Why Streaming Now Looks Even More Like Broadcast TV

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As the streaming business model changes from pure SVOD into premium and ad-supported options, the way platforms measure performance also has to change. The shift toward focusing on “time spent” is now underway and involves platforms using tried-and-tested methods from decades of broadcast TV.

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Comparing the major streamers on subscriber numbers alone is too simplistic for advertisers, which are more used to determining the value they assign to a service by time spent.

“Subscriber numbers increasingly look like a vanity metric for a streaming platform,” Tal Chalozin, co-founder and chief technology officer at online ad company Innovid, writes at The Drum. “In AVOD, these are not the most useful numbers for marketers — because not every viewer delivers equal value to either the platform or the advertiser.”

The average household today subscribes to 4.7 streaming services, per data from Kantar. Chalozin suggests that a service will likely have an easier time retaining one viewer who stays engaged for double the time spent by two other viewers — and that that single viewer is likely of higher value to many marketers and campaigns.

As has been predicted for a while, the new streaming TV business is beginning to a lot like the old broadcast TV business. A number of recent studies, including “The Mind of the Modern Subscriber” from Publishers Clearing House, suggest that streaming services need to offer a much broader range of content to beat the competition.

That doesn’t mean adding true crime or anime to the mix, it means bundling in a mix of FAST channels, live sports, esports and gaming and music. Much like a broadcaster has always done.

One way streamers are changing is to offer a wider breadth of content within a platform — to cater to different audiences at different times of the day or week, notes Chalozin. Services can launch new verticals — for example, sports, news, scripted dramas, unscripted programming and kids’ content. Some platforms are creating longer episodes, and more episodes, for their original series.

Another method of adapting is with in-app advertising — which includes the promotion of other content and apps offered by the same streaming provider.

“Historically, TV broadcasters devoted a great deal of advertising time to promos for their own programming, across any channels owned by that particular broadcast company. Streaming services will need to take a cue from that history. The goal is to keep viewers from hitting the home button, and cross-promotion plays an important role in meeting that goal.”

Streaming experts gathered for a round table discussion hosted by The Wrap said they expect the looming recession will push consumers into FAST, “long stereotyped as a haven for a financially struggling Gen Z audience.” As premium services pivot to include ad-supported tiers to offset subscriber churn and slower-than-predicted growth, FAST services like Pluto, Tubi and Amazon’s Freevee are well-positioned to begin including premium content into the mix. Watch the entire conversation in the video below:

Chalozin’s pitch for his own company is that video publishers need engaging and imaginative ad placements to make promotional ads “feel like part of the natural flow” of content.

“They should consider the value of interactive creative formats such as QR codes and product galleries. And they need to understand the power their data holds to help keep viewers engaged through personalized messaging, relevant to factors such as demographic and time of day,” he says.

“In a mature streaming marketplace — and an increasingly ad-supported one — stakeholders need to speak the language of marketers and agencies in order to stand out in a crowded field that will soon become even more crowded.”