We discuss the Streaming Wars on CNBC & the latest from the trenches
Updated: Aug 20, 2019
How the Streaming Wars Will Change TV Forever
For decades, the cable bundle has been the center of the media and television universe. In the next 18 months, the focus will fundamentally change -- perhaps for good. Apple, Disney, NBCU and WarnerMedia will all launch streaming video services to compete with Netflix, who’s had a decade-long head start and more than 151 million customers worldwide; Amazon, who has more than 100 million Prime subscribers, though they have never revealed how many use its Prime Video service; and Hulu, which is now controlled by Disney, which has more than 28 million subscribers
The cable bundle’s ever-rising cost and the rich valuation of Netflix have pushed the biggest companies in media to start focusing on direct-to-consumer distribution. But there may not be enough money in consumers’ pockets to make every new streaming service successful.
Welcome to “The Streaming Wars”.
Trouble in paradise. Major U.S. pay TV providers lost a combined 1.53 million subs during the second quarter, more than any previous quarter, and the fourth consecutive quarter of record pay TV net losses.
And the future ain’t pretty: Nearly 25% of households will ditch traditional TV by 2022.
Straight killin’ it! Roku announced its active accounts has reached 30.5 million with ARPU up $2 quarter over quarter and up 88% since its IPO two years ago. In addition, Roku users are spending an average of 3.5 hours per day streaming video on the platform.
Did you know? 73% of all Roku sales comes from Amazon, Best Buy, & Walmart
A rocket boost. Pluto TV reaches 18 million monthly active users, up 50% on the year. For context, it counted 12 million actives in January, when they were acquired by Viacom, and 16 million 16 million in May.
Let’s get together. The boards of CBS and Viacom met over the weekend trying to hammer out a price at which the two companies shares will be exchanged in order to complete a long-anticipated merger.
It’s cool and all, but...On Disney's fiscal Q3 call last week, CEO Bob Iger said that customers will be able to subscribe to Disney+, ESPN+, and the ad-supported version of Hulu, all for a package price of $12.99 beginning on Nov. 12.
Combining Disney+ and ad-supported Hulu will cost you $12.98, so they’re basically giving you ESPN+ (formerly called ESPN Insider) for free. Nothing against the ESPN+, but everyone knows all the best ESPN sporting events air on ESPN, ESPN2, ESPNU and the existing cable and satellite channels.
ESPN is in an awkward position. They’re rapidly losing pay TV revenue (and profit) while simultaneously attempting to transition to a streaming sports company. Right now the result is they are losing substantial money on streaming while slowly bleeding out their profits in cable and satellite.
Ultimately Disney wants everyone to keep their cable and satellite subscriptions and also subscribe to ESPN+. That my friends, is a tough sell. Here’s a first-look at the Disney+ beta.
Streaming wars aren’t just being fought in the U.S.. Latin America’s biggest production company, Brazil’s Globo, is vowing to never sell its shows to Netflx and built a massive state-of-the-art studio to create content for its own platforms, including GloboPlay, which is ad-supported and costs about $5 a month. Netflix’s growth in Brazil is significant and now counts as it’s #2 foreign market, behind the U.K.
Veux-tu te battre avec moi. French regulators gave the green light Monday to plans by the country’s heavyweight broadcasters to launch a joint streaming service, Salto, to fight global giants Netflix and Amazon.
The little streaming service that could. Britbox now has over 650k subscribers and churn is in the single digits. Its President Soumya Sriraman’s Q&A on how the compare will fare in the Streaming Wars.
THE STREAMING ARCHIVES
Before Locast and Aereo, startup Zediva launched a streaming service in 2010 that skirted around a legal loophole to allow customers to watch newly released movies on their internet-connected devices.
How it worked
“We don’t rent digital copies of a movie,” founder Venky Srinivasan told Rotten Tomatoes, “Our users rent a physical DVD, along with a DVD player from us for a fixed amount of time. They then control that DVD player remotely over the internet — and stream the movie privately to themselves. Think of it as a really long cable and a really long remote control.”
The following year, the Motion Picture Association of America announced that Zediva agreed to close down permanently and to pay the studios $1.8 million and end its court battle with Hollywood.
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