Streaming wars: The churn problem and what keeps people coming back

The streaming wars were hot even before we were all confined to our sofas, but now the dynamics of the market are becoming clearer; two stories reflect what’s really going on.

Why it matters

Streaming is a volatile business to be in: content is expensive to produce, expensive to acquire, and – in the case of sport – expensive to keep. Competition, especially in the Americas, is now rife. A new service thinks it can carve out a niche and build a convincing competitor built to keep subscribers.

The Spanish language opportunity

The Mexican broadcasting group Grupo Televisa, one of the largest producers of Spanish language content, and US-based Univision will finally merge in a deal first announced last April, creating the firepower through which to launch a new streaming service that will target the world’s 600 million Spanish speakers, Reuters reports.

With a planned release of early 2022 for an ad-funded service and H2 for a subscription tier. It’s a powerful offer, given both its content library and broadcast rights for sports.

Streaming reality

• Those broadcast rights look particularly useful now. Data from Antenna, reported in the Wall Street Journal, appear to show how you need more than just the occasional big hit show or movie to keep the subscribers they bring on board.
• In breath-taking statistics, the research company found that 31% of the users who signed up for HBO Max within three days of Wonder Woman 1984 appearing on the platform, had left within one month.
• A similar pattern followed Disney+’s Hamilton, where around half of the sign-ups around the hit musical were gone within six months. It’s a trend that most of the major streaming platforms experience.

Bottom line

Playing defence means making expensive programming, not just drama and documentaries. This means the difficult, risky stuff like news and expensive content like sport.

The churn problem also reflects how important mixed revenue streams might become for streaming services in future, something TelevisaUnivision is pursuing, likely on the back of others’ experience. 

Sourced from Reuters, WSJ. Image: Pexels