How Niche Streaming Platforms Are Innovating to Compete with the Behemoths

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You can’t be everything to everyone. This is perhaps best understood by the video streaming behemoths that strive to curate content across massive audiences in a way that feels personalized. For the big streaming players, creating tailored, engaging experiences continues to be an uphill battle given the vast number of programming options and personal preferences. As audiences inevitably go on the hunt to satiate their specific content needs, an increasing number of smaller niche platforms are entering the market to fill in the gaps.  

On average, U.S. households subscribe to four streaming services, signifying consumer willingness to seek out and pay for the content that matters to them in an increasingly fragmented market. That’s not to say there isn’t a level of fatigue associated with essentially assembling an a la carte cable bundle—it just means that platforms need to produce content that is engaging, differentiated, and worthwhile to viewers. Enter the niches. 

In many ways, the OTT space is following in the footprints of its predecessor: cable. In cable’s embryonic stages, we saw major broadcast networks and large national channels monopolize the market. But as the cable bundle evolved and saw more widespread household penetration, more niche channels (e.g. sports, kids, foreign language, lifestyle) proliferated, economically justified by the volume of viewers interested in those niches.  

Fast forward to 2022, and as the likes of Netflix, Disney+, and Amazon Prime continue to jostle for a spot at the top, we’re seeing the flourishing of smaller SVOD platforms. In fact, recent growth data found that niche platforms are, in some cases, growing nearly twice as fast as their larger counterparts. 

People want access to both broad-based content and their more specific personal interests, and niche platforms are finding success in a saturated market with resourcefulness and innovation. By providing targeted content and doing more with less, they will continue to disrupt the streaming space. 

Leveraging FAST and Universal Search for Discoverability
Discoverability remains a key challenge for smaller streaming platforms. In the days of cable, niche content offerings were discoverable by their inclusion in the cable bundle, enabling users to stumble upon them while mindlessly scrolling through their TV channels. Today, however, it can be harder to build brand recognition and target audiences at scale. Luckily, there are a spectrum of innovations that niche SVOD platforms can leverage to strengthen discoverability. 

The first is free ad-supported television (FAST). For niche platforms, FAST serves as a complementary strategy to what they’re already doing in the SVOD space. It provides brands with not only an additional avenue to monetize content via advertising revenue, but also a means to reach much larger audiences at scale, give them a taste of their offerings, and create brand awareness. With increased distribution, high-quality content, and strategic channel placement, brands can use FAST as a way to gain exposure and ultimately drive users back to their owned and operated subscription products at a premium price point. 

Second, universal search features at the streaming stick or smart TV level have been monumental in accelerating the discoverability of niche platforms. Now, users can search by specific show, movie, or keyword and be directed to the application that houses it. 

FAST and universal searchability help enable niche platforms to tap into organic discovery experiences and lessen their reliance on paid marketing. 

Monetizing Library Content to Super Serve Users
The interesting thing about the streaming world is that a platform’s ability to invest in content is almost wholly dependent on its number of subscribers, and its ability to attract and retain those subscribers is dependent on engaging content. Resourceful niche streaming players are finding ways to optimize this cycle and prioritize growth while holding their content costs in check.

The big streaming players invest eye-popping budgets into producing content they believe will draw in an engaged audience (Amazon Prime’s upcoming eight-episode Lord of The Rings season is costing it a whopping $465 million, for example). But smaller platforms are uniquely positioned to drive engagement with niche content—and at a fraction of the cost. 

In addition to producing original content, smaller platforms often scoop up licensing rights to library content that has already been created. They’re then able to take that existing content, find the natural market for it, aggregate its users, and generate new subscriptions and revenue streams. This way, they can monetize deep library content while still super serving their audiences in a way that doesn’t require major budgets.

Driving Personal Experiences with Data Science
Users expect the same level of polish from niche platforms as they do from the giants. That means not just an intuitive and frictionless UI, but a personalized experience with tailored content recommendations. With a 37% churn rate among paid SVOD services, the stakes are high. 

The streaming behemoths run a data operation—they often have more data scientists than smaller platforms have people in total. This operation is constantly working to provide customized recommendation algorithms, identify strategic content investments, optimize costs and viewing time, and more. 

The democratization of streaming technology—which makes it possible for smaller brands and influencers to launch OTT platforms in the first place—is enabling them to compete with data giants. By teaming up with strategic technology partners, brands can gain access to new troves of data expertise to optimize and personalize their OTT experiences, thus augmenting their lack of headcount. This allows them to keep up with some of the machine learning capabilities that are merely table stakes but highly costly to maintain in-house. 

The Bottom Line
In a crowded streaming market, hyper-focused platforms are seeing sustained success by providing users with the personalized experiences and targeted content they care about. By capitalizing on opportunities in the FAST space, monetizing library content, and leveraging user data, niche platforms are reaching larger audiences, unlocking new revenue streams, and driving engagement within their OTT experiences. 

Chris White

Chris White is SVP & Chief Product Officer at Endeavor Streaming.