Looking ahead to big streaming service launches this year from Apple, Disney and WarnerMedia, a panel of providers at NAB Show said the overall market will likely keep growing but everyone competing in it had better be at the top of their game.
Apple, Disney and WarnerMedia “better be hoping the market gets bigger,” Brett Sappington, senior director of research at Parks Associates, said. “If not then they’re going to have to steal share away from some pretty big companies.” Netflix and Amazon, to name two of those big incumbents.
Adam Lewinson, chief content officer of ad-supported VOD provider Tubi, said his company’s research indicates people would like to have just one paid app to use for subscription VOD services. “Maybe two, but not four,” he said. “Subscription fatigue has definitely set in for SVODs.”
People who never had pay TV or who were looking for a reason to cut the cord have probably already done so, said Mitch Weinraub, the director of product development, AirTV, and director of advanced video products, Dish Network. Optimistically, though, he said: “Now there’s a whole second third and fourth set of customers who are waiting to be convinced that they can successfully cut the cord, that they can live without a whole subscription package, the traditional ones we know. I think there’s a lot of growth left. I think it’s just going to migrate into other customer segments.”
As for Apple, Disney (with its planned Disney+ service) and WarnerMedia, Lewinson said you can’t count any of them out. But, the direct to consumer business is challenging, because of high customer churn and the need to build subscriber scale. “In terms of SVOD services, they’re going to have to steal other people’s lunch money. I think there is going to be a limited bandwidth, he said. “They’re not all going to be able to walk in and get the subs that they need.”
Lewinson and others on the panel pointed to the high opportunity cost for Disney in taking valuable content off the licensing market, such as withdrawing Marvel studio movies from Netflix.
If Disney+ can’t reach predictions such as one forecast of about 23 million paid subscribers by 2023, Sappington said, “they probably are undershooting what they think they can do.” Analyst projections for Disney+ have put it at around 30 million by the end of 2023 or, in the case of a new Morgan Stanley report, the end of 2024.
Lewinson was optimistic about the AVOD sector, and Weinraub said Dish (parent of Sling TV) believes "most American consumers want both VOD and live TV” in their main streaming service. Nii Addy, head of marketing for skinny-bundle provider Philo TV, said the AVOD or low-cost providers in the streaming space have an opportunity to position themselves with differing value propositions.
Alan Breznick, Cable/Video Practice leader at Light Reading, moderated the April 9 panel at NAB Show’s Streaming Summit. Pictured above, from left: Breznick, Addy, Lewinson, Sappington and Weinraub.