Home Newswire Ampere Analysis highlights ‘compounding’ as the key to emerging TV business models

Ampere Analysis highlights ‘compounding’ as the key to emerging TV business models

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Ampere Analysis has outlined the key changes to TV business models as media companies react to the rapid acceleration of streaming uptake. A common denominator for the evolved business models is ‘compounding’, in the sense of combining and adding to.

One example of ‘compounding’ is hybrid monetisation using advertising as well as subscription. “From an industry segment characterised entirely by subscription, the streaming TV market evolved rapidly in 2020. Advertising supported streaming models were embraced widely,” observes the company.

“Then, driven by the studio direct platforms, hybrid models that combine free ad-supported tiers with paid premium tiers became the norm and will certainly continue as a primary market characteristic as we move through 2021 and beyond. This diversification and combination of business models is one aspect that will propel streaming service uptake through a potential ceiling imposed by aggregate subscription spend.”

Ampere Analysis believes we are going to see another form of compounding in the form of bundling. The company explains: “The breadth of choice in the streaming market today means bundling multiple streaming services into packages must be the next step in the evolution of the streaming market.

“This goes beyond simple aggregation on a ‘platform’ like a Roku stick, Sky Q set-top box or Amazon Fire device. The streaming industry has yet to embrace the combining and discounting of packages of streaming services and this form of compounding seems bound to rise to the fore in 2021.”

Meanwhile, the supply chain is compounding. “We’ve already seen the start of this during 2020, with major studios re-structuring to centre their businesses around streaming and direct-to-consumer. The concept of international distribution to prioritise own-platforms for global roll-outs will accelerate throughout 2021,” the analyst firm says.

Then there is compounding in the sense of combining forces to launch joint venture streaming services. Ampere Analysis predicts an acceleration of collaborative services that will allow broadcast channels to retain a competitive edge in the crowded streaming market.

“BritBox and Salto-style joint-venture streaming platforms liberate broadcasters from free-to-air business models and the geographic constraints of a single territory. Expect these models, already common in Europe, to spread widely in 2021,” says the analyst firm.

Finally, the content offer within single streaming platforms is likely to compound further in 2021. “That means non-niche streaming services looking to combine entertainment content, drama, reality, documentary, news, kids and sport in single services will become prevalent. Such services will better meet the demands of the streaming audience.”

Guy Bisson, Research Director at Ampere Analysis, says: “AVOD, studio-direct streaming launches, the strengthening of local and broadcaster-led streaming, and the turbo-boost of Covid-19 have brought the industry to a pivot point that will change the way content creators, distributors and content aggregators, platforms and channels think about streaming in the wider TV market.”

Ampere Analysis has no doubt about the significance of the change we are about to witness. The company says the streaming TV boom “forces a re-engineering of the TV value chain and the strategies for getting TV to the end viewer.” Bisson concludes: “In 2021, compounding is here to stay in every portion of the streaming value chain.”

 

Hear more about new streaming business models at Videoscape Europe

Guy Bisson, Research Director at Ampere Analysis, will discuss ‘compounding’, with a focus on ‘Three nascent streaming business models and their implications for all stakeholders’ at Videoscape Europe on March 25. You can find more details about the event, the agenda and how to register to the free content, here. Videoscape Europe is the thought-leadership event for streaming television.


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