Subscription Video Services Are Now Facing A New Challenge — Free Streaming

Over the past decade, the infusion of smart mobile phones and other smart devices into the life of people has been strong. We witnessed a real and sudden shift of focus from traditional TV channels to live streaming channels. While TV channels limited the freedom of access and choice of environment, live streaming through the internet was finding its viewers in millions.

Live streaming has now become a trend among people, from Kindergartner’s whose parents let them watch cartoon shows on YouTube to grandmothers watching spiritual and religious programmes online.

The fact is that there is no going back to the traditional TV experience, given the freedom of choice and a lesser subscription fee. Subscription services have grown, now they seem to be struggling with a new challenge — the free streaming services.

The Subscription services

Streaming services evolved from streaming traditional TV channels to streaming favorite contents of its audiences through a subscription pack. Streaming services are thriving worldwide. Netflix, Hotstar, JIO TV, Hulu, and Amazon Prime Video are some of the best subscription video apps where users can subscribe and watch unlimited content of their choice and ultimately with lesser but selective ads to disturb their focus. The catch is that though some of the contents are provided free of charge, users do have to pay a certain amount to keep them entertained (Sometimes categorized as premium content).

From Subscription To Free Streaming: A New Challenge

The challenge that now shakes the subscription video streaming is the new free streaming services. While subscription services charge an amount from its users for the content they provide, free streaming services are gaining more attention. People are less tolerant of ads, something that all applications, rely on as a lucrative business. But as long as people get to watch their favorite movies or TV shows for free and with some selective ads that are relevant to them, people don’t mind at all.

Recently, Amazon’s IMDB launched a free and ad-supported video streaming channel that features hit movies and TV shows, called Freedive. Unlike subscription video streaming, Freedive users can watch their shows for free and are fully supported by ads. Currently, the service is only available in the US but is soon expected to expand. The Freedive service is available on mobile phones, desktops, and all Amazon Fire TV devices.

It is not just Amazon who is strategizing with the free streaming, Roku, Xumo and Pluto TV are some of the other streaming services who are gaining traction in the free streaming market, providing free ad-supported content to the users.

Reportedly, Roku has now become the fifth-most popular app in terms of reach. Pluto TV  has roughly 10 million monthly active users and Xumo’s viewership has increased by 325% within a year. Telecom companies, like AT&T, are also beginning to offer free services or products for streaming.

The trend towards free streaming is expected to expand as media companies compete against each other.

The Strategy behind the success

One of the most obvious reasons behind the success of free streaming is understanding the price-sensitivity of the users. Users will always go for a cheaper alternative provided they get a not too bad experience.

The popularity behind streaming services has more to do with the expansion in the use of connected TV devices such as streaming dongles and boxes and web-enabled smart TVs. Reportedly, according to a recent eMarketer estimate, there are about 89 million connected TV households in the U.S alone.

Another reason behind the immense popularity of free streaming services is the strategical integration of services into smart televisions. Most of the popular smart TV manufacturers such as Samsung, Vizio, and LG come with integrated free streaming applications. For example, Xumo comes pre-integrated with Samsung, Hisense, Vizio and LG smart TVs.

The Technology Behind The Success

The free streaming services rely more on ads. Unlike long commercials in the traditional tv that often annoys the audiences, the power of data coupled with technology like artificial intelligence enables service providers to show only what is relevant to the user and that it has the highest probability of being a success which has proven to be a more profitable business.

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