The Year Ahead: Our Fearless Predictions For 2021
2021 is here and time for another round of TV[R]EV's Fearless Predictions. Given 2020, we will admit it’s hard to know what to expect in the coming year, but assuming that things return to a degree of normalcy by the fall, here are top ten:
“Streaming Only Households” Takes Off. “Streaming only” is a far more accurate term than “cord cutter”, which is very 2014 as it is. But with nine “Flixes”--multibillion dollar subscription streaming— services up and running, plus numerous FASTs (free ad-supported streaming TV services) and niche players like Crunchyroll and Britbox, viewers will quickly figure out that there is both more programming and better programming available on streaming, all for considerably less money than their current pay TV service.
vMVPDs Will See A Temporary Bump. It seems most US TV viewers don’t like to take any hasty measures, and so vMVPDs, with their month-to-month contracts, will be an attractive baby step for many viewers as they look to move away from the set top box. Add in that the desire to access their favorite regional sports network (RSN) will be the only thing keeping many viewers tied to pay TV at all, the ability to subscribe to vMVPDs on a month-to-month basis (so they can unsubscribe during the off-season) will be seen as an additional plus. We don't expect this to be a long-running trend, but for 2021, it will be many people's first step towards La Vida Streaming.
News Goes Streaming, Especially On The FASTs. News and sports have long been assumed to be the two things keeping viewers tethered to traditional pay TV. But news has already set up shop on streaming platforms and we can expect to see more options open up this year. All of the major national news services have some sort of outlet on streaming: ABC News has Hulu, CBS News has Paramount+, CNN has HBO Max, Fox News has Tubi, and MSNBC and NBC News have Peacock. In addition, we predict that many of these national news services will set up shop on the FASTs this year--this is already starting to happen (witness Tubi's News section) and it would seem to be a win all around, as viewers don’t expect their news to be ad-free and the FASTs can offer viewers a range of news services all in one place, something the Flixes can’t. The fact that right-wing news darling Newsmax is available on many FASTs will likely accelerate this trend too, as the FASTs try and recruit more left and center leaning networks for balance. Add in too, newer streaming-first services like Cheddar and Newsy. Local news will still be tricky: services like Haystack are doing a good job getting news from local broadcasters, but they are just one app and many local broadcasters remain resistant, something we don't see changing any time in the next 12 months.
Addressable Goes Big Time. Addressable TV advertising has been buzzing around in the background for years, but this is the year it will take wings. There are three key factors driving this:
The migrations of viewers to streaming, where all advertising is bought using audience-based targeting. While brands have been hesitant about investing big money in streaming (and confused about terms like “CTV” and “OTT”), they are starting to realize that they now need to follow the eyeballs.
A new cross platform measurement system from iSpot that’s available now, followed by one from Nielsen that’s available in 2022 will help brands feel better about addressable on streaming and linear by providing them with a single consistent rating across both.
Linear addressable will get a boost from the introduction of a new measurement system from Nielsen that adds in ACR and set top box data to provide ratings for situations where multiple advertisers are sharing the same thirty seconds. This will also be a boon to the new linear addressable systems that Nielsen and Project OAR have built.
The Great Rebundling Continues. As consumers move to streaming only viewing, and Flixes and FASTs continue to see massive churn, there will be moves to slow the churn by locking viewers into year-long contracts. We’re already seeing individual services doing it themselves, and Disney is even offering a Hulu-Disney+-ESPN+ bundle that includes Hulu’s vMVPD, Hulu Live TV. Similarly, Apple, Roku and Amazon all have “channel store” options that allow viewers to subscribe to various niche services and Flixes and manage those subscriptions with a single log-in. As the year progresses, we think the channel stores are going to start creating bundles of the services they sell in an attempt to gain access to valuable user data. But that’s just a start. Watch for the MVPDs to start offering some sort of combined broadband-streaming bundles that offer some combination of Flixes and niche services along with faster broadband speeds. Finally, there are independent bundlers, like Paket, that offer both programmers and consumers a way to put together bundles without turning over all their data to an MVPD or device manufacturer, and they too will see growth in a more privacy conscious 2021.
Flixes Struggle To Define Themselves. Two of the Flixes, Disney+ and Discovery+ have distinct brand identities and consumers know exactly what they’ll be getting. And while what exactly is on Amazon Prime (versus IMDbTV) can sometimes be a mystery, consumers know that a subscription will get them free two-day delivery. That leaves the remaining six Flixes, all of which offer high quality dramas and sitcoms along with an array of popular library content. While Netflix and Hulu arguably have an advantage by dint of having been around for many years, there will be a race among the various services to define themselves more clearly to consumers beyond “the one that has The Office” and “the one that has Friends.” This will be an ongoing process that will largely depend on which of their original series take off, but at some point, they are going to need to consciously pick a lane so that they can establish a greater degree of loyalty and reduce churn.
Smart TVs Give Streaming Sticks Some Competition. A key reason Roku and Amazon have flourished is that back in the day, the interfaces on smart TVs were poorly designed, could not be updated and featured a narrow array of app options. As a result, consumers turned to the low-priced streaming sticks and never looked back. But smart TV OEMs saw the error of their ways and began paying attention to their interfaces, making them easy to use and adding in all of the content viewers want, including, in the case of Samsung, VIZIO and LG, their own FASTs. The trick now is to get viewers to realize they don’t need to add that extra device, which is easier said than done, but our bet is that this year, as viewers spend more time streaming, they’ll also start to discover the interface on their smart TVs and give them a shot rather than go out and buy a replacement for a streaming stick that’s past its prime.
FASTs Continue To Boom. There was a reason all of those cable channels that mostly showed reruns existed: sometimes viewers want to watch something that doesn’t require a lot of effort, aka "comfort food TV." Streaming only households can get that from the FASTs, with the addition of a lower ad load, which is why we think they will continue to see more viewers. We also think that more will follow in the footsteps of IMDbTV and The Roku Channel this year and start featuring original content. While Roku’s originals will be courtesy of Quibi, IMDbTv's courtesy of Jeff Bezos' deep pockets, other players will likely invest in low production cost series like quiz and reality shows as a way to give themselves a point of difference.
Networks Develop A Three-Tier System On Streaming. We are already seeing this happening with Peacock, where they have a free service, an ad-supported subscription service and an ad-free subscription service, all at various price points. ViacomCBS is likely to do this too with Pluto and the new Paramount+, and we expect others to follow suit. It’s a setup that makes perfect sense, as the free version allows the network to collect email addresses for both targeting ads and upselling viewers and can also use the FAST to tease their more popular originals in the hopes of getting viewers to subscribe. A three-tier system also gives the ad sales teams more viewers to sell against, as brands can buy across both the free and ad-supported streaming versions.
Linear Enjoys A Comeback On The FASTs. Linear-like channels have been a feature on the FASTs for a while, and the streams can be as broad as “Comedy” and narrow as “Teletubbiess.” (Yes, there is an actual Teletubbies channel.) But smaller cable networks are also moving to set up shot on the FASTs, which basically have the same business models (run ads against library content). As traditional pay TV margins shrink, we will see more of these smaller cable networks migrating to the FASTs in 2021 and more viewers happy to make use of the linear channels on the FASTs as they grow tired of having to choose something every time they turn on the TV. We could even see personalized linear channels, based on the shows a viewer has watched previously and/or the categories they tell the app they want to watch when they set up their personalized feed.
