Telecompetitor Arches

Report: Virtual Pay-TV Providers are Pursuing the Wrong Streaming Strategy

hulu livetvLive streaming, or streaming traditional live channel line-ups as Sling TV and Directv Now do, is not living up to the hype, according to a new live video streaming survey, which found that only 11% of people who stream pay for live content. StreamOn, a new Cogents Report from Market Strategies International, found that demand is not high for virtual pay-TV services, beyond sports and news.

At the same time, companies entering the streaming sector are highlighting their live virtual pay-TV offerings. That’s a contradiction the streaming companies must resolve, according to Greg Mishkin, vice president of research and consulting at Market Strategies.

“TV providers are failing to recognize that the habits and needs of the viewer have dramatically changed, and the old rules of television no longer apply,” Mishkin said in a press release. “TV providers must evaluate and revise the business model to fit the needs of the consumer, because if they don’t they are setting themselves up to fail.”

A related takeaway from the research is that 73% of the population uses streaming services and 29% have downgraded or canceled their traditional TV services. The firm says that the streaming companies that succeed are bypassing traditional pay-TV approaches of featuring broadcast channels, scheduled live programming and programming guides.

The top five streaming companies are Netflix, Amazon Instant Video, Hulu/Hulu Plus, HBO NOW and YouTube Red, researchers said. Mishkin’s take is that the category still is unsettled and that those that figure out the new dimensions of the market will thrive.  “While Netflix has the highest use rate and share of wallet by a long shot and is the provider to beat—there is not a clear winner yet. None of the current providers has cracked the code on what consumers want,” continued Mishkin. “However, the research clearly shows that the strength of the leaders is due to their ability to break free from the old rules of TV.”

One of the new approaches could be creating a tight relationship between live streaming and social media. Kagan, a media research group within S&P Global Market Intelligence, reported in October that Twitter, YouTube TV, Snapchat and Periscope are increasingly attractive platforms for streaming companies promoting their live content.

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