Morad Koufane’s Post

I Will Survive « Who Will Survive? How many streaming services will consumers support? That was one of the great mysteries of the nascent streaming world, and the answer is coming into focus: not very many. “Can your current business be a successful player and have long-term wealth generation, or are you going to be roadkill?” Mr. Malone mused. “I think all the small players will have to shrink down or go away.” A recent Deloitte study found that American households paid an average of $61 a month for four streaming services, but that many didn’t think the expense was worth it. That suggests the once-unthinkable possibility, many of the executives said, that there will be only three or four streaming survivors: Netflix and Amazon, almost certainly. Probably some combination of Disney and Hulu. Apple remains a niche participant, but appears to be feeling its way into a long-term, albeit money-losing, presence, which it can afford to do. That leaves big question marks over Peacock, Warner Bros. Discovery’s Max, and Paramount+. »

Good article, but the folly continues. As I wrote two years ago, updating prior posts: The Great (Streaming) War of Stupid Value Propositions -- Continued! ...the value proposition for flat-rate all-you-can-eat streaming sucks. ...They continue making an offer that is quickly refused or cancelled, to a finite number of streamers who want a full range of viewing, but with limited wallet to share among competing offerings -- thus satisfying few. This is not a problem of user behavior, or of competition, but of collective industry blindness to a failed pricing model. Few want all they can eat! We can't eat that much! We want only what we want, and don't want to pay for more. Instead, all streamers and consumers could share a much larger pie, with much higher shared value all around. Experiment with more win-win value propositions -- set a fair, bundled (volume discounted) price -- for however much or little we want each month. Offer a fair value proposition so we can subscribe, stay, and watch as we like -- not pay a flat rate every month even when we get no value at all. https://lnkd.in/eD4wfx45

I'll admit it. I subscribe to Netflix, Amazon, Disney, Hulu, Apple, Peacock, Max, and Paramount+. But the average American subscribes to 4 streaming services at an average of $61/month. Which is still a lot! There is a true streaming war, as these players fight for our attention. To survive, players will need at least 200 million subscribers (something only Netflix, Amazon Prime Video and Disney+ combined with Hulu have done) They will need to spend $50M for blockbuster hits, over and over. And they will need sports, which both attract new subscribers, and retain (at least for the duration of the season) subscribers who want to watch their teams live. There's not a lot of room for price increases, especially after the recent round--so many are looking at ad revenue as a source of growth. According to this excellent article, which anyone interested in streaming should read, the rise of ads may lead streaming services to provide lower prestige, popular content (think police procedurals and hospital dramas) mixed with some big sports events. Sounds like what we used to have with Cable. 📝 James Stewart, Benjamin Mullin #litrendingtopics #streamingwars #subscriptions

Interesting read. 🤔 Balance in the force returns. In my opinion👇🏻 BIG WINNERS: 1)Broadcast TV - the engine that drives it all. Across every daypart, genre and adult demo. (Reminded of great qoute last year from Barry Diller re what Big Studios need to do - “[They should] say, ‘We each own a great television network, fully distributed in every household in the United States. Let’s go into competition (with the big streamers) let’s not treat it (broadcast) as some yesterday’s sliver. Let’s go compete. Look, it isn’t the end of the business of hits. Let’s take some of our shows and our creativity and build our networks back up. It’s there for the take.’”) 2) MVPDs: Lesson learned. Painfully. (Consumers want to pay less. There is such a thing as too many channels. Broadcast is key!) BIG LOSER: Cable TV Networks - Duh. Inspired in the 70s, 80s & 90s w/ MTV, Nick, CNN, ESPN, Discovery, Disney Channel. Lazy corp dev/drive stock schemes after that. (Can’t count how many flawed biz plans I’ve been asked to look at - all assumed the same thing - sub fees will kick in by Yr 3 w/positive EBITDA in Yr 5/6. Actual viewership? 🤷 Does it really matter? Stop the madness. Finally.) *** Cautionary note for FAST: Just because you can make a “channel” doesn’t mean you should make a channel.

This is a buzzy article about the titans who lead the streaming companies. By the way, they are all white men, which is sort of odd in 2024. Anyhoo - some interesting takeaways for us as consumers or people selling into the streaming universe, which is all traditional TV is now. 1. 200 million is the new number. That's the number of subscribers needed to run a profitable service. Netflix, Prime, and Disney are there. 2. Ads are growing - and probably the only way to make TV work long-term. 3. The HBO model of critical successes that makes you want to pay - is declining. It's all about weekly/monthly engagement. 4. So - with that in mind. You need sports. 5. You need shows that don't win awards but are great light entertainment. 6. When the shakeout is done, all anyone knows is Netflix will be the king of the mountain. For us Canadians, it seems clear - for originals, it's highly local stuff that can scale globally, and it better be cheap. (Squid Games is the #1 show on Netflix ever - and it didn't come from the LA system). Or we can be a great branch plant economy for Hollywood—which we already are—with skilled technicians and lower overall costs. And if you care about English Canadian culture - I wonder whether something more radical is in order. No matter how well-meaning or skilled commissioners are at Bell, Rogers Communications, CBC or what's left of Corus Entertainment you can't afford many new shows. And you only get hits by making lots of shows. One radical idea - how about providing a creators fund? - similar to what Tik Tok or Youtube have offered in the past. If you're a Canadian citizen or permanent resident here's a $5000 grant to make stuff this year and try to make a go of it. If the IP goes anywhere here's a higher tier - say $20,000 - to develop it with a Canadian producer to try and sell it somewhere. We need to move to guerrilla tactics in the content wars. We ain't making aircraft carriers and ICBMS in Canada. #streaming #tv #cancon https://lnkd.in/giS__uhY

"Cable providers can see the shift happening. It’s why companies like Comcast are now taking an “If you can’t beat them, join them” approach, announcing streaming-service bundles—like a forthcoming Netflix-Peacock-Apple package—that will cut them into the profit flow. Whether they’re pivoting to meet the realities of the moment or contributing to their own eventual obsolescence remains to be seen." Comcast was quick to announce this bundle in response to the upcoming Disney-Warner Bros Discovery streaming-service bundle (as well as the soon-to-be Disney-Fox-Warner Bros Discovery sports streaming bundle called Venu Sports). #livesports #streamingbundles #sportsstreaming #netflix #nfl #comcast

Please, stop calling it cable. Cable bundled networks, and new streaming bundles are being announced by the day, but these new bundles are not replicating cable, nor are they replicated the incentivization structure, security, and limited access points of cable. Does that mean bundles are bad? Not at all. (Spoiler alert: people LOVE bundles.) But we need to be better with our verbiage. Yes, the pay TV business model was built on a collection of channels that were bundled into a single consumer product. And, yes, this corporate arrangement loosely approximates some version of that strategy. But this reductive theorizing about bundling completely ignores the key differences between the economics of streaming and pay TV. When we talk about cable we are referring to a very specific incentive structure, a very specific unified product, and a very specific relationship between supplier and distributor. Pay TV bundling, after all, was traditionally a leverage game, in which the weakest channels in a seller’s package (like Freeform or truTV) rode on the coattails of the strongest (e.g., ESPN or TNT). For distributors, it was worth paying for a few dozen barely watched networks in order to secure the ones that subscribers couldn’t live without. These days, however, the line between distributor and supplier has all but evaporated for most of the streaming juggernauts. And owning the relationship with a customer—having their viewing data, credit card information, geolocation, etcetera—is the coin of the realm. Rather than pursuing a singular focus on creating content and selling it to Charter, for example, Warner Bros. Discovery is concerned with interface technology, algorithmic recommendations, and editorial curation on homepages, all of which help the company utilize its shows and movies to attract and retain subscribers—and, over time, serve them ads. Even if some of the same players are still around, the business incentives have changed dramatically from the halcyon days of cable. To wit: In the cable era, the original differentiator was scarcity—both the limited pathways to access video content and the small number of in-demand networks that consumers were willing to overpay for to watch their favorite shows. Streaming widened the aperture by multiplying the number of pathways and flooding the marketplace with content, which made it all seem more indistinguishable. Cable companies were stable and static businesses, whereas streamers must constantly worry about month-over-month churn. Now again, that's not to suggest bundles are bad. The Disney+/Max bundle is a great idea (and an even bigger win for Disney). The Peacock/Apple TV+/Netflix bundle helps all three companies for very different reasons. And, as we all know, we as customers LOVE bundles. But please, stop calling it cable.

If it looks like cable, behaves like cable, and feels like cable, then perhaps, in essence, it is cable... While it’s technically true that streaming is not the same as cable because it uses the public internet and doesn’t require provider-specific hardware, the user experience is becoming increasingly similar. Content aggregation is occurring at the brand and service level, not the content level. You can’t open a MAX app and see Disney or Netflix content; you need to navigate through separate apps, just like switching channels in the old days of television. Moreover, streaming services initially promised a user-centric experience, unlike the old cable model. However, the shift towards bundling is a revenue and profit monetization strategy for service providers. These bundles, while offering a price benefit today, set the stage for standalone service price increases, driving users towards bundles. This move stifles competition, making it harder for small and independent services to gain traction and build larger audiences. In essence, the business approach mirrors that of cable. If it looks like cable, behaves like cable, and feels like cable, then perhaps, in essence, it is cable—just in a digital disguise.

Hub's 2024 survey reveals that consumers are indeed pulling together more than a handful of TV sources - both traditional and digital - to get what they want. In fact, this year saw a bounce back to an average of 7.4 services used, after a dip in 2023. The number of viewers "stacking" three or more of the major streamers (Netflix, Amazon Prime, Disney+, Hulu & Max) grew to half of users in 2024, with even more growth coming from the nearly two-thirds of people using FAST services (like TUBI or Pluto) to round out their TV diet. https://lnkd.in/gkfxvfS2

Amazing long form article on the streaming media at a crossroads, with industry titans like Brian Roberts, John Malone, and Barry Diller recognizing the unsustainable nature of current business models. Here are the key takeaways: 1. Legacy media giants like Paramount, Warner Bros. Discovery, and Disney are struggling financially, while disruptors like Netflix and Amazon thrive. 2. The magic number for profitability in streaming is at least 200 million subscribers, with Netflix leading the pack. 3. Costs for content production and sports programming are soaring, creating significant financial pressure. Opportunities: 1. Bundling services can attract price-sensitive consumers and reduce churn. 2. Advertising-supported tiers offer new revenue streams and potential growth. 3. Licensing content, as demonstrated by Sony, can be a profitable strategy without running a streaming service. Challenges: 1. Achieving profitability requires massive investments in content and sports rights. 2. High churn rates and subscriber acquisition costs are ongoing issues. 3. The industry may consolidate, with only a few major players likely to survive. The future of streaming hinges on balancing quality content with financial viability. Innovation and strategic partnerships will be crucial for navigating this evolving landscape. #Streaming #MediaIndustry #Netflix #AmazonPrime #Disneyplus #WarnerBros #Paramount https://lnkd.in/gu-pY6ew