There is a lot of attention on live streaming events right now. Some even claiming the rise of live streaming is the Napster moment for the events industry.
The reality is that live streaming has some fatal flaws that present big challenges for the future of live streamed events.
Some of these flaws can be improved over time, however many of them cannot. There is a reason why live stream fatigue has set in.
Don't get me wrong, live streaming absolutely has a place. There is some great stuff happening out there, especially during this era of social distancing.
However, when it comes to disrupting physical events, there are many reasons why live streaming does not have a chance...
1. Live Streaming has a LOT of competition
Once you are attending a physical event, there is basically no competition.
You have almost the full, undivided attention of the attendee. There is also a very high perceived switching cost to an alternative. You'd have to essentially make the decision to walk out of the event.
Live streamed events on the other hand have a huge amount of competition. The competition isn’t other live streamed events, is actually existing alternatives competing for the same attention.
This includes Netflix, HBO, Disney+ and basically anything else you can think of that you could substitute the time for.
Many of these alternatives have invested many millions of dollars in production quality and are specifically designed for their given format.
Right now, live streamed events are really just physical events that are being live streamed, rather than specifically being designed for the live streaming format.
Not only that, we're not seeing the same level of production budget for a physical event, let alone Netflix level investments.
And of course, there is almost zero switching cost with a live stream. It's as easy as clicking on another tab to go and do something else.
Will live streaming ever have a business model to support the investment needed to be able to compete against alternatives? What content will be created that is specifically designed to be live streamed?
2. Watching a live stream is a worse replacement than being in the audience at a physical event
When Napster disrupted the recorded music industry, it's true that the downloaded music was not as high quality as a CD. However, the listening experience was largely identical and a direct substitute.
The experience of watching a live streamed event, however, is a very different experience compared to being in the audience of a physical event. Not at all a direct substitute.
This is very obvious for things like Concerts, Music Festivals, Food & Drink Events. For these events, the full experience has no effective way of being materially translated over a live stream.
Interestingly for events like Keynotes, Speeches and Comedy, live streaming actually does a pretty ok job of replicating the content consumption experience.
But this leads to the next point, which is that the content consumption is just one part of an event. It shouldn't be conflated with the entire event experience.
If a virtual event is a worse experience than a physical event, how can a virtual event ever compete when physical events return?
3. Watching the content is only part of the experience of an event
If you break down an event - a conference for example - you have the content (keynotes/breakouts) as well as the exhibitors.
But you also have the impromptu conversations in the hallways, social events (dinners & cocktail parties), as well as entertainment.
And in many cases people often don’t even attend the conference, but rather hold business meetings near the conference venue.
Live streaming only focuses on replicating the content consumption experience. Often ignored are the other aspects, which are probably a more important part of the event than the content itself.
What does a virtual event look like if you’re focusing on more than just the content consumption experience?
4. Live streams have almost no differentiation to a recorded video
With the internet there is an abundance of content - whether that is information or entertainment.
So, in many cases, the content that you are live streaming is probably already available out there (or at least an acceptable substitute).
Live streaming, in some ways, is like going back to the pre-Netflix era, where you had to remember to watch a TV at a certain time.
With most live streams having minimal differentiation to a pre-recorded video, it's often a worse and a more inconvenient experience than just watching a pre-recorded video.
How many times have you just forgotten about a live stream, or couldn’t make the scheduled time?
Yes, there is something novel about the chat and Q&A's, but does it really add that much more to the experience?
What about a virtual event could be 10x better than a physical event?
5. Live streaming is less scalable than on-demand video
One of the greatest strengths of live streaming, is that it’s live. But one of its greatest weaknesses, is that its live.
You can absolutely reach a large number of people through live streaming. But because a live stream has to be live, it makes it a lot less scalable than a recorded video.
With a recorded video, you can record it once and then make it available for anyone to view at any time.
For a live stream, for someone to view you have to be actively in front of the camera.
Many Twitch stars are finding themselves chained to their computers, because they have to be streaming to generate advertising revenue. With YouTubers on the other-hand, they are able to generate advertising revenue while they sleep.
6. You'll probably still need a physical audience for your live stream event
Even for events that are the very best suited to live streaming as a format (Keynotes, Speeches and Comedy), with no physical audience it really takes away from the experience.
If you watched the recent Apple Event — it was just plain boring. And a big reason why is because it didn’t have an audience (and for obvious reasons given covid).
Imagine watching a comedy show, with no audience? Or a Speech?
Live streaming absolutely has a place here to expose physical events to a wider audience for people who can’t physically attend. But for many events, you cannot get away without having a physical audience.
How can virtual events disrupt physical events if in many cases you’ll still need a physical audience?
7. Time zones present huge challenges for live streaming
One aspect that is often overlooked when it comes to live streaming is time zones. It’s impossible to set a time that is going to work for all geographies.
This often leads to you excluding part of your audience, which is never a good experience.
One solution to this is having multiple live stream time slots. However, this is in away counter to the fundamental idea of live streaming, which is bringing people together around a single moment.
Is there a way to solve for time zones for live streams?
8. People are not willing to pay as much for a live stream, compared with a physical event
People just aren't prepared to pay the same amount of money for a live stream compared with a physical event.
The thought was that this would me be made up for in scale. Unfortunately, that has not been the case.
While we've certainly seen some outliers, in the vast majority of cases we've found that the revenue is nowhere near comparable to what can be generated for a physical event.
A big problem is that the pricing anchor is the cost of Netflix at $12.99 per month for unlimited content, rather than a $50 one off ticket.
9. You can't charge per person for live streams like you can for physical events
With physical events you charge per attendee. For live streamed events you can't charge per attendee, instead generally you’re charging per device.
The reason for this is because there is no way to limit the number of people watching on the same device.
This significantly reduces the market size for live streaming. And yes, some of this can be made up for in scale, at the same time, there are only so many fans who will buy tickets.
Should live stream events give up on charging per attendee, or could there be a compelling reason to get attendees to pay individually?
10. As soon as you start charging for live streams you need to provide customer support
If you're charging for access to a live stream, you will need to allow for providing some level of customer support.
This certainly can be solved, however it’s not without cost. Especially given support will need to be provided almost immediately, given the time critical nature of live streaming.
Perhaps this can be something that the live stream platforms can solve.
How do you solve at scale for customer support for live streams?
11. There has been a big increase in live stream fraud in the last 6 months
During covid we've seen a large number of cases involving live stream fraud, particularly on Facebook.
This involves scammers creating fake Facebook pages and events for well-known artists, and tricking people into entering their details and purchasing tickets.
One high profile example of this happening is Above & Beyond, however there are countless other examples.
Not only does this scam consumers out of money, it can also lead to identity theft (from the personal information that is being captured).
Hopefully platforms like Facebook implement changes to prevent scams like this continuing to happen, because this could be pretty detrimental to consumer confidence when purchasing access to a live stream.
12. Live streams often have a delay can make audience engagement awkward
One of the great promises of live streaming is two-way engagement with the audience, which can happen through chat interfaces, comments or Q&A's.
A big problem is latency, with many of the live streaming platforms having a delay that can make two-way engagement very awkward and unnatural.
There are ways to reduce this, but it can result in a trade off against video quality and buffering.
13. Live streaming bandwidth is not cheap
With the prevalence of ad supported, free live streaming platforms like YouTube, Twitch, Facebook and Instagram, many people are surprised to learn that live streaming is certainly not cheap.
Depending on how many viewers and how much you are paying for bandwidth, the costs can be thousands of dollars.
For very large audiences the bandwidth costs can even go up to the tens of thousands, or hundreds of thousands of dollars.
Live streaming absolutely has a bright future beyond covid. However, virtual events are not going to disrupt physical events (nor do they need to).
My point is that live streaming the content is only one aspect of a virtual event. And rather than attempting to put a physical event online, and calling it a ‘virtual event’, I believe the questions we should be asking ourselves are what new experiences can we create with live streaming? What content will be created that will be native to live streaming as a platform? What is unique about virtual events that can be better than a physical event ever could?
When we figure out the answer to those questions, that is where the excitement begins, the fatigue ends, and the bigger opportunities emerge.