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Breaking through the SVOD burnout barrier

Wired Splash

New online video services face a tough challenge getting burned out, cash-strapped consumers to find and pay for their service. Wired’s new video streaming service could have the answer.

This week nScreenMedia reported on new Ampere Analysis data showing that US and European consumers are beginning to double up online video pay services. The research shows that US SVOD homes have, on average, 2.8 SVOD subscriptions, while in the UK and Germany the average home has two services.

The research also detailed how SVOD customers are spending more money on the services. In the US, the average SVOD home spent $15.60 a month in Q3 2015. By Q1 2018, those same homes are spending $35. The UK SVOD customers increased spending from $10.40 to $18.70 over the same period.

How many online services are too many?

There are signs that consumers may not want to go much beyond three services, at least not for now.

According to Ampere analyst Tony Maroulis, those people “stacking” online video services are also most likely to have pay TV services. In other words, consumers are adding online video service expenses on to already sky-high pay TV subscriptions.

In a survey of millennials from 2017, 57% agreed that there were too many streaming services and 42% said they were already paying too much for them.

Hub Research too much content to watchWith over 200 pay online video services to chose from, video streamers are becoming confused by all the options. In a study from late 2017, Hub Entertainment Research found that 49% agreed with the statement “there are so many TV programs to choose from that it’s hard to know where to start.” In 2014, 42% agreed with the statement. Consumers also feel they are watching fewer shows they like.

So, let’s recap. Consumers are:

  • Spending a lot on the content they already have access to
  • Feel overwhelmed by the choices at their disposal
  • Already feel they are spending too much.

In a situation like this, it’s tough for any pay service to acquire new customers. It also tough for a service to be heard above the noise of services like Netflix and Amazon Prime Video. These two factors make things look bleak for any new online video service. However, there is still an opportunity to make a connection with online audiences.

Wired launches free-ad-supported video service

The simple solution to breaking through the resistance to paying is not to charge at all. The new Wired streaming video channel is taking this approach. Launched on July 1st, the channel is available on Apple TV, Android TV, and Amazon Fire TV. It includes popular videos from Wired.com and the magazine’s YouTube channel, including shows like Autocomplete Interviews, Technique Critique, and Almost Impossible.

Wired also has a strong approach to telling the potential audience about the service. The service has three promotional pluses in its favor:

  • Wired is a very well-known brand
  • The Wired YouTube channel has 2.3 million subscribers
  • Overall, Wired reaches 30 million people each month through wired.com, digital and print editions of the magazine, and social media.

Leveraging these channels should get a sizable audience interested in visiting the new streaming channel.

The only remaining problem for Wired to conquer is content burnout. However, since the service will be marketing directly to an interested audience, many of them should at least give it a try.

Why it matters

There is a limit to the number of pay video services to which consumers will subscribe.

However, that does not mean other services can’t reach consumers at their pay limit.

A service embracing a free-ad-supported model coupled with a strong marketing channel can still find a place in an interested consumer’s online viewing week.


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