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Four online video trends show continued rapid expansion

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The online video bonanza is far from slowing down. Here are four trends, with examples from just the last week, that show the market remains a hotbed of investment and innovation.

Investors still see opportunity in online video

If you think the expansion in online video is slowing, think again. Blum Capital Ventures and TimesSquare Capital Management have invested $140 million in factual streaming service CuriosityStream. The money will go toward expanding the existing 2,000-title show catalog, improving content discovery, and expanding internationally.

CuriosityStream’s chairman and founder John Hendricks summarized the services opportunity while speaking at the Television Critics Association (TCA) winter press tour. Mr. Hendricks sees online video services battling it out for limited consumer dollars in one or more of four broad genres: movies and scripted content, sports content, factual, and general entertainment. CuriosityStream recently cut its subscription price from $5.99 a month to $2.99 in a bid to dominate the factual category. Mr. Hendricks believes the lower price point gives his service another advantage:

John Hendricks CuriosityStream

John Hendricks, CuriosityStream

“For us, we want to be priced so that we can layer on top of these offerings very inexpensively because the consumer doesn’t have an endless budget.”

He also thinks the lower price gives CuriosityStream the option to partner with streaming giants in the other categories in the future.

Content spending at Netflix and Amazon not slowing down

Netflix has started production of its first Dutch original series, called Ares. The show focuses on a world of wealth and power enshrined in a secret student society built on secrets from the countries past.  Last week, Netflix gave the green light to three German-language movies. Netflix has already had success with two German series, Dark and Dogs of Berlin.

Amazon Prime Video is also expanding content availability in Europe. It has struck a licensing deal with Italy’s Leone Film Group to help it catch up to Netflix, which is well ahead in the country. The deal gives Amazon exclusive access to Leone’s movies in the pay TV window for the next 30 months.

EU FlagNetflix and Amazon Prime Video are both dealing with new European rules stating that 30% of their content available in Europe must come from within the EU. Though the rules are not yet in force, and the exact requirements are not clear, expect both companies to increase production and licensing of content in the EU.

Premium TV continues migration online

Sam Toles MGM

Sam Toles, MGM

Sam Toles, SVP of Digital and New Platforms at MGM, said the company would expand distribution of EPIX after the company gained control of the service. This week he made good on his promise. MGM owned EPIX has launched a streaming service in the US called EPIX Now. The $5.99 a month service is available on Android and iOS devices and Apple TV. Roku and Amazon Fire TV support will follow soon. The service will provide access to movies and Epix original series, some of which will be available in 4K ultra-HD. As well, subscribers can watch the four Epix live linear channels.

Meanwhile, Epix’ bigger rival HBO is continuing to expand its direct-to-consumer relationships in Europe. The WarnerMedia brand has launched a dedicated service in Portugal. For a very aggressive €4.99 ($5.65) a month, subscribers can get access to full seasons of HBO and third-party content it licenses. Consumers can find the service at hboportugal.com. HBO has also struck an exclusive operator distribution deal with Vodafone. It is unclear what impact the DTC service will have on HBO’s existing distribution deal with pay TV operator NOS.

Old TV models work fine online

It turns out that a company doesn’t have to launch a DTC service to monetize its content catalog fully. It can use a model that has worked in the television industry for decades, license the show and retain the intellectual property. Case in point, Complex Networks.

Complex developed several shows for the defunct Go90 service, including QB1: Beyond the Lights. The company has licensed the show to Netflix and season 3 will premiere there later this year. In total, Netflix will license six shows from Complex Networks.

Hulu has license ten shows from Complex including Sneaker Shopping and Complex Closets. Because Complex retains the IP of the shows, it can also license them in other regions. For example, the company has other licensing deals in place with South East Asia focused iflix.

Why it matters

The online video revolution shows no signs of slowing down.

Announcements in the last few days by companies like Netflix, CuriosityStream, HBO, EPIX, and Complex Networks illustrates four trends accelerating growth in the market.

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