Disrupt the TV Revs Model, or Keep it Intact?
SVOD services and digital player platforms are proliferating, expanding and attracting attention. You'd have to be living under a rock, out on one of Pluto's moons to have missed all that... The hot topics when it comes to SVOD have in the last few weeks seen more churn than Comcast's sub base, and generated more newsprint then President Trump's various vicissitudes!
Think about it: in the past weeks, we have had industry wide chatter on the following dynamic developments in digital television, eruptions all!: Rising investment in content, global scripted drama, LIVE broadcast on SVOD, skinny bundles vs. fat...
It was only a matter of time before the discussion shifted fully to figuring out the optimal model for generating revenues: the battle between ad sales vs. subscription. Disrupt, or fall back on old tried and true models for Pay TV?
First, it's important to acknowledge that the ad sales model ain't dead yet! In fact, TUBI is going whole hog into providing a subscription fee free service - - they are betting (and so are their investors) that the next evolutionary step for SVOD is to go a little backwards, and offer premium content on their channel that is fully ad supported. What do you think?
https://techcrunch.com/2017/05/09/free-streaming-service-tubi-tv-grabs-20-million-in-new-funding/
Not a bad bet, considering that consumer behavior down the line will probably lead to them selecting one or two anchor subscription services and then augmenting their package with a few other ad-supported (read: subscription FREE) channels or services. TUBI is betting they will be the next choice in a tier after you pick Netflix or Hulu.
Speaking of Hulu, looks like they are more and more a hybrid, and trying to keep the “old business model intact”. Hulu are a little of everything for everyone: Skinny bundle, live TV, some advertising, some subscription... It makes me wonder how Hulu expects its revenue model to evolve in the coming 12-24 months. Will they one day have the classic 50/50 split between ad revs and subs? And now a big and renewed commitment to building bigger and better content offerings, perhaps that will put them on par with Netflix one day.
Finally, let’s not forget about Facebook and YouTube. Facebook is doing a lot of hard thinking about what they can do with TV that will work on their massive platform. They are weighing and measuring their steps very carefully, and don’t want to make idle forays into television. This article some insights into Facebook's approach to television, in the midst of Reed Hastings' steadfast promise n ever have advertising on Netflix.
I found the last words in the article to be encouraging: “It's good to note that everyone could be right.”
Could we be? That would be a first!
So the SVOD media companies become cable companies while the cable companies morph into full service telcos....... And the telcos? Oh yes they become media companies (after a fashion) When does the music stop?
Visual Marketing & eComm Expert
7 年Good thought piece. I believe Amazon and Netflix will replace cable subs. And Youtube is a great delivery system for the networks BUT streaming in Facebook is fantastic. I receive alerts from the White House and Congress, British Parliament and corporate annual meetings. As a news aggregator, it is incredible. You only have so much time to devote to media and there are better things to do with your time than watch ads. I have not paid for TV or written a check for 10+ years and I have much more content available to me than I can consumer. The quality has increased as the costs have decreased. And studios are creating more material than in the past 50 years.