about 15 cable TV channels today and, if the price was not a problem, they would be willing to watch 15 different OTT services. For the cost, whether OTT or cable / satellite services, viewers spend about $ 100 a month to access the content they want to watch.
Consumers do not want an unlimited number of choices and do not want to pay for the channels that they do not watch. The diversity of revenue models will increase in step with demand from various OTT service providers. At present, less than five percent of TV advertising revenue goes to OTT channels. As eyes continue to migrate to streaming platforms, OTT advertising funds will follow quickly – and they are expected to exceed the overall growth of all ads by five times in 2019. Investment in content alone will not determine the winners of the OTT market losers. race. Regardless of which platforms benefit from the pricing formula, content portfolio and user experience, leadership in the fast-growing OTT market will ultimately become the market leader.
The opinions expressed in this article are those of the invited author and not necessarily those of Marketing Land. Associated authors are listed here.
About the Author
Dallas Lawrence is currently Head of Communications and Brand at OpenX, the Largest Independent Advertising Market . Prior to joining OpenX, Dallas Lawrence was Communications Manager for Rubicon Project, Head of Global Communications and Government Affairs for Mattel, and Chief Digital Strategist for Burson-Marsteller. For more than a decade in Washington, Dallas served as a Press Attaché at Capitol Hill before joining President Bush's outreach team as part of the President's National Political Initiative. , No Child Left Behind. Dallas would later be deployed to Baghdad in Iraq, on behalf of the White House, to serve as spokesman for the Coalition. Upon his return from Baghdad, Dallas joined the communications team of Secretary Donald H. Rumsfeld, where he was the Pentagon's director of public relations for Rumsfeld and his predecessor, secretary Gates. He has been named both "crisis manager of the year" by PR News and "social media professional of the year". In 2013, PR Week named him one of the 40 most influential PR leaders. Dallas was previously an officer in the US Navy and earned a BA in Political Science from the University of California at Berkeley and an MBA from Johns Hopkins University.