Media Archives - Assert Digital Ventures

Your competition is different in the attention economy

February 12, 2021February 12, 2021
by Andy

Many people err in seeing their competition as like offerings. Those are not irrelevant, but, these days, you might be competing with a wide swath of things attempting to get your customer’s attention. Certainly true if you are in the gaming, social and media/entertainment arenas. Reed Hastings (Netflix founder) presciently said that his real competition was not other media offerings but anything grabbing for your idle time. Here’s a good origin article on the man who predicted this.

Stream TV Review: Verizon’s New Streaming Device Is One…

November 18, 2019
by Andy

It is an odd duck but foretells a potential disruptive move in the cable/MSO/content space. This is Verizon Wireless not Verizon Fios who is doing this. This box, combined with their 5G service, is a potential disrupter to the MSO space (older brother Fios included).

MSOs make most of their margin on internet services vs. content. The content side comes from the legacy TV services they run (and are chartered to continue). It always baffled me why they fight cord cutting so hard. They should welcome more network subscribers and be happy to offload the content wars to others (e.g. Netflix, Disney+, NBC/Peacock, Hulu, etc.)

Verizon has an answer to Roku, but it’s not talking much about it: The mobile carrier quietly released a new streaming device this week that promises to bring services like HBO, Hulu and YouTube to your TV. Dubbed Stream TV, the device is a solid streamer based on Google’s Android TV platform, albeit with a few notable omissions. Instead of signing up customers for its expensive Fios TV service, Verizon aims to offer them a cheap and easy way to get to their favorite streaming apps, while hopefully using Verizon’s network for internet access. The carrier is giving Stream TV for free to anyone who subscribes to the company’s new 5G Home Internet service — a service that is for now only available in parts of Houston, Indianapolis, Los Angeles, Sacramento and Chicago.
https://variety.com/2019/digital/news/verizon-stream-tv-review-1203405682/

So maybe the real disruption in the space is not coming from an upstart but a big player who has assets to break the cable company physical lock-in and who’s happy to allow you to stream whatever content you like. Its an odd duck now but affords this future. Now let’s see when 5G comes about and if it can handle this volume.

Why Is Every Streaming Service Using the Same Pricing…

November 18, 2019
by Andy

I’m not sure I’m clear on the author’s thesis here. One size fits all likely is leaving profits on the table as price sensitive customers do not join and the most passionate customers would pay more under a metered system. However, the argument that rolling back to complex wireless style plans does not hold up. Studies have shown too much choice in acquiring a product leads to inaction (aka the “Chinese menu effect”). Wireless carriers amongst others didn’t simplify out of generosity toward their customers. They had enough pricing data to be able to simplify and optimize. Thus, at best, the argument can only be made that these content providers have not yet tested enough to know their price sensitivity and optimal pricing.

A one-price-fits-all strategy fails to acknowledge the simple fact that for any product or service, customers have unique needs and a different willingness to pay.
https://hbr.org/2019/11/why-is-every-streaming-service-using-the-same-pricing-model

Which offers an opportunity to actually test pricing here to see sensitivity. And these pricing tiers could even remain beyond a test but the point is to sub-segment your customers based on need and then target them with different offers (e.g. unlimited kids content vs. all Star Wars vs. one low price for a given series). What Netflix has learned (and thus drives their content strategy) is that to keep subscribers, you only need one proprietary show they are passionate about and can’t get elsewhere which is why they continue to produce hyper-niche content.

It’s odd that with the exception of Disney+, which is offering discounts for a long-term commitment, streaming services typically only offer month-to-month plans. This pricing strategy makes it easy to turn services on and off. (In theory, I could watch all of Succession by subscribing to HBO Max for just one month.) Volume discounts — committing to a period of time — can be employed to reduce customer churn.

https://hbr.org/2002/09/pricing-and-the-psychology-of-consumption

The author should read the HBR article on the psychology of consumption to see that annual lock-in discounts are very often sub-optimal especially for intangible goods (e.g. gym memberships, content). Those need to be reinforced regularly so that customers realize value and keep their subscription as the study in the article describes.