The Rise of the On-Demand Monster

By Mike Wood
Published on: September 8, 2017

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This article first appeared in March 2017, but it is even more valid 6 months later. For newer subscribers who haven’t rifled and binge-read from the archives, this article from Mike Wood is smart, erudite and well worth a few minutes of your time.

Like Godzilla vs Megalon, music and video streaming are competing for your entertainment dollar, and music is winning.

There’s no doubt that the future of consumer entertainment, be it audio or video, is streaming, but why is music streaming surpassing video streaming? According to Nielsen’s 2016 year-end music report[1], the big winner last year was music streaming, which enjoyed a 76% increase over 2015, to 251 million streams. It’s interesting to note that sales of digital downloads of both songs and albums declined. My preference for purchasing actual CDs seems almost quaint. Then again, with the mild uptick in vinyl sales (mostly to artisanal coffee drinkers with man-buns, and maybe a few audiophiles), I might argue I’m merely ahead of the CD’s inevitable resurgence.

Video streaming has increased as well, though only moderately—it’s up 7.5% to 179 million streams. It might be that Netflix has had a tougher time replacing the cable provider than Spotify has had in replacing the radio. Most video streaming is via YouTube or Facebook[2], however, which likely includes more short-form content. You could blame millennials and their MTV music-video-induced short attention span, except that none of them have seen a music video on MTV. You might instead site the fact that the increased broadband speed—and subsequent extra cost requirements—plus the subscription costs for the video streaming services you need somewhat offset the costs of the cable or satellite provider you might be replacing. Many people are merely supplementing their cable or satellite bill with some on-demand streaming content.

Music streaming has an advantage in that it’s fairly similar to what (us “experienced”) people are used to. In the old days—you know, like the eighties—we changed stations from KROQ to KRQR to WKRP to whatever. Now we’re changing between stations of our favorite artists or genres, which is reasonably similar. We choose the station; the digital disc jockey chooses the tunes. Video streaming, on the other hand, is far less like traditional TV watching. Channel surfing is relatively easy: you sit on the couch, beer in one hand, remote in the other, and press a button on the remote to cycle through pre-selected content. Searching through streaming content is far less linear, and requires more interaction. Which app do you choose, Netflix, Hulu or Amazon? And do you look at “new releases” or “revenge movies”, or maybe the “predictable romcom where two friends/enemies sleep together and fall in love until one realizes the other lied/cheated/wronged them somehow that creates a conflict that ultimately just gets overlooked anyway” category. It can be tiring.

Video streaming also means the death of the water cooler. Nobody watches “Seinfeld” anymore. And yes, normal writing etiquette is to put that in italics, not quotes, but I don’t mean Seinfeld the show, I mean “Seinfeld” as in, the it show that everyone would go to work or school the next day and talk about. Now we say “Hey, did you see OR?”, and your colleague says, “No, I don’t have Netflix. But I did see Shameless, you?”, and you say “Uh, no, I don’t have Showtime. What about Game of Thrones?” and your friend replies “Oh, yeah! For sure. Man, does anyone live on that show?” Spoiler alert—the answer is no.

Video streaming may come around, though, as some options allow users to search content on their phone, which is at least a simpler experience, and only requires the press of a button to send the content to the display. And instead of every network having its own app to search, multi-format providers like DirecTV and Dish Network—via DirecTV Now and SlingTV, respectively, are offering collections of networks that at least help offset some costs. We need to get to a point, however, where we can line up a selection of genres or studios we like and can step through randomly procured content with a single button so we can still drink our beer at the same time.

Until then, video will have a tough time keeping up with audio. There is a third wave of music product being introduced that will continue to propel the growth of audio streaming. The first wave was Bluetooth, where you could connect a single source to a single speaker, and with options from hundreds of manufacturers. Sound quality was often a casualty in the wake of the first wave’s convenience. The second wave was proprietary Wi-Fi systems, most notably exemplified by brands like Sonos. While Sonos has been hugely successful, its exclusivity prevents widespread adoption. Fortunately, there’s a third wave of more-interoperable products coming to challenge them. Google’s Chromecast audio platform, for example, allows consumers to mix and match speakers from higher-end brands at specialty retailers, like RIVA’s WAND series, with products available at mass-market resellers, like VIZIO’s Crave speakers. With this kind of product flexibility and reach, sales are likely to expand, and the growth of audio streaming will increase with it.

There are more than a few advantages to streaming, including access to far more content, and having it available nearly on demand. It does mean we’ll all need better, and cheaper broadband. “Better” so that we can absorb the streaming media across several users and devices.  “Cheaper” in order to justify the increased costs of all the streaming service subscriptions that we’ll have to pay for. For the foreseeable future, it seems music streaming is on the fastest growth trajectory, but video streaming is starting to find its footing, and with the right platform, it could begin to catch up.

[1] http://www.nielsen.com/us/en/insights/reports/2017/2016-music-us-year-end-report.html

[2] http://www.nielsen.com/content/dam/nielsenglobal/eu/docs/pdf/Nielsen-global-video-on-demand.pdf

 

Mike Wood

Mike Wood

Mike provides PR for CE manufacturers at Noyd Communications. He was a magazine editor for Home Theater, Home Theater Buyer’s Guide, Home Theater Interiors and Digital TV and Sound. Previously, he worked for Samsung Electronics as Director of Quality Assurance.

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