This week brought more eyebrow-raising indicators of just how quickly streaming is growing — particularly now that ad-supported streaming services are taking off.
Exhibit 1: Parks Associates released research showing that 82% of 10,000 broadband households tracked now have at least one OTT video service subscription — up from 76% in Q1 2020 and 64% in Q1 2018.
Further, 46% of U.S. broadband households now have four or more OTT services.
Exhibit 2: Andy Forssell, executive vice president-general manager of HBO Max, declared that, with ad-supported versions of premium streamers now emerging, the U.S. “should get back to 100 million-plus homes” — the number served during heyday of cable TV.
Currently, cable and other pay-TV households number about 80 million.
Netflix, which has 74.4 million U.S. subscribers, is “probably defining the ceiling on what full penetration in the U.S. market is and they're riding that up,” he said. “They are propelling that wave along with the rest of us.”
advertisement
advertisement
According to Forssell, while HBO Max is growing rapidly, WarnerMedia is less concerned about growth speed than achieving grow in the most “premium” way possible.
There’s no arguing with that philosophy, or at least there shouldn’t be. Presumably, he’s referring to achieving a balance that maximizes uptake for the premium, no-ads version of Max, as well as keeps the price/value proposition of the with-ads tier at a level that drives its sub volume and enables optimizing its advertising rates.
On that front, aside from investing in content, HBO Max’s decision to launch with an ad load of four minutes or fewer per hour — like the five-minute upper limit set by NBCUniversal’s ad-supported Peacock — is the most important move they could have made to maximize signups.
Yes, it's true that even now, many people will put up with quite a bit to get quality content free or at a fairly low cost.
Only after decades of being subjected to endless advertising pods during every hour that they watch most cable TV stations, while at the mercy of frequent price increases — and only when they started to have other options options — did consumers begin cutting the cord in large numbers.
But the lesson is this: They finally did.
I’m well aware that what used to be more or less straightforwardly called “product placement” has become commonplace in media, and that streaming services are trying to use “innovative” ad formats that are less intrusive and/or more “entertaining” or “authentic” than traditional ads to try to grab a few seconds' attention for brands. That’s understandable, of course.
But as I read about things like inserting product pictures/promotions within TV show content on “native canvasses” (like a laptop on a desk), or “layering passive placements on top of the viewer experience,” or inserting product-selling frames over content to achieve a “seamless transition” to an ad pod, or using shows' stars to promote brands without calling them sponsors — all concepts being sold by NBCU across its platforms, including Peacock — I have to admit wondering whether even today, when people become social media influencers by treating themselves like products, we might not be in danger of underestimating the intelligence, or at least savvy about commercialism, of many consumers.
Maybe I’m living in the past, but give me straight-out “sponsored by” declarations at the start and end of a show, and identifiable (but yes, actually relevant and compelling) ad spots for the brand within shows, any day. Do I want the privilege of having to spend my time voting for which ad I'll be exposed to next? Sorry, that's a thumbs down.
If advertisers and media companies (I don’t mean to single out NBCU here) start pushing up those ad loads and/or injecting more and more supposedly “seamless” brand promotions into streaming content, viewers may well accept it for a time. For years, perhaps. But gimmicks are the antithesis of authenticity. They tend to wear on people, and that could undermine the proverbial golden goose of streaming over time. I think it should be a real concern even for free streamers — but particularly for any service charging even a nominal subscription fee. And gimmicks in "premium," supposedly ad-free streamers are likely to build resentment fast, in my view.
Just sayin'.