With the much anticipated launch of new streaming services Disney+ and AppleTV, and strength of upcoming competitor services in HBO and Comcast, the fight for your subscription is set to enter new heights.
Whilst it certainly makes sense for these historically traditional pay-TV model companies to enter the streaming space, it means every offering needs to continue to move hard and fast on generating more content in order to hold down their piece of the market.
Brian Wieser, Global President of Business Intelligence at the world’s largest advertising agency – GroupM, believes the amount streaming services take in subscription fees is unlikely to exceed the amount of capital required to make new content, for the next five years at least.
Wieser was quoted in GroupM’s worldwide media forecast report as saying: “There will only be so much money to go around for subscription fees. If consumers continue to increase their spending on all forms of video (which amounted to $140 billion last year for video services, cinema and DVDs) at historical rates through 2024, there will only be an incremental $20 billion in consumer spending available for new services. This is roughly equal to the amount of new spending on content that we estimate… This suggests that financial contributions from these new services will not be net positive anytime soon ”
This outlook begs the question, will streaming as we see it now continue on the same trajectory, or will something drastic have to change? Don’t forget, the early days of Foxtel/Austar didn’t have commercials either, and Comcast’s upcoming ‘Peacock’ service is reportedly considering an ad-supported version.
One possible solution would be for companies to bundle together, similar to the Disney+ offer, which pairs popular American service Hulu with ESPN+ for US$12.99 per month.
Either way you would have to assume the further fracturing of content across multiple services will create dissent amongst consumers. The launch of Disney+ saw the Nine Entertainment owned Stan lose access to Disney movies including the incredibly popular Marvel series.
Perhaps at some point consumer sentiment will swing backwards. Could a singular all-inclusive platform, paid at a premium (such as what traditional pay-TV/cable companies offer), become more appealing?
Or is the whole issue just preparing for a great migration to pirating? If so, we can say goodbye to the amount of quality content we are being provided today.
Conor Murphy is the Marketing Coordinator at TradersCircle
Latest posts by Conor Murphy (see all)
- Trading the ASX – Get your head around economic data releases - September 5, 2024
- Cost cutting is all the rage right now - September 5, 2024
- Novatti’s strategic moves pave the way for positive cash flow amidst $4m in cost reductions - January 31, 2024
Leave a Comment
You must be logged in to post a comment.