Restoring the cord: How intent can be a lifeline for streaming services?

Riyad Mammadyarov

Strategy Director, New York

Whether it’s the proliferation of AI technologies in Hollywood or the democratization of moviemaking and distribution of those movies, the entertainment and media industry has gone through seismic upheavals over the last decade. Upheavals that are set to continue to impact the category, pushing it to contract and evolve, particularly within the streaming business.

We have seen ongoing consolidation of streaming services over the last few years due to continued cord cutting, the shrinking margins of media content creation, and the souring of VC-subsidized capital injections that propped up tech and entertainment companies for years.

What we are left with at this point in time are mainstream streaming services that increasingly cater to the masses in a shotgun-spread kind of approach to satisfy users and reduce the ever-frightening churn.

Indeed, the biggest pain point for most streaming services is churn, which is the metric that measures the percentage of streaming services who cancel their subscription or allow it to lapse. A high churn rate is in many ways the death rattle that so many subscription-based streaming services fear and what prompted Netflix and others of its size to begin exploring and implementing new practices like price hikes and ad-supported tiering. It ultimately stymied the economic wound for the big brands but at what cost to consumer sentiment? Implementing brand moves that are abhorred by your customer base is one way to alienate them and erode the long-term value of your brand. It’s understandably a move that is necessitated by larger macroeconomic needs of the company and category at large, but one that is a risky proposition as long-term brand equity is critical to continued growth and consistent user relevancy. As a result, there appears to be a significant opportunity that other niche media brands have discovered. That they don’t need an army of talent, the latest technology, and eye-watering budgets to succeed. Instead, they’re recognizing that their smaller more nuanced content can live standalone on their own streaming services, appealing and attracting a dedicated user base that eventually can grow to become super fans and evangelize the brand to others who are looking for similar content.

It only takes looking at the increasingly potent business success of the smaller streaming services like Criterion Channel, Shudder, AMC+, BritBox and others to see that these brands have recognized something that the behemoths have not—that audiences’ tastes and behaviors are more sophisticated than many have expected. These genre-specific or traditional cable network players have seen sizeable subscriber growth over the last few years, with 24.5 million in 2022 subscribing to at least one niche streamer to more than double to 51.4 million by 2024, according to Antenna, a subscription research firm. As Antenna’s CEO puts it, “it’s an explosion.”

To put that growth into more context with the bigger players, active subscriptions for niche streamers grew 27% last year and 20% this year. These growth rates were nearly 2 times less for traditional streamers which stood at 17% in 2023 and 7% this year. These niche players are therefore a testament to the fact that intent—intent to meet audience’ true entertainment needs—is a driving force behind their success and an approach that bigger streaming brands could learn from. Brands that set out to achieve their ambitions with intent are poised to be attract smaller but more dedicated users by virtue of reflecting a stronger sense of authenticity and relevance to consumers. Putting bigger picture economic and inflationary concerns aside, these brands’ exposure to churn is reduced, as users celebrate the content that these services provide. Beyond that, many of them provide a bespoke curated approach that signals the intent of their business to meet consumer expectations and provide a sense of personalization to their content. That intent is a foundational catalyst that bigger players would be wise to heed as the landscape continues to grow ever complex.