In this round-the-horn podcast edition, we discuss Disney’s Movies Anywhere triumph, the rise and rise of on-demand viewing, Amazon’s shift toward ads, and streaming sports.
Chapter 1: Disney Movies Anywhere (1:30)
Four studios have signed on to support Disney Movies Anywhere. Fox, Sony, Warner Bros, and Universal will all support Movies Anywhere. If a consumer purchases a movie from these studios in supported online stores digital a digital copy will appear in their Movies Anywhere accounts. Both Will and I agree this is a big step forward for the movie industry, and that it probably means the death of the competing UltraViolet standard.
Disc sales were down 14% year-over-year in Q1 2017, continuing a long-term losing trend. Online movie sales are not growing anywhere near fast enough to recoup the losses. Consumers may well have been reluctant to buy digital movies because they could not be sure they would be able to play the movies everywhere.
Chapter 2: Ericsson data shows growth in on-demand viewing (4:10)
Ericsson data shows the move toward on-demand viewing continues. The Ericsson data shows that the average SVOD home has 3.8 services, up from 1.6 in 2013. The percentage of consumers that agreed with the statement “I prefer on-demand viewing” increased from 48% in 2014 to 49% in 2017. The number of people saying that traditional pay TV met all their home entertainment needs fell over the same period from 35% to 26%. Finally, in the US net promoter scores for pay TV are 39 versus 58 for on-demand services.
Will says that AT&T lost 390,000 subscribers to its DirecTV satellite service in Q3. This decline seems to confirm the move away from linear TV. I am not surprised at the continued move to on-demand, but I am surprised that it seems to be a worldwide phenomenon. Even the developing world is moving away from traditional TV to on-demand viewing.
Chapter 3: Amazon Ads (13:30)
CNBC reported that Amazon is taking steps to beef up its advertising capabilities. The move could be to help Amazon Video Direct, the company’s YouTube competitor. However, both Will and I are interested to see if Amazon applies the new ad-tech approach to existing Prime Video service. It could be interesting for Amazon to introduce a free or reduced-priced tier of service with ads. I also thought allowing Channel partners to make some content available free-ad-supported could be a great way for the partners to recruit new premium tier subscribers.
Chapter 4: Turner and Amazon live sports streaming (18:00)
Turner released encouraging data on the increase in TV Everywhere usage during its exclusive coverage of the 2017 National League Division Series. The company said the number of minutes streamed increased from 3.1 million last year to 4.3 million in 2017. However, it is not clear if this is due to more streamers or the same number of streamers watching more. Data from TiVo suggests the latter.
Not as many people are watching the football games that Amazon is streaming as watched the Twitter streamed games last year. Amazon’sindifferent performance could be because the Twitter streams were available to everyone, while Amazon’s coverage is only available to Prime subscribers.
Will points out that the Amazon NFL games are available in two other places (NFL Channel and CBS) so you would expect growth in viewing to be muted. Despite the modest increases, we both agree that streaming sports is still a big deal online.
Listeners should tune in to our live webinar entitled Game On! with Akamai. We will be talking with senior executives from the streaming sports industry about their experiences. The webinar is free and takes place on Thursday the 19th at 10 AM Pacific/1 PM Eastern.