Streaming wars? Whatever… anything is better than real ones.

In less than a year, four major OTT services will be launched in the US: Disney, Apple, HBO, NBC in addition to the already established Netflix, Amazon Prime Video and Hulu.
At a smaller scale, a host of other media, content, and sports properties are also entering the market of direct-to-consumer OTT.

Let’s look at the US where the case is stronger and data are more widely available, that does not mean we can apply the same reasoning to Europe or Asia, very different markets both structurally and by nature of audience behavior.

In brief, after some years of debating the new model arrival (cord-cutting, OTT, cable, satellites, decoders, direct-to-consumers) and most being cagey about a real impact, 2020 could be the year.

The impression is that the offer may become bigger than the demand, but I personally think it’s too early to judge and the first signs after the Disney+ launch are that Netflix was not impacted.

In any case, a super exciting place to be in this next decade :)

[The below is based on and/or extracted from a Business Intelligence recent report, get a subscription if you would like to have the full report. Great service overall!]

The contestants

  • Netflix
    Netflix will remain dominant but will become increasingly reliant on international subscriber growth. Netflix’s domestic growth will slow further due to market saturation and major new entrants likely draw interest.
  • Amazon Prime Video
    Amazon Prime Video will remain among the top subscription video services whether or not it tries. Amazon Prime Video’s sub base will remain massive, largely due to being bundled with Amazon Prime, which currently has more than 100 million members.
  • Hulu
    Hulu will increasingly become a sub-brand of Disney, with most of its future subscriber growth delivered on the back of Disney’s SVOD bundle with Disney+ and ESPN+. While we expect Hulu to succeed based on new originals and FX content, Hulu’s growth will be increasingly dependent on its newfound position in Disney’s $13-a-month SVOD bundle.
  • Disney+ (Walt Disney Co.)
    Disney+ subscriber growth will exceed internal expectations sooner than expected, hitting at least 60 million subs in its first year on the market. Consumer awareness of Disney+ is significant, and we expect that interest to continue to translate into rapid subscriber uptake: 43% of US respondents said they would subscribe to Disney+ as of mid-August, two months prior to launch, per UBS. That will surge as Disney+ aggressively expands in international markets, including Western Europe and Southeast Asia through 2020.
    Advantages: globally recognizable IP; broad distribution; rapid international expansion; ability to bundle with Hulu and ESPN+ domestically; cross-ecosystem marketing synergies.
    Disadvantages: investment costs; forgone licensing revenue; the potential impact of fragmentation among its standalone services.
  • Apple TV+ (Apple)
    Apple TV+ will surpass Netflix to become the largest global SVOD in terms of subscribers. Offering Apple TV+ free for a year with any new device purchase could independently deliver over 100 million subscribers within its first year on the market, if even 50% or more of expected iPhone unit shipments in 2020 result in a consumer taking the free service, per Barclays.
    Advantages: Massive global distribution network; exclusive all-original content; enormous cash reserves; bundling with hardware. Disadvantages: limited content volume; no reputation as a content producer.
  • HBO Max (AT&T/WarnerMedia)
    HBO Max will initially benefit from the transfer of existing AT&T customers and HBO subscribers, but it will struggle beyond that.
    HBO Max’s primary struggle and overall imperative will be adding subs beyond those who already subscribe to HBO.
    Advantages: HBO brand strength and existing IP; HBO’s existing customer base; AT&T’s customer network; WarnerMedia’s asset portfolio. Disadvantages: price point relative to rivals; unclear value proposition; challenging international expansion.
  • Peacock (Comcast/NBCUniversal).
    Advantages: access to high-value shows; large existing customer base; ability to stream live TV content, potentially including sports. Disadvantages: cannibalization fears; advertising in an on-demand streaming environment; comparatively limited content volume.

The war on what?

What is the war about? Money? Customers?
I think that is more sophisticated than that.

If the contention is the issue there will be contention beyond the number of users you can attract:

  1. Customers
  2. Attention of customers
  3. Advertisers
  4. Content
  5. Talents
  6. Funding
  7. Going international

WarnerMedia CEO John Stankey said last year
“We need hours [of engagement] a day. It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.”

Saturation?

Let’s see what the first research is telling us in terms of saturation of the market.

@CDM / Chief Evangelist @deltatre