Embracing the idea of launching your own D2C streaming service brings a crucial advantage: future-proofing your business.
The rise of streaming has been nothing short of remarkable, outpacing the decline of traditional TV subscriptions. In fact, in 2021, the number of streaming subscriptions in the US exceeded the country's population, with a staggering 340 million subscriptions compared to 330 million people.
With this monumental shift in viewer preferences, legacy media companies find themselves jumping on the streaming bandwagon and rolling out their own direct-to-consumer (D2C) streaming services.
So, should your company follow suit? Absolutely!
Embracing the idea of launching your own D2C streaming service brings a crucial advantage: future-proofing your business.
By providing your own platform, you establish direct connections with both fresh viewers and those who have bid farewell to traditional TV subscriptions — the cord-cutters. The beauty of it is that your company maintains full control over your content, from how it's packaged and marketed to how it's distributed, something that is often relinquished when opting for licencing or wholesaling to third parties.
Moreover, having your own D2C streaming service ensures that viewers are drawn exclusively to your platform, without the distraction of competing content from other providers.
The rewards of being an early adopter in the streaming landscape are boundless. By proactively introducing your own D2C streaming service, you have the potential to attract a vast viewership and foster deep-rooted brand loyalty. Thereby, minimising the risk of losing out to competitors and establishing a strong foothold in the industry.
The D2C distribution advantage
The advantage of adopting a D2C approach extends far beyond future-proofing your business or merely claiming a spot in the streaming realm.
Bypassing middlemen
Say goodbye to any intermediary when you have your own D2C streaming service enabling you to engage with your viewers directly — the pinnacle of content marketing.
By forging direct connections with your viewers you can tap into diverse revenue streams and cultivate a loyal community that becomes a driving force behind your brand's growth and sustainability. It also presents an exceptional marketing channel for upselling opportunities.
Data-led decision-making
One of the remarkable advantages of the D2C model is the ability to collect first-party data directly from your viewers, providing you with a wealth of metrics and insights that are unmatched by any other form of distribution.
By examining viewing patterns and possibly correlating this data with geospatial and demographic information, you gain the power to make informed, data-led decisions. D2C empowers your company to leverage data and make decisions that drive revenue throughout your viewers' streaming lifecycle.
Hybridisation
For media companies that rely on traditional broadcasting, venturing into building their own D2C streaming service doesn't mean abandoning their current core business. You can begin to add D2C distribution, as many legacy media companies have done.
Take Disney, for example, which introduced original content on apps like WATCH Disney Channel to familiarise fans before launching Disney+.
Similarly, Fox provided features such as watchlists, device continuity, and personalised recommendations through its app, Fox Now. This not only provided viewers with an elevated customer experience (CX) but also allowed Fox to gather valuable user data and viewing behaviour to fuel customer acquisition and retention efforts. Furthermore, Fox capitalised on targeted advertising with significantly higher CPM rates.
These legacy media companies, along with several others, continue to generate a significant portion of their revenue from traditional broadcasting while leveraging their streaming platforms to diversify their offerings and attract new viewers through cross-channel consumption. Also, they have a unique opportunity to attract cord-cutters onto their D2C platforms.
In fact, the perceived economic risk of cannibalising traditional TV viewers is minimal, and it may even prove beneficial. According to Discovery's President and CEO, David Zaslav, even if they were to lose a million cable subscribers, acquiring just 650,000 D2C subscribers would result in higher profits.
Insurance
Traditional TV negotiations can often be arduous, leading to disputes and unfortunate channel blackouts. These conflicts typically arise when media companies and distributors cannot come to an agreement on the carriage fee.
In the era of traditional TV, distributors held the upper hand in these negotiations. However, with a D2C streaming service, your company gains a powerful defence against blackouts, thereby balancing the power dynamics.
A prime example of this strategy is Disney, which strategically bundled ESPN+ with its D2C streaming services, Disney+ and Hulu, to boost subscriber numbers and facilitate negotiations surrounding ESPN's carriage fees.
Having your own D2C streaming service acts as a shield against unfair carriage fee negotiations with cable and satellite companies, providing leverage they cannot ignore — as they are well aware that viewers would readily cut the cord if the content they desire is available elsewhere.
Potential D2C transitioning obstacles
Almost no media company is inherently equipped to operate as a technology-focused entity. However, excelling in this space hinges on creating an exceptional and seamless CX.
Embracing the D2C model means delving into uncharted territories, such as technology infrastructure, optimised content distribution, multi-device viewer support, effective customer acquisition, meaningful engagement strategies and much more.
Vendor spaghetti
Navigating the landscape of D2C streaming services often involves dealing with a tangled web of complicated solutions offered by multiple vendors. Media companies find themselves jumping through numerous hoops to ensure their content reaches viewers seamlessly. From content delivery networks to encoding platforms to analytics tools and more, each vendor presents its own set of challenges and integration requirements. Managing this tangled vendor spaghetti can be a daunting task, requiring meticulous coordination and technical prowess to ensure a streamlined viewer experience.
Cap-ex spirals
Venturing into the D2C landscape requires substantial upfront investments, both in terms of finances and time. Creating a robust streaming platform entails significant monetary outlays, including infrastructure development, technology implementation etc. These expenditures are accompanied by a considerable investment of time, as setting up a platform involves numerous intricacies and meticulous planning.
"The CTOs we speak to are tired of using band-aids across multiple vendors. The CEOs we speak to tell us they could feel there was a better way — they just couldn't find it.", says our CEO, Narendra Nag.
Over the past few years, media companies have sidestepped these hurdles and transitioned to D2C by strategically acquiring technology firms. A notable example is Disney's acquisition of BAMTech (now Disney Streaming Services) which empowered Disney to seize control of its content distribution and revenue streams, rather than contributing to the growth of competitors like Netflix. The result was the successful launch of Disney+, their flagship D2C streaming service, which reached an impressive peak of over 164 million subscribers. Similarly, WarnerMedia's acquisition of You.i TV played a pivotal role in the successful launch of HBOMax outside of the US.
However, most media companies lack the leverage and surplus capital to merge with or acquire technology firms.
But there exists an alternative route to enter the D2C space — one that is accessible, highly cost-effective and time-efficient.
Collaborating with a streaming technology platform-as-a-service (PaaS), empowers media companies to leverage the expertise, infrastructure, and resources of their partner. This eliminates the cost and burden of building your own infrastructure or expert streaming team, liberating you from all the technical hassle, leaving you free to focus on content, branding and engaging viewers.
We, at Laminar stand proud as trusted partners for leading media companies and content owners, empowering them to create state-of-the-art, cutting-edge D2C streaming services.
Whether you're embarking on a new D2C venture or expanding your existing service, we have the enterprise-grade scale, resources and support to ensure your success.
With our comprehensive video streaming solutions, you can launch a global streaming service, on all devices — within weeks. Our comprehensive set of out-of-the-box solutions enable you to create a powerful and fully tailored streaming experience without any compromising on design.
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