Published On: Wed, Feb 14th, 2018

How Media Companies Are Wooing Niche Audiences

The rise of streaming services has been a definite boon for cord-cutters the world over. These arepeople who have chosen to cancel their subscriptions to multichannel subscription television services such as those provided by cable and satellite TV companies, and now subscribe instead to over-the-top (OTT) content providers like Netflix, Hulu, and Amazon Video. These types of companies typically employ the subscription billing model in order to monetize their content.

Niche Audiences

The shift to streaming services offered by OTT content providers is due in no small measure to the meteoric advances in bridging the digital divide. Since the early aughts, hundreds of millions of people gained access to high-speed internet. Today more than half of the world’s population are connected to the internet, up from just around 6 percent in the year 2000. And with developments in data compression technologies also in the early 2000s, the world indeed became poised for a digital future where large video files can be easily streamed online.

Netflix’s Unique Multi-Niche Strategy

In 2017, independent news company The Conversationpublished an article about the successful growth of Netflix into a global OTT media company with over 100 million subscribers worldwide. The author noted that while Netflix doesn’t aim to offer content that caters to just one particular type of audience with a specific interest, what it does is that it provides content to several different audience groups with diverse interests. The author referred to this approach as a “conglomerated niche” strategy.

Whether they are fans of Japanese anime (e.g. Death Note), action series (The Defenders), psychological thrillers (Bates Motel), period dramas (Marco Polo), science fictions (Altered Carbon) or comedy dramas (Orange is the New Black), people get to have unique audience experiences simply because Netflix provides its subscribers with such a vast library of content. As such, while Netflix serves these different audiences simultaneously, it also serves them separately.

The author added that although Netflix is particularly secretive about the way it collects data, what is known is that it does extensively gather audience data, allowing its algorithms to recognize particular patterns of viewer interest, which are then used by the company to determine which kinds of content it has to create or acquire further to encourage its customers to remain subscribed.

The Emergence of Niche OTT Streaming Services

Going in the opposite direction of the Netflix strategy, some media companies are taking charge of their content and are launching their own niche streaming services. In August 2017, for example, Disney announced that it is going to debut its own streaming service in 2019, a platform to rival Netflix, but one that targets people who are interested in Disney content in particular.

It was an explosive news, to say the least, especially for fans of the company’s media properties, who have long relied of Netflix to get their fix of TV shows and movies from studios like Walt Disney Pictures, Walt Disney Animation Studios, Pixar Animation Studios, Lucasfilm Ltd, and Marvel Studios. But with its arsenal consisting thousands of hours of content, Disney is definitely up to the challenge.

And the company plans to make even more content in the future, with Forbes Magazine reporting that Disney is particularly interested in creating new original television series. In a call with analysts recently, Walt Disney Company Chief Executive Bob Iger revealed that the company is planning to create materials based on the Star Wars and Marvel properties, as well as titles like High School Musical and Monsters Inc. A report from celebrity website Deadline also reported about the company’s priority movie projects, which include titles like Don Quixote, Lady and the Tramp, The Paper Magician, Stargirl, and Togo.

Of course, niche streaming services are nothing new, with media companies like Yaddo (documentaries), Crunchyroll (anime), Shudder (horror shows), and Mubi (hand-picked cinema selections) operating for several years already. However, commitments by media conglomerates like Disney, Warner Brothers, and CBS to dive into the OTT world will only mean more entertainment options for audiences in the near future—more options, but likely more expensive for customers as well, as streaming services become more fragmented. For media companies, on the other hand, it means competition will become tougher in the years to come. It’s a contest that will definitely separate the wheat from chaff, as the streaming wars develops into a contest where the victor will no longer be judged simply according to who provides the most content, but also the best content.