Posted: By Andy Marken 03.19.20
|Source - Too Much, Too Soon," Warner Bros.|
“The rich have nothing to offer each other.” — Lincoln Forrester, “Too Much, Too Soon,” Warner Bros., 1958
Can’t you just see it?
John Barrymore fearlessly whacking his path through the jungle with his super sharp machete … whack, whack, whack. His bearers and team quickly following because they’re in the heart of pygmy warrior country. Barrymore is driven to find the treasure at the end of the treacherous path … whack, whack, whack.
Then. silently–almost imperceptibly–you hear this whooosssshhhiiiittt and his best friend falls dead in his tracks with a poison dart protruding from his neck. Even though the uncertain, dangerous trip Barrymore is on is worth the risk, he doesn’t have a clue on how to get there and what he’ll ultimately find.
That’s the way it’s been since we shaved our cable service (with a phone call, not a machete).
Thanks to our kids, we think we’ve signed up for every streaming service we’ll need, taken every path, explored every option. Not because we want all the stuff they’re offering…we don’t.
|Source - Parrot|
Mix ‘n Match—Facing the possibility of reaching a global audience, OTT services don’t want to be identified as a single genre content provider. They’re focused on offering a range of content that is of interest to their specific target audiences. Fortunately, with all of the available data content, creators and producers can focus on films/shows that satisfy viewer interests.
No, we like a couple of shows on Netflix, a couple on CBS All Access, a couple on Amazon Prime, a couple on Hulu, a couple on Apple TV + (daughter’s pick) and a big number on Disney +.
Leftover from the old days, there are a few shows on CW, OWN and some others of “interest.”
But then, there’s a big problem. We’ve got more “jeezz, that’s a show/film we’ve gotta’ see” than there are hours in a day!
Now instead of one neat central location and a bill to match; we have a bunch of different locations, a lot of wasted time to find just the content we want to watch … and a daunting bill to match.
And streaming is better?
If you thought the old UX (user experience) with the cable sucked, the new streaming search “freedom” will drive you around the bend.
You used to click up/down, get to a new channel to see what was available and decide go/no go. If you wanted old stuff, there was a place you could go and rummage through everyone’s library of content. Yes, you seemed to waste a lot of money for stuff you would never watch, but it was convenient. And, you only had one UI (user interface) with an easy-to-follow set of selection options.
But with hundreds of streaming video services per country, WW consumers are signing up for a dizzying range of subscription and ad-supported video streaming services. And if you’re willing to juggle a bunch of subscriptions, you’ll eventually find something to watch.
Everyone is its own silo.
Theater attendance has always been the first place to find original content (until the pandemic); but with the growing investment in OTT productions, global OTT subscriptions are estimated to grow to $46B this year, compared to box office revenues could plummet, according to Ampere Analysis.
To monetize content as rapidly and broadly as possible, content distributors have reduced the time between theatrical showing and OTT streaming—often to zero—which has hurt theater attendance.
|Source - m_velo|
Theater First – All content creators want to see their work on the big screen and they want audiences to see it there even more. At the same time, OTT services want to rush original content to their audience to attract more subscribers. The result? Theater attendance is off.
To offset attendance shrinkage, they increased ticket costs. They found in Australia, France, Germany, Japan, Netherlands, Sweden, Turkey, USA, and the UK; the average theater ticket price is just a little higher than one month’s SVOD subscription.
Even in the two markets with the lowest theater attendance—Japan tickets are double the average SVOD price and in Germany, they’re 50 percent higher.
But the real rise of streaming and cord-cutting is the way consumers are engaging with their content. According to Nielsen, more than two-thirds of US homes have devices—TV, computer, tablet, smartphone, game system—that can stream video.
|Source - Digital media trends survey, 13th edition|
Multiples – Since no single streaming service meets all of a subscriber’s viewing needs or entertainment activities, people tailor their own selection from multiple services. How many is too many will be tested in the year’s ahead.
And, according to Ampere, more than half of the folks watch OTT content on-the-go or on mobile devices.
It’s projected that there will be more than 777M global SVOD subscribers by 2023, more than double the 368M in 2017.
Despite the increased competition from just about every corner, Netflix still leads the pack and estimates it will have 368M subscribers by 2023 with 351M being in APAC. Even with Disney+ coming on strong, Netflix has an established viewership base with 90 percent stating that they will stay with the network despite the new launches.
China will add 235M subscribers with three services dominating the market—iQIYI (backed by Baidu), Youku-Tudou (backed by Alibaba), and Tencent Video.
The upside for the content creation industry is the seemingly insatiable demand for new, original content and that all of the services are investing in new material across the genre spectrum.
With the acquisition of Fox, Disney is investing nearly $24B in content next year, while Netflix will continue its strong investment of nearly $15B. And, while Amazon will continue to invest about $7B in fresh new content this year, Apple will slowly expand its offerings with about $6B.
Comcast’s acquisition of Sky resulted in nearly $21B spent in original and acquired content last year and the projection is for nearly $25B this year.
AT&T is struggling to figure out how it will price and package its 14 different OTT services but John Starkey, entertainment group head, made it clear to HBO folks to be prepared and that change will happen.
Rather than focusing on high-quality, unique scripts that have been serious contenders for Oscars and Emmys, he advised staffers the content creation pace would increase … significantly.
Regardless of existing libraries, the consumer demand for new content appears insatiable. Last year saw a record 495 scripted shows available to audiences in the U.S., up from 487 the year prior. Streaming services released 160 original pieces, compared to broadcast’s 146 and cable’s144.
This year, it is estimated that nearly 550 originals will have been produced/released. It really is the Golden Age of Television.
There are more great shows being made, more competition for eyeballs and ultimately, greater demand for creative talent output, than ever before.
“Established” OTT services and new entries in the Direct to Consumer (DTC) M&E arena from studios and indie filmmakers/content producers around the globe will drive a lot of this growth.
Production of originals in Europe, India, Australia, and other emerging content centers continues as countries require streaming services to have 30 percent of their content locally produced. This has led to the leading OTT services targeting international growth to also sub and dup the content for airing in other countries … very successfully.
The challenge is that all of the streaming players know their service is superior and will be one of – if not the – service people will sign up for regardless of the content or cost.
All of the OTT services are testing payment options including ad-free subscriptions and ad-supported entertainment. The key is the value to the consumer.
- Most people (70 percent) believe that there will be too many streaming choices and 87 percent worry that individually and together they will become too expensive to keep up.
- After cost, the biggest frustrations are the need to toggle between services (67 percent), account setup and management (58 percent) and the inability to find content easily (45 percent).
- Still, people are willing to accept some form of an ad-supported model (44 percent) compared to a subscription-only model (56 percent) if advertisement alleviates service costs.
- Consumers are attracted by originals but over time, they value library content more. Almost all respondents (90 percent) characterized it as “important” or “very important.” This compares to 68 percent who shared the same feeling about originals.
Kevin Westcott, Deloitte Vice-chair of US M&E, recently noted, “Consumers now enjoy unparalleled freedom in selecting media and entertainment options and their expectations are at an all-time high.”
Yes and no.
Consumers have complained for years that they want à la carte video content, and now they sorta’ kinda’ have it.
The challenge, which streamers don’t really appreciate, is that they are delivering up a bundle of their content--even though consumers only want one or two shows.
Check any of the stuff you really want to watch.
See, The Morning Show, The Marvelous Mrs. Maisel, Modern Love, The Boys, Black Mirror, Bird Box, South Park, Family Guy, My Neighbor Totoro, Friends, Big Bang Theory, GoT prequel, The Mandalorian, High School Musical, and you can probably add 10 to 15 more.
Now that’s à la carte. That’s what people really want! Not hunting, bouncing from app to app, screaming and hollering to find the desired entertainment.
And the new siloization will probably make pirating more desirable, even if you’re against pirating. For example, about a month ago we caught up with our son as he was watching a show we thought was interesting.
Asked which of our services it was on.
Netflix? No. Hulu? Nope. Amazon Prime? Sorry. HBO Now? Duuhh. Tubi? No. What then?
Got it off Pirate Bay. There is a segment of the population, responding to the frustration of searching through a number of apps to find the specific show or film opt for pirating it. As the landscape further fragments and individual rates go higher People will rationalize they have already invested too much already in the search.
Where did we go wrong?
In fact, according to Broadband World News, because of the rise in OTT streaming, pirating will double. They figure that 30 to 50 percent of the stuff you want to watch won’t be on your SVOD.
Have the streaming services taken the time to check out the pirate sites? The UI is great, listings of movies/series top-notch and everything—yes, everything—is listed in one location … no hunting, searching, wondering.
In other words, they do it right!
Now, we’re not advocating folks blow off their subscriptions and go rogue. But how do we ensure consumers get the dream – anytime, anywhere, any device – and those content creators, distributors, and services are fairly compensated?
To get us on the right track, we talked with Allan McLennan, Chief Executive of PADEM Media Group, who recently led a panel at Streaming Media West that tackled the subject head-on.
He spends a lot of time reviewing the issue worldwide and has direct experience of possible solutions.
“We’re in the early stages of subscription fatigue,” McLennan noted. “In a remarkably short period of time, the industry key players have created an embarrassment of outstanding content and everyone is rushing to be the industry leader so everyone else will ‘have to’ negotiate with them to reduce their costs and increase their viewership opportunities.
“The goal of new services is to offer value, not just selection, he continued.
Value, he emphasized, comes in a number of colors in straight-forward, all-you-can-watch subscriptions; and in some global markets, there’s an option for a three-tiered service that includes a choice of a primary OTT service and a group of ad-based niche channels along with open, straight OTAs.
|Source - Parks Associates|
How Many – Today’s OTT subscription viewer is being enticed and tested regarding how many services are too many and when they are willing to forgo another subscription simply to get a specific show or movie. No one knows where the limit of home services per household will be reached.
McLennan added that based on the individual organization’s total business strength (management team, experience/expertise, and long-term commitment in the M&E arena), all of the options will be explored by the services. And all of them will ultimately find the place where they best fit in the OTT industry and where they best provide viewer value and satisfaction.
“Over the next few years we’ll see a lot of second- and third-tier content developer/provider mergers;,” McLennan said, “but there will be even more business/strategic alliances developed as players realize how to best leverage their expertise and strengths to drive both growth and secure audiences
“It won’t be long before there will be three or four primary aggregated delivery services that consumers will select from,” he added. “From there, they’ll select the content from hundreds of sources effortlessly with the assistance of AI selection tools that provide just the right entertainment the person wants/needs at the time. This will become the new battleground and the best opportunity for the long run.”
Expansion will continue globally throughout 2020, which will potentially produce new licensing deals that could be very “interesting.” For example, Disney+’s existing distribution deals are with Pay-TV providers; and the company will most certainly negotiate with new and existing partners to buy back rights early on an exclusive or non-exclusive basis.
|Source - "Too Much, Too Soon," Warner Bros.|
It’s a brave new world for Pay-TV operators as well as Disney+, Netflix, Amazon, and others as the industry enters new and uncharted territories.
Frankly, we can’t wait for the leaders to take care of all of the messy work so we can focus on our entertainment rather than how to find it.
As Diana Barrymore said, “I don't want to write a book about my life. Living it was bad enough!”