How are streaming services solving subscriber stagnation?

Streaming industry expert Tal Chalozin grants insight on what the biggest platforms in streaming are planning in order to survive.

Silver television remote control being pressed by thumb with out of focus screen background (Illustrative) (photo credit: INGIMAGE)
Silver television remote control being pressed by thumb with out of focus screen background (Illustrative)
(photo credit: INGIMAGE)

Streaming is the future of content intake, and yet, despite the content broadcasting domination of platforms like Disney+, Netflix and Hulu, these giants are facing a big issue – they’re running out of people willing to subscribe, and they’ll need to adjust if they want to stay on top.

“The shift from linear TV into streaming is as strong as ever, and doesn’t show any signs of decline – roughly a third of television watch time in the United States is happening on streaming platforms,” said Tal Chalozin, CTO and cofounder of Innovid. “That [move to streaming] is happening very, very quickly; but if you look at the monetization, eyeballs and watch time are making the shift faster than money is.”

A 15-year streaming industry veteran, Chalozin has observed the growth and evolution of content streaming since its early moments in 2007, when he cofounded Innovid, an online video ad provider focused on user engagement and interactivity.

The next step for streaming services

Chalozin offered his insight on the next stage of streaming platforms’ evolution: the move to ad-based business in order to solve the looming threat of stagnation.

 Tal Chalozin, CTO and co-founder of Innovid (credit: INNOVID) Tal Chalozin, CTO and co-founder of Innovid (credit: INNOVID)

“There will be a shift to ad-supported streaming, and [away from] subscription-based streaming,” he said, acknowledging that this runs contrary to recent popular opinion.

“If we would have had this conversation maybe a year ago, the general population believed that ad-supported streaming was on the losing side and that a vast majority of streaming would be subscription-based,” he said. “HBO, Netflix, Apple TV, Disney+, Amazon Prime – all of the leading streaming providers are subscription-based alone.”

However, a lot has happened in the past year – including a report that Netflix lost 200,000 users in April, which cast doubt on the efficacy of the exclusively subscription-supported model.

“In like, 2009 to 2014 or so, everything around digital video was perceived as a ‘maybe.’ It wasn't clear if it was going to be a big time spend, and specifically for advertisers, it was never perceived as a replacement for television. In the last four years or so, it became clear that it is."

Tal Chalozin

In June, Netflix announced their plans to run advertisements on their platform to support a cheaper subscription plan. The industry leader will be joined by Disney, HBO and any other company interested in keeping up.

Streaming ads weren’t always the hot commodity they now seem to be. Chalozin recalled the early days of online advertising, when there was still uncertainty around the entire notion of video streaming.

“In like, 2009 to 2014 or so, everything around digital video was perceived as a ‘maybe,’” he said. “It wasn’t clear if it was going to be a big time spend, and specifically for advertisers, it was never perceived as a replacement for television. In the last four years or so, it became clear that it is.”

The replacement of television brings with it the replacement of the old advertising industry. As a notable example, Chalozin referred to a little innovation that YouTube viewers around the world are now well acquainted with: the five-second skip button.

“It changes how you create content. Now you need to persuade or convey your message in five seconds, and keep people from skipping,” he said – certainly a far cry from the half hour infomercials of yore, wherein Billy Mays and his gang of cleaning products could dominate your screen for what felt like an eternity.

Streaming is also reshaping the way that advertisers measure ad success, rather than just keeping track of how many eyeballs they reached.

“More and more marketers are looking for real metrics like ‘how much is my website traffic increasing during the time of an ad,’ ‘how many people downloaded my app,’ ‘how many people added the product to their shopping cart after an ad’ – things like that,” said Chalozin.

While there’s a chance that subscriptions could pick back up and abate streaming platforms’ concerns about stagnation, it may already be too late to put the proverbial genie back in its bottle. Content lovers, of course, will still be able to enjoy an ad-free experience, but they’ll need to ask themselves how much they’d be willing to spend to avoid an endless slew of jingles about some kid’s favorite yogurt.