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The Streaming Wallet Strain Is here

Next week we’re seeing the launch of HBO Max. Less than two months after that, NBCUniversal’s Peacock behemoth makes its full public appearance. Together they promise an additional 20,000+ hours of content, which makes the already endless amount of streaming content even more overwhelming.

But life is full of tough choices, and these two streamers are taking two different pricing approaches to what is now becoming a significant financial decision for a lot of viewers.

HBO Max is offering early subscribers their first year for $11.99 (so better hurry) and $14.99 after that. This is an ad-free experience, which is a big positive for some, but on top of how much you may already be spending on Netflix, Disney+, Hulu, Amazon Prime and maybe even AppleTV+ or Quibi, that is a chunk of cash.

And people are already pushing back against it. 51% of consumers spend $15 or less on all their streaming services right now, according to this article, which also shows that HBO Max, even with Friends, is not exactly hotly anticipated:

HBO’s platform was considered less essential than Netflix, Disney+, Hulu and Amazon Prime Video, according to respondents. They put it in the same range as CBS All Access, a $6-a-month service that’s been a modest success for ViacomCBS Inc. but not the buzzy hit that HBO Max aspires to be.

Peacock, on the other hand, is aimed at the more frugal viewer, with three tiers: free with a Comcast/Xfinity subscription, $4.99 with ads and $9.99 without ads. And it will soon be stealing back the most streamed show on Netflix: The Office.

But is that still too much? Or is Peacock leaving money on the table? More importantly, will either of these streamers pull subscriptions from other platforms?

These price plans are going forward no matter what, but when viewers start digging in, there will need to be a focus on the data and asking some hard questions about what content the audience is willing to pay for. And with so much viewer and content data available, AI is going to be crucial to making decisions.

By using a tool such as Resonance AI, streamers are able to go far beyond what content is being watched and determine what elements are having the greatest impact. With such a large library of choices, streamers need to figure out how to surface the most relevant movies and series to viewers, making sure that they are not only willing to come back but willing to continue paying every month.

If viewership wanes or subscriptions stall, it’s even more necessary to determine what content needs to be created or licensed to re-engage former viewers or gain new ones.

But if neither of those strategies are having the intended effect, then AI is invaluable to determine how to tier a streaming service. This can come in multiple forms, and AI can help segment content into a la carte options or help determine if a cheaper tier with commercials would bring in more viewers or turn off current users.

On the flip side, a streaming service with a commercial tier can use AI to determine the length of commercial breaks, the kinds of commercials that are leading to greater engagement and field test what kind of content could possibly justify a jump in the cost of a subscription.

This is the wild west of streaming, with viewers still trying to figure out how to get the most good content for the least amount of money. And the best way to know what they want, and what they want to pay for, is by using Resonance AI.

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