Navigating the Shifting Streaming Landscape: Insights from Kantar’s Dominic Sunnebo
In a recent interview I did with Dominic Sunnebo, Global Insight Director at Kantar, Sunnebo shared findings from Kantar’s latest Entertainment on Demand (EoD) data, revealing distinct trends in the UK market and their broader implications. The conversation highlighted not only Kantar’s insights but also Sunnebo’s expertise in interpreting key trends shaping the global streaming market, from the dominance of top-tier services to the rise of ad-supported models and the challenges faced by niche platforms.
Overview of UK Streaming Market Dynamics
To set the stage for the UK data, Ozer asked about the typical services available to UK viewers. Sunnebo explained, “The UK market reflects what’s happening in the US to some degree. If you think about the top three, it’s a very similar kind of picture. Netflix, Disney, and Prime Video—they’re what we call ‘hygiene subscriptions.’” These platforms, he said, “tend to have really, really high retention rates. People aren’t swapping in and out of those services.”
Sunnebo emphasized that a significant portion of sports viewing in the UK is still dominated by Sky, with “about half the UK population connected” to the pay TV platform. However, aggregators like Sky have adapted to the rise of streaming. “Everyone thought when Netflix and all these different streaming services started encroaching on their territory, we’d start to see their share go down,” Sunnebo noted. “But what we’ve actually seen is a really clever play by pay TV companies—they’ve started to build big bundles which include the likes of Netflix and Disney, making it a little bit easier for the consumer and more solid for their business long term.”
Key Differences Between the UK and US Markets
Exploring the differences between the UK and US streaming markets, Sunnebo highlighted a reliance on national broadcasters like the BBC and Channel 4. “Still around 30% of the UK don’t have access to any streaming services,” he said. Instead, these households rely on Freeview, which offers “30, 40, 50 different linear channels with high-quality ad-supported content.”
In terms of streaming behavior, he pointed out, “In the UK, on average, you’ve got about three services per household. In the US, you’re reaching close to six services at the moment.”
Sunnebo also noted a rising demand for British-produced content. “Almost 40% of new subscriptions in the UK over the last year were for British shows. That’s up almost 10% over the past 12 months,” he explained, citing examples like Slow Horses, The Crown, and Ted Lasso. He observed, “Over the last 18–24 months, you’ve seen a pretty distinct shift” in viewing habits toward local productions, driven by investments from major platforms like Apple TV+ and Netflix.
Disney+ Growth Through Content and Partnerships
Notwithstanding this growing preference for homegrown content, Sunnebo reported that Disney+ continues to dominate in the UK, thanks to its combination of high-profile content and innovative promotional strategies. “Disney’s had a fantastic year in terms of content, did really well at the Emmys. That’s clearly played a huge part.” He noted that Disney+ has successfully broadened its appeal beyond family audiences to attract new demographics.
What also sets Disney apart, according to Sunnebo, is its creative approach to partnerships. “One of their most interesting partnerships is with Lloyds Bank. If you have an account with them, you can access the ad-supported version of Disney+,” he said. Another unique collaboration involves “a German supermarket chain called Lidl. If you spend a certain amount of money doing your grocery shopping every month within Lidl, you can access Disney+ ad-supported content for free.”
Sunnebo described these strategies as innovative, saying, “The breadth and the innovation within these different promotions are helping accelerate their growth at the moment.”
Trends in the UK FAST Market
Moving on to other market segments, Sunnebo noted that the UK FAST (Free Ad-Supported TV) market has grown significantly but faces emerging challenges. He reported that the sector is “struggling to win over new users” and explained, “As more players enter the market, like Tubi, they’re not necessarily growing the sector. They’re stealing customers or stealing screen time from other competitors in the same space.”
To thrive, Sunnebo stressed the importance of expanding the market beyond current streaming audiences. “FAST needs to win over customers who aren’t yet in the streaming sector at all,” he said. He emphasized that targeting non-streaming households and engaging audiences currently reliant on national broadcasters would be essential for growth.
Challenges for Smaller and Niche Platforms
Smaller platforms face an uphill battle against major players like Netflix and Disney. Sunnebo pointed to services like Crunchyroll and Shudder, which cater to niche audiences. “They have pretty high retention rates, but they’re not growing particularly fast,” he observed.
To expand their reach, Sunnebo recommended leveraging aggregation. “Smaller brands have an opportunity to reach a much wider audience by partnering with major aggregators like Sky,” he said. He also emphasized the importance of catering to niche audiences as effectively as possible: “Serving those niche audiences as best as they possibly can is going to be key.”
Balancing Tentpole Content and Subscriber Retention
Sunnebo used House of the Dragon to illustrate the double-edged sword of tentpole content. “When House of the Dragon episodes drop, we see a huge spike in acquisitions. But as soon as the series ends, people cancel the service,” he explained.
Platforms have begun adapting their release strategies to mitigate this churn. “It’s no longer about dropping a whole series for binge-watching over the weekend. Consumers are happy to have series strung out a bit longer,” he said. This approach allows viewers to discuss episodes with friends and family, which Sunnebo described as “a key role in engagement.”
Attracting and Retaining Subscribers
I asked Sunnebo about how services are evolving to retain subscribers after tentpole content is consumed, citing Netflix’s moves into cloud gaming and sports. Sunnebo noted a significant shift in consumer behavior: “What we see in the data at Kantar is what drives acquisition is not the same as what drives retention. Gone are the days when someone signed up to Netflix or Disney because they wanted a total entertainment solution. They are joining to watch a specific piece of content 90% of the time.”
Sunnebo emphasized the importance of engaging subscribers immediately after they’ve consumed the content that drew them in. “If that’s not successful within the first month, you’re going to lose that customer. It’s critical to engage them right after they watch that sort of bit of content they were drawn in for.”
He outlined two primary strategies for retention. First is improving discovery: “A really strong job with your interface and CRM to help people discover content you think they’re going to want to watch after that show.”
The second is leveraging back catalog content: “Series like The Office or Grey’s Anatomy—titles people are comfortable with, that they know they’re going to enjoy—play a huge role in keeping people happy between big tentpole releases.”
For platforms like Apple TV+, building a back catalog is a challenge. “Apple doesn’t have this back content, so they’ve had to start buying catalog content in the US. Otherwise, you risk these customers churning out as soon as they watch that tentpole title,” he explained.
When asked about the impact of pricing, Sunnebo highlighted Apple’s reliance on free trials as a key issue. “If you are not paying for a service, you get into your mind it’s not worth paying for. It’s a real challenge for Apple to get people into the habit of paying when they’re so used to not doing it.”
Growth and Targeting in Ad-Supported Models
The conversation then shifted to AVOD. I asked, “Are you seeing the ad offerings and specifically the targeting capabilities of the ad offerings keeping up with the services? The promise of CTV was precise targeting. Is that happening both in the UK and worldwide?”
Sunnebo responded by highlighting the advancements in targeting capabilities within ad-supported models. “Pay TV and linear channels used to argue they could reach everyone. But now, with 70% of Prime Video customers on the AVOD tier, streaming platforms are reaching the same audiences with more data and precision,” he said.
This shift, according to Sunnebo, is putting increasing pressure on traditional TV channels. “Streaming platforms know a lot about their viewers’ preferences, and that puts a lot of pressure on mainstream TV channels,” he explained. As the reach of AVOD services expands, Sunnebo noted that the promise of precise targeting is becoming a reality, allowing streaming platforms to cater to advertisers with enhanced data-driven insights.
Privacy Concerns and Competition with Walled Gardens
Focusing on the privacy side of targeting, I asked, “With the emphasis on privacy and protection of data, how is that impacting CTV? How do non-walled garden platforms compete with the major players who have tons of data?”
Sunnebo acknowledged the growing importance of privacy concerns but pointed out that they often play out differently in the streaming world. “People on streaming services are less aware they’re being targeted compared to shopping on Google or Facebook,” he said.
Sunnebo also highlighted consumer preferences for relevance in ads. “About one in four UK viewers actively say they want ads tailored to their interests,” he explained, suggesting that targeted advertising isn’t necessarily viewed negatively. However, he predicted that as AVOD grows, “privacy conversations will become louder, similar to those around Google and Facebook.”
For non-walled garden platforms, this presents a significant challenge. Their limited data capabilities make it harder to compete with services like Netflix or Prime Video, which have extensive viewer data to power their ad offerings.
Live Sports and Experimentation with New Content Types
Then I brought up the streaming topic of the month: Netflix’s foray into live sports with the Jake Paul vs. Tyson fight. “We can’t conclude a conversation about CTV without talking about the Jake Paul vs. Tyson fight. What was the outcry in the UK and Europe about that? How is it going to affect Netflix in the long term?”
Sunnebo reflected on the impact of Netflix’s live sports experiment. “All PR is good PR. People talked about it, and Netflix learned valuable lessons, particularly around bandwidth and latency,” he said.
Despite some technical challenges, Sunnebo described the experiment as a success. “It was a success overall for Netflix,” he said, adding that the lessons learned would likely influence their approach to upcoming live sports rights, including WWE. For Netflix, this experiment signals a bold step into new content categories, potentially expanding its appeal beyond traditional on-demand programming.
Consultancy Advice for SVOD and FAST Platforms
At the conclusion of the interview, I asked Sunnebo to put his "consultant hat” on and offer strategic advice for large SVOD services, smaller niche platforms, and FAST channels, with an emphasis on addressing the unique challenges each face in a competitive market.
Sunnebo began by addressing the needs of large SVOD platforms. Asked what such services should focus on beyond content development, recommendation engines, and partnerships, he highlighted the critical importance of interface design. “Interface is one that probably doesn’t get talked about enough, but it actually plays a really key role, mostly in discovery of new content,” he said. He also pointed out that technical issues contribute significantly to subscriber churn: “If you have the same issue too many times, people leave. That accounts for about 10% of churners across the sector—some kind of technical issue.”
However, Sunnebo argued that discovery remains the most impactful aspect of a platform’s interface. He provided compelling data to illustrate Netflix’s dominance in this area. “Across all of the UK, amongst people who have a streaming service, when they are looking to find new content to watch, over 60% of them go to Netflix first,” he explained. He described this as “a superpower” that gives Netflix an edge: “They can get people to watch something when they don’t know what to watch. If they don’t find something on Netflix, they’ll go to Disney or Prime Video. But the reality is most people go there first looking for inspiration.”
Turning to smaller platforms, Sunnebo emphasized the importance of maintaining subscriber engagement between tentpole content launches. “Having the right content between the tentpole launches is crucial,” he said. He suggested a focus on catalog content that is “relaxed, comfortable, familiar—content people know and love,” to keep subscribers satisfied. Partnerships with aggregators like Sky or Prime Video can also be instrumental. “Working with pay TV providers as an add-on channel just makes that whole experience neater for people,” Sunnebo explained.
Finally, Sunnebo addressed priorities for FAST channels, which operate in an especially crowded and competitive environment. He advised platforms to narrow their focus: “You’ve got to find where you’re trying to play in the market. What audience are you trying to go after?” He noted that mainstream audiences are already well-served by national broadcasters and major players, making it essential for FAST platforms to define a specific niche. “You’ve got to cater to that audience in the best possible way and do a better job of it than everyone else in the market,” he said.
When pressed for clarification on what “better” means, Sunnebo replied, “That’s probably more around the content—giving them more of the content they want in the categories in which they have a real passion for.” His advice underscores the importance of understanding and meeting audience needs with precision, a lesson that applies across all tiers of the streaming landscape.
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