To free or not to free… That is the dilemma that Hollywood execs are struggling with. Thanks to the ballooning costs of streaming prices…
Audiences are opting for free streaming services instead.
And Hollywood is not happy.
How are streamers fighting against their free counterparts…
And how is the streaming industry changing as a whole?
The Rise Of Free Streaming
When streaming first broke out onto our screens and gained traction…
Advertisers worried that the ad-free paywall model would eliminate their presence in front of viewers.
Fast forward to today, and you can’t escape ads seemingly anywhere, much less streaming services. This is partly due to an industry-wide shift that added cheaper, ad-supported tiers to most streamers…
And while this new move has succeeded, major streaming platforms have bigger fish to fry…
AND THAT’S PLATFORMS THAT OFFER STREAMING FOR FREE.
Over the years, free ad-supported TV (aka FASTs) have been popping up as a response to major streamers. Since then, free streaming has been gaining momentum…
Earlier this year, Youtube took over as the first streaming service to claim over 10% of total viewing on TV screens. Nextflix, for comparison, has 8.4%.
What this means is that viewers don’t mind watching some ads while they enjoy their entertainment…
But why are viewers abandoning the major platforms in favor of smaller, free streaming services?
ONE BIG REASON IS STREAMING FATIGUE.
Let’s face it, there’s too many streaming services to choose from.
During the rise of paid streaming platforms, every major film studio wanted a piece of the pie. Following the lead of Netflix and Hulu, Paramount, Disney, and Warner Brothers followed suit with their own platforms…
This rush to create new platforms and TV shows. This became known as the era of Peak TV, reaching its ceiling in 2022, with over 600 new shows created for streamers.
With more competition, these platforms began to increase their prices…
While offering a cheaper, ad-supported tier.
Tough Competition
Even as ad supported tiers succeeded in bringing in new users…
It hasnt been enough to convince fans of free streaming to start paying for the service.
FASTs are still gaining traction…
And the reason is simple…
WHY PAY FOR SOMETHING WHEN YOU COULD GET IT FOR FREE?
Free streaming platforms might have a more limited selection than it’s rivals…
Many viewers enjoy the catalogue of reruns and older series…
Tubi, the largest free streamer, has a selection of over 65,000 TV shows to watch at any moment.
Not to mention…
53% OF FAST USERS HAVE CUT DOWN ON THEIR STREAMING SUBSCRIPTIONS AFTER THEY DISCOVERED FREE STREAMING.
The free streaming business model might not support the latest and hottest new series, but that hasn’t stopped them from gaining new users. This year, FASTs made up 14.8% of TV viewing in July…
Up from 12.5% last year.
Paid streamers, on the other hand, stayed stagnant.
Youtube has been able to keep its dominance as a free streaming platform thanks to its endless supply of user generated content…
Which is paramount for younger audiences.
And Tubi is able to stay ahead thanks to its close attention to social media and keeping up with what its users want. Now, Tubi has achieved the same size as Disney+…
A feat usually unheard of for a free streaming service.
The Future Of Streaming
To get ahead of the curve, other companies are thinking of hopping on the FAST bandwagon…
But with over 2000 ad-free streaming services available now, they might need to play some catch up.
NOT TO MENTION, ITS A BIG SHIFT FROM THE WAY BUSINESS IS DONE NOW…
With the free streaming business model…
Producing original content becomes incredibly difficult when relying solely on ad revenue.
Which means that major streamers will have to find a way to compete with free streaming AND find a way to keep making content…
WHILE GROWING THEIR ORIGINAL CUSTOMER BASE. YIKES.
It seems like that to keep their current success, major streamers are going to have to revolutionize the industry… Again.
Thankfully, Netflix is expanding into the world of immersive events…
As for the rest of the industry… It might be time to reevaluate those price hikes…
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
