The Powerful Legacy of TV in Today’s Streaming Platforms, According to Frost & Sullivan

Streaming providers are turning their platforms into hybrid services that combine classic streaming with some characteristic aspects of traditional TV.
Several SVOD operators are transitioning to a hybrid monetization model that combines SVOD with advertising video-on-demand (AVOD).
Various streaming operators are now rolling out linear channels intending to offer their users an effortless way to consume streaming and explore new content on their platforms.

More and more people are leaving cable and satellite television (TV) offerings behind and fully embracing streaming alternatives for their daily entertainment. However, the powerful legacy that TV left is undeniably shaping the future of streaming services. In fact, multiple streaming providers are turning their platforms into hybrid services that combine classic streaming with some characteristic aspects of traditional TV. There are four main TV features that streaming operators are adopting and integrating into their platforms.

First is the adoption of advertising. Many streaming services were born as subscription video-on-demand (SVOD) platforms, i.e., their users pay for a monthly or annual license to have unlimited access to a full catalog of content to watch. Nowadays, several SVOD operators are transitioning to a hybrid monetization model that combines SVOD with advertising video-on-demand (AVOD). Ad-supported streaming allows users to access content for free (or for a lower price) in exchange for watching commercials. Just like TV operators employ advertising to generate billions in revenue, streaming services are introducing commercials breaks as a new revenue layer in their business. Additionally, implementing the AVOD format allows streaming providers to reach price-sensitive consumers and regions, as well as offer multiple pricing tiers for their services – a determining factor in the current context of rising inflation.

The second feature that comes from TV is live content. The combination of on-demand and live content is increasingly becoming popular among streaming platforms. Following the recipe of traditional TV, streaming solutions are starting to offer live video content to capture their audience’s attention and engage them more actively with the live streaming of news, sports, reality shows, or events. By combining the two types of formats, streaming platforms offer the best of both worlds: the opportunity to watch video on demand as well as live stream certain types of content.

In third place is the propagation of linear channels. A viewing habit that is highly functional to the linear TV formula is effortless watching, i.e., consuming TV with a predetermined schedule, without the need to decide what to watch each time. For this reason, various streaming operators are now rolling out linear channels intending to offer their users an effortless way to consume streaming and explore new content on their platforms. With 24/7 linear channels as part of their portfolio, streaming services are becoming a true alternative to traditional TV.

Finally, the rise of bundles. The streaming industry is experiencing a proliferation of bundles of multiple streaming platforms as well as streaming offerings with other services such as broadband, TV, or phone plans. Just like TV packages are sold in bundles of multiple channels or services like broadband and home telephone, streaming providers are also exploring and benefiting from bundling. By providing users with a diversified portfolio of content and services, bundled offerings are being adopted to attract new consumers and improve competitive differentiation.

The trend of turning streaming into a service with TV features – either to increase their revenue streams, to make their prices more competitive, or to add further value to their services – is here to stay. No matter if it is a demand from users or if streaming operators are strategically taking advantage of the long success of the TV format, the age of TV is not yet over. And even when that happens, some classic TV features will continue to dominate our daily entertainment.

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