In our last Chart of the Week we started looking at the Subscription Video Streaming Services category and specifically the pandemic winner – HBO Max.  This week we’re taking a deep dive and examining the Pre/Post Pandemic Penetration and Usage by demographics.

The MSW TBSM tracking service measures category penetration and level of usage as one component of the survey.  A comparison of results taken before the beginning of the pandemic to a comparable assessment from May 2021 reveals explosive growth in the Subscription Streaming Video Services category.

• Overall, category penetration increased from 75.4% to 86.6%, which represents a 15% increase.  Moreover, claimed heavy usage increased by over half during the pandemic, from 18.5% before the outbreak to 29.2% in May 2021.  Clearly, as a result of spending much more time at home during the pandemic, people were turning to video entertainment.

• Those demographic groups which have seen particularly large gains include:
  • Women, with heavy usage of streaming video services more than doubling.
  • Age 55 Plus, which had the lowest pre-pandemic penetration, but closed the gap substantially, reaching penetration of 70% in the latest reading.
  • Below Median Income, clearly also looking for entertainment options and perhaps enticed by some of the newer services, particularly lower cost “basic” plans.

• Clearly these results are consistent with the surge in subscription levels reported by the major subscription streaming video services for 2020:
  • Netflix added 37 million new subscribers worldwide in 2020 – easily the largest annual increase since expanding into video streaming 14 years ago.
  • Hulu added 9 million new subscriptions, a 29.6% year-over-year increase.
  • While Disney+ debuted with very strong numbers pre-pandemic, growth continued to surge through the pandemic. The service hit 100 million subscribers in March 2021; a remarkable feat for a service just over a year old which initially hoped to reach 60 to 90 million subscribers by 2024.
  • At the end of the first quarter of 2021, HBO and HBO Max totaled 44.2 million domestic subscribers – far exceeding the 33.1 million subscribers a year ago (before HBO Max).

While subscriber growth is seen to be slowing with the easing of the pandemic, it is clear the pandemic accelerated the trend toward the use of streaming services, particularly among those groups which had been slower to adopt the technology.

MSW’s RDE Analytic Framework rests on a study that found that three equity dimensions (Relevance, Differentiation, Emotion) are responsible for driving a significant portion of brand growth. The RDE composite strongly relates to – and helps explain – CCPreference which itself is a validated predictor of market share.

Comparing RDE Assessment taken before the pandemic to comparable assessment from May 2021 reveals one brand in the Subscription Video Streaming Services category that has emerged as a winner – HBO Max.

• HBO Max was launched in May 2020 well after the COVID pandemic was underway. It essentially replaced the previous HBO streaming service, HBO Now, but with a huge amount of new content from a variety of WarnerMedia brands.
• Despite RDE levels being generally depressed as a result of the pandemic, HBO Max RDE levels easily surpass HBO Now pre-pandemic levels.
  • HBO Max easily outstrips HBO Now on all three RDE dimensions.
  • HBO Max is particularly strong in terms of relevance meaning that SVOD consumers feel that the HBO Max service is for someone like them.

• HBO Max also far exceeds HBO Now in terms of CCPreference – the percent of consumers preferring HBO Max over competitors in the subscription streaming services category. This suggests that HBO Max should be performing well in the marketplace. How has it done?
• HBO Max’s strength is its large and varied TV and movie catalog. In addition, Warner Brothers has been releasing its 2021 movies on HBO Max simultaneous with the theatrical release which has proven very popular.
  • At the end of the first quarter of 2021, HBO and HBO Max totaled 44.2 million domestic subscribers – far exceeding the 33.1 million subscribers a year ago (before HBO Max).
  • A report from Reelgood indicated HBO’s share of streaming activity rose from 2.0% in Q1 of 2020 (pre-HBO Max) to 12% in Q4 2020, placing HBO Max ahead of Disney+ and behind only Netflix, Prime Video and Hulu.
• This success – mirrored by extremely strong CCPreference growth – has come despite a soft launch which slowly added support for many popular streaming devices, the COVID pandemic and accompanying economic downturn, and ever-increasing competition in the streaming video space.

The RDE composite is strongly related to brand preference in this category, with a correlation of 0.96

Smart cookie-blocking technology led by Apple’s Intelligent Tracking Prevention (ITP) and Firefox’s Enhanced Tracking Protection (ETP) now block third-party cookies by default, and even Google’s Chrome will soon get controls that let consumers block cookies. Browser-level blocking, third-party ad-blocking apps, and new regulations like GDPR and the California Consumer Privacy Act (CCPA) are quickly relegating the old cookie to the internet dustbin.

Most digital marketing plans are built upon the use of personalized targeting enabled by cookies.  To enable these, companies will have to disclose every specific, possible use of their information by marketers.  Marketers are either going to obtain this opt-in on a narrowly defined use basis, or, form very specific consumer panels, or not pursue obtaining it at all to spare the risk involved.  One lawsuit in California for misuse could bankrupt a company.

While there are various digital techniques that do not require cookies that will be used, the consensus from those on the front lines is:

• ​Privacy first in all creative development, delivery and measurement
• ​Relevance without being personal (and creepy)
• ​Engaging targets (there are messages that you won’t have to micro-target to be relevant)
• ​Ad environments will become more important
• ​Effective reach will be a critical measure
• ​Good measurement, probabilistic models (rather than individual cookies) complemented by strong planning. (‘Everything old is new again’ stated by more than one panelist).
• ​Testing creative is a must
• ​Set a high bar for creative ads
• ​Content is where the focus will be

MSW provides an alternative to a post-cookie world…

• ​Test content before going to market
• ​Effective creative enables you to be relevant without targeting each individual
• ​Targeting research will be more critical than ever to successful creative
• ​MSW has unique measurement and analytic tools to develop your segments, targets and positioning
  • No advertising campaign can be created without a strong foundation in these three areas
  • Our probabilistic models are predictive and validated
  • Our accompanying models are build to include effective reach
  • Our models recognize various ad environments and platforms

​Contact us today and let’s talk about the implications for your brand in a Post-Cookie world.