READ MORE: Media Trends and Predictions 2022 (Kantar)
Platform aggregators are on the march, consumers seems to want one gateway to rule them all and the cost of content will inflate further, according to market analyst Kantar.
It also questions whether media planners need to plan for the metaverse.
In its Media Trends and Predictions 2022 report the agency calls out what it terms ‘the paradox of choice’ with payTV broadcasters finding themselves in the surprisingly healthy position to capitalize.
“Although market choice is a good thing, too much can have the unfortunate effect of paralysing consumers (and advertisers) into making no choice at all. We might even, ironically, swing full-circle and arrive back at the platform operator era, with one provider acting as gatekeeper to multiple channels.”
Kantar warns that if channels and platforms fight for viewers independently, it will make the struggle much harder. “Certainly in the near future we would expect to see different streaming players band together to create promotions and bundles, or partner with telco operators.”
It outlines the argument further: With the number of SVOD launches on the rise, smaller services don’t feel confident enough to go it alone, and an increasing number are partnering with established cable and satellite TV operators to secure guaranteed subscribers at launch. Viewers are on board with this trend and want to be able to access their content through one unified system.”
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This dynamic has given a new-found confidence to broadcasters and operators previously under pressure to maintain growth. Many are also looking to merge and partner overlapping ecosystems.
For example, Sky has signed up Peacock, Paramount and Discovery+ as part of its launch strategies, cementing its power in Europe; the planned M6 and TF1 merger in France could create a major new media group; Brazil’s Globo partnered with Google Cloud to bolster its technology infrastructure; and the UK’s Channel 4 tie-up with Amazon Prime to show Brit tennis star Emma Raducanu’s US Open final live on broadcast TV. Interestingly, the overwhelming majority (97%) of the viewing was on Channel 4, with a peak of 9.2 million viewers, found Kantar.
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All this leads Kantar to suggest that the subscription model is losing its power to drive long-term growth.
“This is because competition has grown incredibly fierce, there’s more competition for the same content, and prices are increasing amongst some SVOD platforms. In response, expect business models to diversify further in 2022, with a sole subscription offering becoming scarce.”
Kantar thinks SVODs need to up their audience measurement metric tactics (ideally with Kantar of course).
“The largest SVOD businesses now require much more than their own data and the sheer will to grow; they need a definitive picture of audience behavior that allows them to look ‘over the wall’ for a complete view. How else can they truly understand their competitors, identify blind spots or find new subscribers?”
This becomes more imperative now that more VOD content is being married with TV views from established ratings agencies like Barb in the UK (for whom Kantar work and helped devise and count VOD viewing figures).
“The outcome should supply those subscribing with a unique competitive advantage that’s likely to give them the upper hand and help influence strategic, audience and content decisions. Time, then, for SVOD platforms to reappraise the value of people, not device-based measurement alone?”
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This also means that as “actual viewing figures” become publicly available, content owners and producers could command higher licensing and carriage fee negotiation rights than before.
That could inflate content costs which are already at record levels. Spend on film and TV content, reached $220 billion globally last year, Kantar calculates.
Audiences Are Learning to Accept New Forms of Video
There are two other trends worth noting from the report, as both demonstrate that it’s easy to make incorrect assumptions, and — as the streaming market looks to evolve — they could provide valuable lessons.
“The first is that the rise in short-form video — as evidenced through TikTok’s incredible growth — shows audiences are surprisingly happy to engage with different formats, video lengths and degrees of quality. At the very least, for VOD platforms seeking diversification, this offers a route for experimentation in the quest for new audiences.”
The second lesson is how wrong so many industry commentators were about content. “Previous assumptions that global productions would take over might not pan out. What we see from every global streaming platform is very fast growth in decentralized production.”
A case in point is the biggest hit for Netflix — ever — is a Korean series with subtitles.
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“Instead of global-to-local, the most interesting new trend might just be local-to-global — proving that the video streaming market will continue to surprise and evolve.”
Kantar also has an interesting take on the metaverse: namely, what a media plan for a virtual world will look like.
“There will be wide-ranging implications for virtual shopping and product testing, as well as the formation of new and interactive ad formats.
“If the metaverse lives up to the hype we’ll need to understand the size and composition of an entirely new audience segment and develop tools that allow brands to measure their reach and effectiveness, similarly to TV and display advertising.”
Putting the interactions in the metaverse as a component, and in the context of overall media, is something that advertisers will demand, Kantar says.
It also has a warning for brands not to ignore the climate crisis or consumer’s response to change.
“With ambitious targets for net-zero emissions on the cards, and the CEOs of brands such as Unilever and H&M calling for change, marketers will need to focus on sustainability in 2022 and have it hardwired into strategies thereafter. Media plans will no longer just be about reach, frequency and driving results. The carbon footprint will be just as important.”