Whether they prefer data caps, zero-rating or something in between, Americans are turning increasingly away from pay-TV subscriptions.
This trend is reshaping media consumption. From The New York Times’ focus on digital subscriptions to ESPN pivoting its business model to streaming, most companies vying for your dollars are keeping pace with more flexible consumer technology choices and a shifting industry as well.
That said, not every company is adapting to current consumers. Businesses like Netflix, where you pay a monthly subscription fee but are usually tied to a contract (30 or 60 days), and Hulu, where your selected streaming services are bundled into your TV subscription, provide competing platforms, and are relatively easy to sign up and cancel.
The irony is that companies may still have a legitimate business model, but they are acting as if they are serving the masses. And it’s all going unnoticed.
The New York Times, perhaps one of the greatest examples of a media company attracting subscribers by keeping a level of consumer confusion, cut its price point by 75 percent this week, dropping to $15 a month. It was also clear the plan wasn’t really to build up a customer base. It was to sell print subscriptions to retain the old ones. We are in 2018 and we still don’t have reliable models for both.
Netflix, which cut back on its selection of original programming earlier this year, has done a good job of locking up the select few. And Hulu, once the white horse of cord cutters, has come a long way since then. Hulu has overtaken HBO Go/Now as a provider of premium TV subscription packages, though Hulu had long hoped to directly compete with HBO. Hulu has gained millions of paid subscribers in the last year. It is paying for that success by directing more advertising dollars to Netflix and Hulu, and that’s not even factoring in the streaming services’ part in linear TV.
Altogether, these subscription businesses are flush with data. Netflix knows which of your viewing choices you watch. Hulu knows what you’re watching. And, perhaps most importantly, they know what you like based on your habits.
But here’s the interesting thing: All of that data you collect helps them determine what they should or shouldn’t be spending their dollars on.
This is a good thing in some respects. This means they have access to a lot of new data. Which makes the streamers more valuable as both markets for content and also as ad partners.
There’s also a level of luxury that comes with selling data in this way, and it allows them to target you more effectively with their advertising messages.
Which brings us to Facebook. The company collects some of the same kinds of data for Facebook Live and Instagram Live, as well as advertising. But they don’t publish insights in that data. Facebook has also been turning off autoplay ads in videos.
In many ways, Facebook is a victim of its own success. They were once able to provide rich content to users at a fraction of the cost of what traditional media could, and now they can do it cheaper and more reliably for larger audiences.
But, ironically, this means they can afford to monetize their audiences much better. Their ads are sharable on Facebook, people take photos of their products (or at least try to) and more goods are sold through Facebook commerce. Not to mention the vast number of users now on the platform.
When Facebook has a choice, they go after your eyeballs with bigger and more expensive advertising. And when they didn’t have to worry about creating content, or paying for it in other ways, they went back to treating users and their data as a cost, not an asset. And they treat their advertising differently.
Hulu is a good example here. But now more than ever, the data they collect is just as valuable as the content they produce. If they don’t really understand what you like, that’s a problem.