Stream if you want to go faster: how Netflix and friends killed off the TV
When Amazon bought Twitch.tv for $970m last year, it crystallised the fact traditional TV was dead. A new generation has begun consuming content in a very different way
For those not familiar, Twitch is a live-streaming video platform with a focus on video gaming. Users can watch or broadcast content, which is streamed live or made available on demand. The content itself ranges immensely, with viewers able to watch their favourite gamers not only play games but also discuss them as they’re playing. It is a winning formula and a resounding hit with both millennials and Generation X (those aged 17 to 48).
It’s important to remember Twitch’s success is partly down to the platform Justin Kan and Emmett Shear created (formerly Justin.tv), but it would be nothing without the community of gamers, top-quality broadcasters and continued support of the wider gaming industry.
This year, the site announced it was home to more than 1.5 million individual broadcasters, while roughly 100 million unique visitors log on every month. One of the biggest drivers of traffic to the site is the professional gaming scene – more commonly referred to as ‘eSports’ – which in recent years has blossomed into a multibillion-dollar industry. The biggest competitive titles and competitions such as Counter-Strike, League of Legends and Dota 2 (with the last offering a $13m prize pool this year) are all streamed live on Twitch, with all the extra trimmings traditional sports fans have come to expect.
Individual broadcasters on Twitch
Unique visitors to Twitch each month
of US consumers prefer to watch television live
of US consumers binge watch
Twitch’s popularity and its synonymy with gaming meant both Sony’s PlayStation 4 and Microsoft’s Xbox One integrated the service. This has only helped expand the streaming sites already impressive following.
“While gaming continues to be influenced by mobile technology, consoles are expanding in functionality, and, in doing so, are helping to feed the consumption needs of a larger consumer base”, says Gerald Belson, Vice Chairman of Deloitte. “Gaming devices are not just geared to satiate the appetite of avid gamers, but of those who require devices capable of providing a full package of quality entertainment services, coupled with the speeds to deliver them.”
The growth of streaming sites such as Twitch.tv is not unique to the gaming community, but part of a much bigger shift in media consumption habits that is having a profound impact on the revenues of many traditional media companies. This shift was documented in Deloitte’s 2015 Digital Democracy Survey, which looked at the generational preferences of various demographics in the US and revealed some intriguing technological, media and telecommunication consumption trends that have arisen in recent years.
According to the survey, streaming video services have been growing in popularity and are now used by more than 42 percent of American households and are having an impact on viewing habits and the types of content consumed.
“The study reveals that streaming content has overtaken live programming as the viewing method of choice, with 56 percent of consumers now streaming movies and 53 percent streaming television on a monthly basis, as compared to 45 percent of consumers preferring to watch television programmes live”, says the report.
The survey also highlighted a significant rise in binge watching (viewing multiple episodes of a programme one after the other) with around 68 percent of consumers engaging in the practice. “In fact, 31 percent of Americans who binge watch, do so at least once a week, led by trailing millennials [14 to 25], who binge watch more frequently than any other generation at 42 percent”, says the report. “The survey also notes that TV dramas are the most popular television genre to binge watch, commanding 54 percent of binge watchers’ attention; a characteristic more pronounced among females.”
The ability to binge is provided by streaming services such as Netflix. Shows such as the critically acclaimed Breaking Bad are uploaded in their entirety, allowing viewers to watch entire runs in a relatively short space of time.
This is just one of the reasons TV subscription services are being cancelled, with a quarter of trailing millennials having chosen to discontinue their subscriptions in the last 12 months, or admitting to not having had one for more than a year, according to the survey. What’s more, the report showed 16 percent of leading millennials (26 to 31) had done the same.
“Personal viewing experiences and the ability to consume media at your own pace is significantly impacting how US consumers value their content devices and services”, says Belson. “Today, binge watching, and the ability to watch what we want, when we want, and where we want, is an exciting cultural phenomenon that is shifting consumer behaviours and attitudes towards curating an individual experience.”
Consumer habits are changing, but so are their tastes. Bloomberg Business reported those in charge of Amazon Prime Instant Video (the online retailer’s streaming service) had chosen to cut a number of reality shows from a deal it had made with the mass media company Viacom. The reasoning behind the decision was that subscription holders of their service preferred other kinds of content.
In fact, the ratings for many reality shows in the US have been on a steady decline as viewers have grown bored due to oversaturation. Many have instead turned to on-demand shows, such as the Netflix original House of Cards, which has seen a massive jump in viewers according to broadband technology firm Procera. Streaming services have drawn subscribers because of their ability and willingness to do things public channels cannot.
In an op-ed piece for The New York Times, Cenk Uyger, the founder and host of The Young Turks, the largest online news show in the world, wrote: “In the past, newscasts existed in a pool where they competed against one another in a zero sum game. Now, they exist in an ocean of content with nearly unlimited options. That’s a whole new world with new challenges and opportunities.
“But with so many more options you can’t afford to do things the same old way. Network news has been so bland for so long that people assume that’s the only way you can deliver news. That’s not remotely true. You can present the news passionately, engaging the audience much more effectively.
“In the new media world, passionate will beat dispassionate every time. Authenticity is the most important trait for success. Neutral news anchors reading from a prompter reek of inauthenticity.”
The same is true for all content nowadays. The younger generation has grown more accustomed, and therefore relates better, to YouTubers like video game vlogger PewDiePie or Twitch.tv streamers such as KittyPlaysGames. They are growing up watching content that is often not bound by sponsors or advertisers in the same way TV networks are. The real reason people are turning their backs on TV is because it has grown too scared to take risks and become far too safe, all in a bid to protect what precious revenue streams it still has.
Technology has changed the way people consume media, but one thing that never changes is that people will always crave quality content. Netflix and others have been successful not only because they offer a great service at a reasonable price, but because they are willing to take risks with content that cable networks are either unable or simply too afraid to touch.