Not-So Streamlined Streaming

By: Patrick Macher

The year is 2000 and I just woke up and ran down the stairs to sit in front of the TV for the next 2 hours. If I was lucky, a new Yu-Gi-Oh or Pokémon would be released, and I could watch as long as my parents let me skip my brother’s basketball game. During the early commercials I would pour a bowl of frosted flakes, and at the noon conclusion of my favorite morning, I would eat a handful of zebra cakes. Today’s kids will never experience the rush of a Saturday morning release because all of their content is just a click-away.

 

In November of 2018, Disney CEO Bob Iger announced the companies’ plan for a new streaming service called Disney+ (“Disney Plus”).[1] In the coming months, Disney+ would gather subscribers, accumulating more than ten million customers by the first week of launch.[2] Investors credit Disney+ for a return of almost 30% on Disney stock through November, 2019.[3]

 

Rewind the clock twenty years to when Cable and Satellite TV companies were fighting for the same market space, a space that had few competitors.[4] Dish, DirecTV and EchoStar battled for customers while providing almost identical products.[5] The companies provided very little on-demand content, as viewers were limited to the scheduled programming on the channels to which they subscribed.

 

Return to the year 2019 and the market has completely changed. Cable and Satellite TV companies hemorrhage customers as the phenomenon of “cord-cutting,” or suspending the traditional TV services, has become a fad with young consumers.[6]

 

The majority of Americans subscribe to at least one streaming service, while the average streamer is now subscribing to three separate platforms.[7] American consumers are exercising more control over the content for which they are willing to pay.[8] Ten years ago, a college football fan may have purchased an extravagant sports package through their TV provider to hopefully watch their teams regular season matchups. Today an ESPN+ account allows fans to live-stream the majority of games even from their mobile devices.[9]

 

In 2007, Netflix announced that it would offer PC streaming in addition to the mailbox subscription service the company had been founded on.[10] Today the market has been flooded with a plethora of streaming services including Netflix, Apple TV, Amazon Prime Video, Hulu, HBO Max, ESPN+ and now Disney+.[11]

 

Streaming giants such as Netflix and Amazon Prime have known for years that the key to maximizing profitability in the streaming world is creating original content.[12] Original content establishes a high-level of control for the streaming platforms and avoids headaches such as international content rights and content contract disputes.[13] Netflix achieved great success with their series Stranger Things, but has struggled to create additional content with the notoriety of the Disney products.[14]

 

Disney’s decision to enter the streaming market comes with an inherit competitive advantage, as Disney owns the rights to the content it will be offering.[15] Disney owns the Disney classics many streamers grew up with such as Beauty and the Beast and 101 Dalmatians, but has also, through the years, purchased the rights to cinematic giants such as the Star Wars and Marvel series.[16]

 

With Disney’s emergence into the streaming market, many investors feared that Netflix and other leading platforms would suffer substantial market losses, but after the first week of Disney+, it seems investors are optimistic that multiple streaming platforms will be able to co-exist.[17] Netflix bounced back from predicted losses in the first week of Disney+, climbing 2.6% on the week, but Disney stock soared 8% following the first week of Disney+.[18]

 

The question seems to have taken a fundamental shift from should consumers have a streaming service, to which streaming services should consumers carry. Sports, cartoons, movies, classics, the options seem almost limitless. However, one thing has remained constant, at the end of whatever show you are watching, on whichever platform you choose, have a couple zebra cakes.

 

 

[1] See Cynthia Littleton, Bob Iger Talks Disney+, Hulu Plans and His Vision for Enlarged TV Studio, Variety (Nov. 8, 2019) https://variety.com/2018/digital/news/disney-disney-streaming-service-launch-2019-1203023789/

 

[2] See Daniel Strauss, Disney Shares Spike After Company Announces Disney Plus Surpassed 10 million Sign-Ups Since Launch, Markets Insider (Nov. 13, 2019) https://markets.businessinsider.com/news/stocks/disney-stock-price-jumps-on-disney-plus-sign-up-count-2019-11-1028686618

 

[3] See id.

 

[4] See Dish Network, J.D. Power Ranks Dish Network No.1 in Customer Satisfaction; EchoStar Ranks Ahead of Cable, Satellite Competitors in Overall Customer Satisfaction (Sep. 1, 2019) https://ir.dish.com/static-files/87451047-7c28-4721-a9cc-dc4e49db41bb

 

[5] See id.

 

[6] See Jon Brodkin, Cable and Satellite TV Sinks Again as Online Streaming Soars, ARS Technica (Mar. 7, 2019) https://arstechnica.com/information-technology/2019/03/cable-and-satellite-tv-sinks-again-as-online-streaming-soars/

 

[7] See Dennis Sellers, There’s a Massive Consumer Shift Toward Streaming Video Services, AppleWorkd.Today (Apr. 13, 2019) https://www.appleworld.today/blog/2019/4/13/theres-a-massive-consumer-shift-toward-streaming-video-services

 

[8] See id.

 

[9] See Sara Jane Harris, How to Find ACC Network: TV Channels, Live Stream, Watch Online, Sporting News (Sep. 07, 2019) https://www.sportingnews.com/us/ncaa-football/news/how-to-find-acc-network-tv-channels-live-stream-watch-online/1kkk677chbhfb1lb2j865wch9f#live-stream

 

[10] See Miguel Helft, Netflix to Deliver Movies to the PC, New York Times (Jan. 16, 2007) https://www.nytimes.com/2007/01/16/technology/16netflix.html?mtrref=en.wikipedia.org&gwh=7D248A0F0C9318DB726094B71284A484&gwt=pay&assetType=REGIWALL

 

[11] See Alex Sherman, Disney+ isn’t Really the Beginning of the Streaming Wars – the Next Year is Just a Warm-Up, CNBC (Nov. 16, 2019) https://www.cnbc.com/2019/11/16/disney-plus-streaming-wars-just-warming-up.html

 

[12] See Brian Barrett, Amazon and Netflix Look to Their Own Shows as the Key to World Domination, Wired (Dec. 12, 2016) https://www.wired.com/2016/12/amazon-netflix-look-shows-key-world-domination/

 

[13] See id.

 

[14] See David Trainer, Netflix’s Original Content Strategy is Failing, Forbes (Jul. 19, 2019) https://www.forbes.com/sites/greatspeculations/2019/07/19/netflixs-original-content-strategy-is-failing/#243bb62b3607

 

[15] See Dan Jackson, Everything We Know About Disney’s New Streaming Service, Thrillest (Oct. 15, 2019) https://www.thrillist.com/entertainment/nation/disney-streaming-service-disney-plus

 

[16] See id.

 

[17] See Noel Randewich, One Week In, Netflix’s Stock is Weathering Disney+, Rueters (Nov. 19, 2019) https://www.reuters.com/article/us-streaming-stocks/one-week-in-netflixs-stock-is-weathering-disney-idUSKBN1XT1D8

 

[18] See id.

 

image source: https://www.polygon.com/2019/11/11/20959171/disney-plus-shows-movies-subscription-pricing-news-devices-and-more