As this summer’s return of “Veronica Mars” on Hulu looms, Chief Strategy Officer Brad Berens wonders how many all-you-can-eat streaming services a person can have and explores a more satisfying model.
_______________________________________________________________________________________
By Brad Berens
On July 26th, “Veronica Mars” will return for a fourth season, twelve years after the end of the third and five years after a movie that had a slender theatrical release. Instead of UPN or the CW, which broadcast the first three seasons, the fourth will premiere on streaming service Hulu for a short, eight-episode run.
I adored the first three seasons, and I loved the movie, so I’m all in for VM.
My plan: I will subscribe to Hulu for those eight weeks, after which I will cancel. During those eight weeks, I plan to cancel my Netflix subscription… unless I face an angry mob in the shape of my teenagers.
Hulu doesn’t want me to subscribe for just eight weeks. The service will only make $35.97 from me because the ad-free subscription costs $11.99 per month, and they’ve stretched Veronica Mars across July, August, and September.
What Hulu does want is for me to subscribe, watch Veronica Mars, and then fall in love (or at least some serious like) with enough other Hulu content that I won’t bother to cancel the subscription. Or they simply want me to forget to cancel because I’m not paying attention.
But how many all-I-can-eat streaming subscriptions do I really need or can I really afford?
I’m not getting rid of Amazon Prime because that comes with a lot of other benefits, like rapid shipping. I may get rid of Starz, but Comcast sells me a pretty good bundle that includes it, so I probably won’t bother. I have access to HBO (somewhat awkwardly through a DIRECTV app) because I’m an AT&T wireless customer.
_________________________________________________________________________________________________
Today, streaming video services build their revenue models around their customers laziness and forgetfulness. Wouldn’t it be better to build revenue models around loyalty and passion?
_________________________________________________________________________________________________
I got a great deal on DC Universe during the holidays because my son and I are devoted to a show called “Young Justice.” I’m a life-long Star Trek fan (so long that I remember when they called us “Trekkies” rather than “Trekkers”), so CBS All Access will stay in rotation so long as a Star Trek show is on, and they’re launching several.
That leaves Netflix, which usually has OK-level content but nothing I can’t live without. I’ll trade Netflix for Hulu, then after Veronica Mars ends I’ll make a tough decision before this dilemma confronts me again when Disney+ launches in November and I have to juggle Netflix, Hulu, and Disney+.
This is too much work. There’s got to be a better way.
Current streaming video models
Over the past two years, Center director Jeffrey Cole and I have each written several columns about different aspects of streaming video: why the studios want Netflix to die, why making a head-to-head comparison between Disney’s new service and Netflix is logically flawed, why Amazon launched a free, ad-supported streaming service on top of Prime, and more.
This time, I want to dig into whether there’s potential for a different model for streaming video, and, if so, what that would mean.
Here are the current streaming video models:
Premium, unlimited streaming, no ads, with a monthly fee: this includes Netflix, Amazon Prime Video,* the different streaming versions of premium cable (HBO, Showtime, Starz, et cetera), DC Universe, and the forthcoming Disney+.
Premium, unlimited streaming, optional ads, with a monthly fee: this includes Hulu, YouTube TV, and CBS All Access, where you can pay a little for ad-supported video or a bit more to opt out of seeing ads altogether.
Unlimited streaming, ad supported streams, no monthly fee: this includes Amazon’s IMDB Free Dive, some parts of Walmart’s VUDU, the Roku Channel, and the forthcoming NBC streaming service.
Pay per view rental or purchase from Amazon, Apple, Comcast, Xbox, etc: you pay to rent or buy individual movie titles, television episodes, or seasons.
With the premium, ad-free services, the bet that we subscribers make is that during the subscription period (whether it’s a month or a year) we’ll watch enough shows to justify the money.
_________________________________________________________________________________________________
Hulu wants me to subscribe, watch Veronica Mars, and then fall in love (or at least some serious like) with enough other Hulu content that I won’t bother to cancel the subscription. Or they simply want me to forget to cancel because I’m not paying attention. But how many all-I-can-eat streaming subscriptions do I really need or can I really afford?
_________________________________________________________________________________________________
A better model: try before you buy
Rather than all-you-can-eat, one day soon a clever streaming service will start offering extended samples of individual episodes or movies. By extended I mean at least 50% of the show. This is a bolder version of what Amazon and Apple each do with their digital book platforms: you can download the first few chapters for free and really dig in before making the decision to buy.
Here’s how it would work with streaming video. Instead of subscribing for a month at Hulu, I’d establish an account and then start watching the first episode of Veronica Mars, season four, which is probably around 42 minutes long, not including credits.
At the 21-minute mark, ideally where a commercial break would come, the show would pause, whereupon Hulu would provide me, the viewer, with three options:
-
- Pay $1.50 to watch the rest of the show, ad free.
- Pay $0.75 to watch the rest of the show, ad supported.
- Pay $0.25, but engage deeply with content created by one of a few advertisers where the commercial breaks go. (This would be a survey, a longform video, creating something in one of my social media accounts.)**
Let’s say I watch four more Veronica Mars episodes ad-free at $1.50 a pop that month. That’s $6.00. If I then watch four more ad-free episodes of some other show, then at that point Hulu would message me that I have unlocked unlimited free access to all of their content for the rest of the month. Then, at the beginning of the next month, the cycle would start again.
If it happened this way, then when I got that message from Hulu that I had exceeded the $11.99 mark it would feel like a reward, a bonus, rather than a guilt-inducing question about whether I’d watched enough to warrant the monthly price tag.
This model would allow viewers to manage their budgets while still watching the shows they care about.
It would allow services like Netflix and Hulu and Disney+ and AT&T to build their own advertising campaigns around individual shows that would drive loyal and satisfied audiences rather than the current marketing where they each sell an overwhelming and unsatisfying video cornucopia.
And it would allow advertisers to build immersive experiences for people who will stick around to engage with them, making explicit the attention-for-entertainment bargain that sometimes gets lost in our overfull video landscape.
Today, streaming video services build their revenue models around their customers laziness and forgetfulness. Wouldn’t it be better to build revenue models around loyalty and passion?
__________
Brad Berens is the Center’s Chief Strategy Officer. He is also principal at Big Digital Idea Consulting.
* Amazon Prime Video does feature some pre-roll promotions for its other content and live sports, but not ads paid for by other companies.
** Hulu will make the most money on the middle option, which is why the price tags for #1 and #3 are calibrated to drive viewers towards the middle; this is classic service provider marketing strategy, which you’ll now notice the next time you visit a gas station to fill your tank.
____________
See all columns from the Center.
May 29, 2019