Consumers have begun to enjoy unprecedented access to every imaginable form of digital media over the last few years. It is obvious that the way we consume media is rapidly evolving, and though people can find what they want in this amazing digital world of entertainment, they are becoming frustrated by the growing complexity of finding one platform through which to enjoy the various outlets they subscribe to.
Ashley Brasier of Lightspeed Venture Partners is an expert in the field of digital media and is constantly on the lookout for entertainment trends. Like many of us, she sees how consumers are piecing together custom entertainment packages through the use of several different apps and streaming services. Now more than ever, people are hand-picking the TV, music, and gaming services they find most valuable and assembling custom entertainment packages that fit their needs and wants. This can cover a range of options from cheap and free services with ads to premium paid subscriptions with more content and no commercials.
So how did Brasier become so fascinated with what’s next in the world of digital media? She joined Lightspeed as a member of the consumer investing team in 2018 and took on the task of overseeing the growth strategies of early-stage tech companies. Before joining the team, Brasier earned her Bachelor of Arts in Visual and Media Studies from Duke University. Brasier’s studies at Duke and abroad in Copenhagen nurtured her interest in digital media and entertainment.
Following graduation, Ashley joined Bain & Company, a global management consulting firm, as an Associate Consultant Intern. Within her first year, Brasier was promoted to Senior Associate Consultant. She held the position for three years until she decided to transition to Silicon Valley, where she landed a position as Category Manager at a local services start-up called Thumbtack. This experience provided her access to her first startup and exposed her to the world of venture capital. She found the industry so fascinating that she decided to take her education and career to the next level and enrolled at the Stanford Graduate School of Business.
Brasier sought an opportunity that would allow her to steadily apply her education to real-life scenarios. With this goal in mind, she found herself in the world of consulting while still attending Stanford. At Stanford she learned the art of prototyping business ideas. “Prototyping is a key tool in the entrepreneur’s toolkit, as it enables you to ‘fail fast and iterate faster.’” Brasier brought this mindset with her to Lightspeed Venture Partners, and it has become the key to helping entrepreneurs turn their ideas into reality. Today, Ashley no longer consults but rather concentrates her time on Lightspeed and searching for opportunities in digital media and entertainment.
The Current State of Digital Media
Customers continue to move in the direction of selecting the services they want from a variety of outlets. Though the options are far better now than they were in the past, they are pieced together from so many different services that consumers are growing restless.
Streaming services have quickly become the most popular way for people to enjoy video programming. In fact, according to a survey conducted by Deloitte Insights, more users now have a streaming video service than a traditional TV delivery service like cable or satellite. That’s a significant trend, but 43 percent of households still retain both pay-TV and streaming services. Uncertainty about the future of home entertainment has caused many to hold on to their regular TV services, especially customers who value live coverage of news and sports. Live streaming TV could be the next big disruption in this arena, and data shows a growing number of consumers moving in this direction.
Brasier notes that video is not the only form of media transitioning to streaming. Music and gaming are a close second, and many digital media services have already taken note; some streaming video and wireless service providers are bundling music into their subscriptions. In addition, music streaming services have grown 58 percent from last year. Plus, the noted that younger consumers tended to put music very high on their list of streaming necessities. This explains why almost 60 percent of Gen Z and millennial consumers have some kind of music streaming subscription.
Gaming, on the other hand, has continued to evolve to include a wide cross-section of age groups. The gaming industry’s expansion into immersive games and portable platforms has enticed a fresh crop of gamers to subscribe to gaming services. Approximately 40 percent of consumers enjoy gaming on at least a weekly basis, and 30 percent of the respondents in the survey said they subscribe to a gaming service. As with streaming music, Gen Z and millennials were the fastest-growing groups of consumers with over half subscribing to gaming services and playing regularly.
It is important to note that gaming is beginning to overlap and compete with other forms of entertainment. Brasier is interested in the new ways in which gaming platforms engage their fans. The disruptive shift stems from consumers who are as interested in game spectatorship as they are in playing – much like you might watch your favorite sport. In a very short time, game spectatorship has become a big business. Tournaments are filling entire stadiums with fans who have come to watch top competitors compete for massive prizes. The survey found that 32 percent of respondents watch these types of eSports weekly.
Overall, streaming services have become central to the typical consumer’s entertainment needs. There are thousands of services to choose from, and with a bit of effort, it’s not hard to find what you want for a reasonable price. The technology is still relatively new, so competition for viewers’ attention is fierce. On average, consumers are willing to pay for three subscriptions at a time and use free services with adds to supplement the rest. For successful startups, the money lies in persuading people to pay for a subscription – for which content is king. In 2018, 57 percent of paid subscription users were willing to pay for original content. Streaming services are well aware of this fact, which is why companies like Netflix and HBO are spending billions of dollars on new hit shows.
Reacting to A Fractured Digital Media Landscape
Customers are happy with their exceptional access to content and new-found freedom to customize entertainment to fit their needs. However, digital media is so new and evolving so rapidly that at times it feels like the wild west. The lack of connectivity, uniformity, and uncertainty in the future of digital media breeds friction as customers deal with the problems associated with picking and choosing just the media they want.
Some issues are simple, like the hassle of juggling several services and formats on a clunky interface. However, as people continue to add services, dissatisfaction with having to pay for multiple subscriptions grows. It’s become the number one complaint with nearly half of all streaming customers, who report frustration with the number of subscriptions and services they must piece together the entertainment they want. 48 percent of consumers feel that this makes it harder to find the desired content.
The other big complaint among consumers is the difficulty in discovering new content. This is a major concern for digital media providers who, as mentioned before, are heavily invested in using new and original content to attract new customers. Without an easy way to navigate the overwhelming number of choices spread out between multiple channels, some customers simply lose interest. 43 percent of consumers report that if they were unable to find content within a few minutes, they would give up.
Security threats and vulnerabilities are also on consumers’ minds when they subscribe to multiple services at once. 23 percent of US households were the victim of cybercrime in 2018, making consumers of digital media increasingly concerned with identity theft and the use of sensitive information without their consent. More subscription services hold customers’ financial and personal information and track their online preferences, opening vulnerable to security breaches and loss of privacy.
Apart from security, other technologies are popping up to tie this growing industry of scattered services together. One device Brasier has explored in the past is the smart speaker or voice-enabled digital assistant. Advancements in voice search technology have paved the way for personal assistants and smart home innovations like Siri and Cortana to occupy our smartphones and smart home devices. Ownership of smart speakers spiked 140 percent between 2017 and 2018. Part of the reason for the sudden surge in this new technology was affordability coupled with consumers’ newfound love of streaming music, but Brasier saw other reasons for its monumental success.
She sees this increase in demand as the result of an increasingly on-the-go society that wants access to information almost instantaneously. Voice assistants are providing consumers with access to information that makes it possible to do tasks more quickly than they ever have before. Roughly 35.6 million Americans use a personal assistant to perform an internet search at least once a month, making voice searches one of the great disrupters in the tech industry and forcing companies to scramble to ensure they are the top hit for the voice search.
So far, technology has struggled to conveniently link the home together beyond voice-activated music. Potential exists for a startup to sync other digital media to help consumers find the streaming entertainment they want as easily as they can access the music they love. There are some ways to get your virtual assistant to control your TV and search for content; however, the lack of uniformity creates difficulties for mainstream adoption.
Artificial Intelligence (AI) may be the next component that will truly integrate streaming technology in the way consumers want. AI is the behind the scenes tech driving many trends in digital media. AI is the simulation of human intelligence by computer systems. Right now, the AI being used by digital media is designed for specific tasks and is nothing like the science fiction we imagine it to be. However, rapid advancements in AI are improving the voice-enabled digital assistants’ ability to understand what the user is asking for. Top brands are scrambling to win over customers as their smart speakers become linked to more and more devices in the home. It won’t be long before the smart speaker is the central hub to not only your streaming entertainment needs but the function of your entire home as well. Everything from the lights to the grocery list is soon to be easily linked to one device.
The Potential in Digital Media
People are enjoying a point in history where they have never had so many choices for entertainment right at the tips of their fingers. Never before have they had the freedom and flexibility to select from hundreds of services or to choose between countless new internet-based video, music, and game streaming depending on their interests and budget. Some big names like Netflix and Amazon have become household names in the digital media space. Though traditional pay-tv is still enjoyed by about 65 percent of consumers, it has been overtaken by streaming video in overall subscribers. This is making the new technology highly competitive, and it is growing so rapidly that little thought has been put into combining all of this media into one easy access point or device.
There is a growing consensus amongst digital media users that the hassle associated with managing multiple digital devices is limiting their enjoyment and the service’s usefulness. They are also fearful that the problems will continue to grow as more networks and studios jump on the streaming bandwagon. Companies like Disney will pull their content from rival companies once their streaming services are up and running. This will also make the market more crowded, compounding the problem of finding new content. Customers are also worried that as larger companies and production studios enter the field, prices will begin to rise, effectively ending the customization that consumers love.
Companies who will be successful in this industry have to develop a way to address all the main concerns consumers have: combining customization of the media experience while solving the headache of managing too many subscriptions, adds, and security threats.
Brasier still has a lot of faith in the smart speaker for its versatility. As AI technology helps these devices become more user-friendly, they have the potential to dominate our media experience even more. Digital assistants like Alexa are making it easier for consumers to not only manage their entertainment experience but their entire home experience as well. Brasier is betting on advancements in AI, like better voice recognition and more processing power to position voice-activated personal assistants at the center of the digital media experience. On-demand devices and a growing device ecosystem could reduce much of the friction consumers complain about. It could also put the tech companies that created digital assistants in the driver’s seat.
Ashley and Lightspeed continue to assess potential new technologies and the startups that create them in the field of digital media. Her understanding of the industry is intimate, having worked in the field throughout her professional career and having majored in Visual & Media Studies during her time at Duke University. She has worked with several startups across several different industries on their growth strategies – most notably, a local services start-up based in San Francisco called Thumbtack. The experience Brasier gained from being an integral part of a startup’s rapid scaling gave her first-hand experience in managing a startup’s growth. Exposure to the latest trends and innovations help fuel her passion for creativity that drives the innovations she now funds through venture capital. Her natural ability to understand customer behavior is a valuable asset when assessing the future potential of digital media technologies.
Be sure to follow Ashley Brasier on Twitter, and find out more about her work with Lightspeed Venture Partners here: https://lsvp.com/team/ashley-brasier/
