With more than one billion people worldwide confined to their homes because of the Covid-19 pandemic, video streaming offers one of the few options for entertainment, levity and an escape—if only briefly.
Like most businesses during this challenging time, video-streaming platforms are currently focused, first and foremost, on ensuring the health and safety of their employees, and second, on adjusting their strategies to best serve customers. Streaming companies are well-positioned because they already deliver their services in the home. But they still have room to adapt to new consumer needs and behaviors in order to bolster their customer connections and outreach and offer stronger respite.
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This is a critical moment for streaming platforms for multiple reasons. Due to the coronavirus crisis, households are consuming more content from streaming services. But recent Bain research indicates that by 2024 consumer demand in the US will max out at three to four streaming services per subscribing household (see Figure 1).
US streaming demand will max out at three to four platforms per subscribing household
This implies only a few players will be able to reach meaningful scale over the long term. That means streaming services are under pressure not only to meet customers’ needs during the crisis, but also to take proactive steps now to put their businesses in a stronger position coming out of it.
We see three major actions video-streaming services can take to accomplish both goals.
Recognizing money is tight for many people right now, video-streaming platforms can offer temporary subscription discounts that boost access to their services. For instance, companies with free and paid tiers can offer short-term upgrades to premium plans, and pay-only providers can offer introductory packages that waive fees. These moves will support consumers during this time of economic uncertainty and build long-term good will.
Pay-per-view purchases are another effective way to serve consumers, particularly those who don’t want to commit to a subscription or view advertisements. Within the pay-per-view model, companies can lower prices for older content and price newer content in line with the value and buzz of a current release. This will give consumers a broad array of options during the crisis and beyond.
Engage consumers with personalized offerings
People are seeking video content that meets the needs of everyone in their household, whether it’s staying informed (local or national news), keeping kids learning and entertained (educational content), or unwinding (reality TV, stand-up comedy, scripted shows). But with so much content available, consumers can feel overwhelmed. Video-streaming companies can help by communicating targeted offerings that illuminate their full value proposition. They can also amplify these messages through social media and other digital channels.
Streaming platforms will have to maintain a steady flow of new content over the coming months and continue improving content recommendations in order to strengthen their long-term relationships with customers. Such personalization efforts can be as simple as sending a note to a customer; or they can be as complex as developing sophisticated content-recommendation engines that analyze aggregate customer data in real time to provide the best experience for individuals.
Adapt content delivery to enhance long-term relationships
With movie theaters closing their doors and sports leagues on hiatus, people are looking for other sources of new video content. Video streaming services can work with studios and their own production divisions to release content ahead of schedule, which will benefit consumers seeking new entertainment.
Some studios have already taken action. For example, Disney released Frozen 2 and Onward on its Disney+ streaming platform earlier than anticipated, and Universal Pictures made recent theatrical releases available to rent ahead of schedule, such as The Hunt, The Invisible Man and Emma. Universal is also releasing Trolls World Tour on streaming services the same day as theaters. Not only do these decisions give consumers early access to content, they also provide content creators with revenue that otherwise would be lost.
As content delivery models are reconsidered, TV programmers can also revisit the typical 12- to 18-month delay for broadcast TV content to arrive on streaming platforms. Creators might consider negotiating to deliver new content on streaming services sooner, perhaps as fast as the day after airing on pay-TV channels.
In addition to offering more recent content, video-streaming services can explore additional formats and viewing options that are particularly relevant in this moment. For example, “add-on” apps are being developed to allow group viewing when participants aren’t in the same room. These new technologies can make streaming even more relevant during social isolation, and they might remain popular after the crisis has passed. Developing and sharing these technologies will help streaming services meet the evolving needs of their customers.
Streaming services have emerged as a primary source of entertainment and a coping mechanism for many people around the world during the Covid-19 pandemic. By taking these three steps, streaming platforms can help customers get through the crisis, build lasting relationships with them and put their businesses in a stronger position for the future.
As the global pandemic deepens and the human cost of Covid-19 rises, the novel coronavirus outbreak is sending shocks through the world economy. But across industries, companies can take action now to protect their employees and customers and minimize the economic damage.
Andre James is a Bain & Company partner and leads the firm’s Media & Entertainment practice both globally and in the Americas. Nicole Magoon is a Bain partner in the Media & Entertainment and Retail practices. Alexandre Mercier is a Bain principal in the Media & Entertainment and Customer Strategy & Marketing practices. Andre and Nicole are based in Los Angeles and Alexandre in New York.