The entry of new streaming services intensifies competition

The triumph of television began around 65 years ago. Today, the format is facing its greatest challenge.

With the entry of Hollywood corporations into the German streaming market, the competition for the favor of viewers is increasing significantly.

A new study by the Marketing Center Münster of the University of Münster and the management consultancy Roland Berger shows that the first streaming service “Made in Hollywood” is seriously competing with both television broadcasters and other streaming services for viewing time.

The results of a panel survey in which 1.346 people between the ages of 16 and 69 were interviewed both in February shortly before the launch of Disney+ and three months after the launch in June show:

Around 15 percent of respondents have access to the new service around three months after the launch, and more than half of them have taken out a subscription themselves.

Above all, the new competitor from Hollywood, which is only the first in a series of streaming services from entertainment companies, is leading to a redistribution of the "moving image pie": people with access to Disney+ spend an average of 8 percentage points of their time streaming, which corresponds to an increase in streaming time of 31 percent.

This comes at the expense of the television broadcasters, but also of the streaming competition. "For the established streaming providers, the new competition is a double-edged sword," explains Prof. Dr. Thorsten Hennig-Thurau, holder of the chair of Marketing & Media at the Marketing Center of the University of Münster.

"Despite the declining share of viewing time, the results show no significant increase in cancellations three months after market entry. In addition, our results indicate that the new competitor has further increased interest in streaming overall and has encouraged additional viewers to subscribe to the established providers."

The study results also show that of the time respondents spent watching moving images in February 2020, only 39 percent was spent watching traditional linear television.

The majority went to the various streaming formats, including broadcaster media libraries, which can claim 14 percent of the moving image pie. "Overall, however, the results show that German TV companies are still having a hard time in the new competitive environment. That should change," says Niko Herborg, partner at Roland Berger.

It is also becoming clear that the corona pandemic is acting as an accelerator for digital change.

According to the study, both young and older people have broken patterns of behavior and found their way to digital media consumption: viewers aged 50 to 69 have increased their time spent on subscription streaming services by an average of more than 15 percent.

In view of these figures, the streaming offensives of the German broadcasters seem even more urgent: "So far, only a fraction of the investments have gone into formats for the in-house digital platforms. It is high time for a fundamental change of course," says Herborg.

The full study can be found at this link read.

© Photos: William Iven (1), Jens Kreuter (1), Unsplash