In an era dominated by streaming giants like Netflix, Amazon Prime, and Disney+, niche video services are emerging as powerful disruptors in the media landscape. These specialized offerings build their success by catering to unique target audiences based on, for example, content genres, regions, or particular use cases - presenting them with a well-staked out route to differentiating themselves from other players in the market. At this year’s IBC, we had the pleasure of hosting a panel discussion on this topic at our showfloor booth, featuring speakers from Waterbear Network, BBC Studios, Marquee TV, rlaxx TV and myco.io. Discussions centered around the world of niche streaming services, shedding light on their strategies, challenges, and the future of this evolving ecosystem. Here are some of the key takeaways.
FAST (Free Ad-Supported Television) has been a trending topic over the past few years. The business model has emerged as an alternative to traditional linear TV and has gained popularity due to its potential to reach a broader audience and monetize content effectively through advertising.
For niche streaming services, the FAST model has become increasingly important for several reasons. First, these service providers often have limited content libraries and may need help to compete with large players like Netflix or Amazon Prime. By offering FAST channels, they can tap into advertising revenue to supplement their subscription income, making them more profitable and competitive in the market. Secondly, since FAST channels are often free, they natrually attract a broader audience that might be reluctant to pay for a subscription. This helps niche services grow their user base and potentially convert free users into paying subscribers in the longer term. Lastly, as more niche streaming services enter the market, having FAST channels can be a powerful differentiator. It provides a unique selling point and ultimately makes these services more attractive to consumers looking for free content options.
At the same time, it is important to remember that the market for FAST channels is incredibly densely populated, with countless services being launched over the past few years. This means that providers will have to have a strategic plan in place for how to stand out from the FAST channel crowd. During the IBC panel, we discussed how niche service providers can leverage SaaS platforms to keep the total cost of ownership down, enabling them to enter a competitive market while maintaining cost efficiencies. We also discussed the need to properly leverage data to both find and keep a dedicated audience for your FAST channel.
Niche streaming services can provide bundled offers with complimentary services, another service, or even competitors as a strategic move to enhance their value proposition and attract a broader audience. These collaborations can benefit all services involved but, most importantly, the subscribers who gain access to a more comprehensive and customized entertainment experience.
Bundling can be an attractive strategy for smaller services for several reasons. First of all, many niche providers need partnerships to generate sufficient revenue solely from subscriptions. Bundling offers opportunities to tap into additional revenue sources, such as advertising, while still maintaining a subscription model at the core. Moreover, niche platforms often have a loyal, but generally quite small, customer base. Bundling can help retain the so-called “core customers” by offering them additional services that align with their interests while tapping into new audiences and potential new markets. It can also be an effective way to serve regionally relevant needs and user sentiments, offering viewers in a certain location content or business models that are specifically attractive in the local market. During the panel, Hale Mouritz from BBC Studios spoke about how the company’s bundling of BBC Nordics and Nordic+ has enabled them to better serve the digitally savvy user base in Northern Europe, making sure that the company is able to provide both a linear channel and an on-demand service within the same offering.
Niche streaming services can build loyal communities and gather valuable data to be used for personalized content and advertising. These direct relationships also offer independence from third-party platforms, giving smaller providers more control over their operations and destiny. By actively engaging with their audience, niche services are more likely to retain subscribers who strongly connect to the platform and its content. By maintaining a direct feedback loop for audience opinions and suggestions, these companies can be quick to address issues, fix bugs, and continually improve the service so that users keep returning over time.
However, the most important reason to maintain a direct relationship with viewers is the fact that it gives a streaming service complete ownership of the user data it collects, which in turn can be used to drive decision-making and monetization strategies. In contrast, relying on intermediaries may limit data access and slow down the decision-making process. If having access to direct user feedback, niche services can be agile and experiment with different content formats, pricing models, and features based on first-person insights, which allows for greater adaptability and innovation.
The collection of data and users’ concerns about how that data is being leveraged can of course, pose a challenge to niche video service providers. However, as pointed out by Umair Masoom from MyCo during the panel in Amsterdam last month, niche providers are often very good at building loyal communities around their services. And, if users feel that they truly have a stake in the video ecosystem via this community, they will also be less hesitant to give up personal information, making it easier to use this insight to maximize monetization.
In conclusion, the rise of niche streaming services is testament to the changing dynamics of the media world. While giants like Netflix and Amazon Prime still dominate the landscape, these specialized platforms demonstrate immense value in catering to specific audience needs and interests. By utilizing unique monetization strategies, establishing direct relationships with their viewers, and offering specialized content, niche services are not just surviving but flourishing amidst the titans of the industry. Their agility and ability to innovate rapidly based on direct feedback underscores the importance of adaptability in today's media environment. As they continue to differentiate themselves and redefine viewer expectations, niche streaming services stand as a beacon for the power of targeted content and the evolving preferences of today's consumers.
If you are interested in listening to the full panel and learning more about this topic, it is available online here.