The streaming wars are really heating up. While Netflix maintains its stronghold—significantly increasing subscribers in Q3—analysts predict that most subscribers will hang on, with some opting to become multi-streaming subscribers. Still, the looming launch of legacy media brands into the streaming video space promises to considerably shake things up for the advertising industry.
Game-changing arrivals of new or expanded stand-alone streaming T/V (Television/Video) services from TV/Movie Studio behemoths of the past commence November 1, 2019, and continue through 2020. This marks a sea change for both ad-supported and ad-free live streaming and SVOD (Streaming Video on Demand) platforms, with Apple TV+ arriving November 1, 2019, Disney+ on November 12, 2019, and with AT&T Watch TV, HBO Max, NBCU/Peacock##, AT&T WarnerMedia and Discover/BBC landing in 2020.
New Services are highlighted in blue. Existing platforms are in black.
|Format||Ad-Free (like Netflix)||Ad-Free for Extra $||Ad-Supported (FF largely disabled)|
|SVOD Only:||Apple TV+, $5/mo.
HBO Max, $15/mo.
Amazon Prime, $9-13/mo.
DC Universe, $8/mo.
HBO Now, $15/mo.
|Amazon iMDB TV, free
Hoopla (local Libraries), free
Kanopy (local Libraries), free
Vudu Movies on Us, free
Live T/V and SVOD:
|Hulu + Live TV, $51/mo.
CBS All Access, $10/mo.
|AT&T TV*, $60-83/mo.
Discovery/BBC, $ TBD
WarnerMedia#, $ TBD
AT&T TV NOW**, $50-75/mo.
AT&T Watch TV***, $15+mo.
CBS All Access, $6/mo.
Hulu + Live TV, $45/mo.
Roku Channel, free
Sling TV, $25-55/mo.
Sony Playstation Vue, $50-65/mo.
YouTube TV, $50/mo.
|Live T/V Only:||Pluto TV, free|
Is Netflix in Trouble?
The answer shifts back-and-forth. Because Netflix’s depth of quality content, commitment to bringing new quality content out constantly through multi-billion-dollar investment in programs like Stranger Things, BoJack Horseman, House of Cards, etc. without advertising, Netflix previously predicted there won’t be a lot of subscriber cancellations. (Consumers may add other subscriptions but aren’t letting go of Netflix.) On the other hand, Disney, Apple and WarnerMedia/HBO Max bring deep archives and are constantly investing in new, quality content and are ad-free as well, so CNBC recently reported that Netflix has started to prepare the marketplace for possible erosion. The answer is likely a small loss of subscriptions for Netflix, especially given their recent rate hike.
Will the New Services Succeed?
Consumer wallets will decide this, though because of the large number of subscription streaming entries flooding the marketplace, there will be failures, especially given the need to compete on programming ad-free, and the huge investments needed. Those poorly funded will likely be absorbed or bypassed by the “haves.”
What About Ad Tech?
With so many recent and new subscription streaming services competing in the “SVOD/Ad-Free” upper left box above, is advertising on the downswing? The role of advertising in paying for content is not going away; in fact, services like Hulu which are built on a dual-revenue stream of subscriptions and ads are built to last.
Though it’s unlikely that Netflix will ever add advertising to its revenue mix, others like Disney, Amazon and Apple who are already in the advertising business, are likely to explore dual revenue stream models a la Hulu (e.g. ad-free tiers) once Netflix has survived the challenge.
However, advertising will need to be less intrusive and demanding of consumer time and attention, so it will look different on these future platforms, as already seen with Hulu’s scaled back ad load and options for consumers to pay more for no ads.
What About Ad Ops?
Managing never-ending change has been and will continue to drive Ad Ops, and the more consumers move to consuming content over the internet and expect to pay low or no cost, the greater role Ad Ops will play.
It will continue to be about new and adaptive ways to manage how media is paid for. A big change will be that subscription and advertising payments/delivery will in many cases co-exist and need to be balanced on a single consumer ordering/delivery interface. As Ad Ops expands to embrace more revenue operations, the roles of ad inventory/subscription order management, trafficking, billing, yield management and testing, vendor management, data management, privacy management, technical operations and reporting all will grow and need skilled operators.
A glance upward to the November sky reveals that this new season of media migration is like none in recent memory. It marks the beginning of a dramatic, exciting and challenging new era for the entire media industry.
New/Coming Soon Services – Consumer Reports 3.
* Expanding from 10 mkts to national in 2020
** AT&T TV NOW was formerly Direct TV NOW. Need Set Top Box (10 mkts in 2019)
*** AT&T Watch TV provides limited channels for cellular customers
# WarnerMedia – new HBO-based service from AT&T subsidiary is also expected to hit by end of 2020
## NBCU/Peacock Service launch in April 2020