The Video Streaming Race - Some Thoughts About The Future
In the companion article The Video Streaming Race - An Overview the strategies and corresponding news were summarized for each of the most notable players in the race for video streaming: Disney, Apple, Netflix, Amazon Prime Video, Hulu, YouTube Red, HBO, and Comcast/NBCU. Many of these companies spend billions of dollars on original content featuring iconic franchises and big industry personalities. Netflix chose a niche programming strategy to have everything anyone would need to watch. Amazon focuses on big-budget original shows for the mass market. Several others, including Disney's and Apple's upcoming platforms, and the existing streaming service HBO are more selective about the amount of content they create, while Google hit the pause button on its Hollywood expansion. In this short article, I would like to devote some space to reflections on where the future might head for video streaming.
Will Quality Win Over Quantity?
Considering all the different strategies and value propositions seen in the video streaming market, which of the players are in good positions to “win the race”? It will likely be about iconic content and financial power. In my opinion, it might also depend on how consumer behavior will be shaped by the different strategies of each service throughout the next years. Netflix's niche programming strategy might make customers wish for less and more manageable content again. Should this be the case, then Disney’s new streaming platform might arrive just about at the right time and all services that focus on a smaller selection of content might benefit. Is this maybe why Google is taking a "wait and see" approach?
How Many Subscriptions Will You Pay For?
There is more niche content than has ever existed before and it might therefore not be an “either or” decision when subscribing to streaming services. Much more it might be a companion and Netflix customers will very likely also be Disney customers. Let's develop this thought a bit further. In the United States, customers currently subscribe to three video streaming services, on average, spending about $10 per month on each. If all of the 8 streaming services seen in the companion article will become supplements instead of substitutes, will customers be willing to spend $80 per month to see all of their favorite shows across all platforms? Will they take wise decisions and give up on a part of the available content? Or will they come to the conclusion that this overly expensive and fall back on piracy?
(Inspired by articles on CTech and TheWorldNews.)
All Video Streaming Services United on a Single Platform for $9.95 per Month?
What if an aggregator came into the race and offered access to all of the subscriptions for a much lower price? This might be hard to imagine now, but would you have though a few years ago that it was possible to go to the movies as many times as you want for $9.95 per month? Probably not and MoviePass made it possible. I would like to cite Ashton Kutcher who once said that “oftentimes the foundation of great companies is extraordinarily counterintuitive.” Therefore, even if we cannot imagine it now, I believe that a new business model will be born, which unites all streaming services in a single subscription. This would help to overcome the inefficiency and transaction cost of separately paying for 8 or more platforms. The new service might, for example, allow for one binge pass per day and customers can watch Netflix today, Prime Video tomorrow, and Hulu on another day of the week, all for a single monthly fee.
(Inspired by my article about Netflix, MoviePass, and the Future of Cinema and a video on YouTube.)
Aggregators Are Already Here
As a matter of fact, aggregators are already part of the race. Not in terms of subscription transaction, but in terms of content consumption. The Google Play Movies & TV app provides information and links to 28 partner streaming services, including Prime Video, Hulu, and HBO. Notably absent, for now, is Netflix. Searching for “This Is Us”, for example, will show that the current season is available for purchase on Google Play and also available to stream on Hulu (provided you have the subscription). Also, Apple’s TV app organizes content from Prime Video, Hulu, HBO, and others that require sign-in. As these apps become more sophisticated and include voice activation, it is more and more likely that viewers will skip, for instance, the Netflix interface. That greatly reduces Netflix's ability to rely on their algorithm and forces them to market their content via external media, a much more expensive and difficult task. Will the brand of the streaming services still matter? Or will the big direct-to-consumer platforms, such as Netflix slip back to a tier-two production company making distribution deals with the new aggregator? We might not be able to imagine that yet. But we see the first signs.
(Inspired by articles on Forbes, Market Realist, and Variety.)
Feel free to leave comments and to share your thoughts in the comments below.
View original article on lwh.feed.
Film Executive Producer/Producer/ Consultant on M&A, litigation, bankruptcies.
6 年Very interesting and useful.
Streaming Media Expert: Industry Analyst, Writer and Consultant. Chairman of the NAB Show Streaming Summit ([email protected])
6 年Apple TV and Google Play aren’t aggregators at all. A place you can download a bunch of apps isn’t aggregation true OTT services.
?? Co-Founder/Lead Analyst, TVREV, ?? Author, "Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry", ??Keynote Speaker
6 年"As these apps become more sophisticated and include voice activation, it is more and more likely that viewers will skip, for instance, the Netflix interface. That greatly reduces Netflix's ability to rely on their algorithm and forces them to market their content via external media, a much more expensive and difficult task." This. Wrote something very similar in a Forbes piece last month and got many blank stares, so good to see someone else is on the same page. Have also written about the strong possibility of an app aggregator, though the vMVPDs (Hulu Live TV, YouTube TV) which are now pushing out "mesomorph bundles" of 80-100 channels at around $40-$50 month are in better position for that--they'll just add Netflix and other OTT plays into their platform which will still seem like a great deal even at $60/month, especially for families and others who need a variety of program types and would rather pay $25/month more to get 75% more options.
BrightLine agrees.