Analyst: Amazon Fire TV Users Prefer Streaming Netflix

Amazon Fire TV and Roku continue to spearhead the streaming media device market in the United States and select foreign markets. New data from Ampere Analysis contends Roku has a key leadership position in both the U.S. and in Canada — although Amazon is “hot on Roku’s heels” in both countries.

While Fire TV is the leading device in many of Amazon’s retail markets and has a market share of over 40% in both Germany and Japan, it still trails Roku in the U.S. Indeed, among domestic Fire TV users, the slight majority prefer to stream Netflix than Prime Video.

Ownership of Google Chromecast is high in the Nordics and Netherlands, which lack any serious Amazon retail presence. Google has over 50% market share in Netherlands and Denmark.

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Device owners show subtle differences in the streaming services they rely on, reflecting device owner strategies, interfaces and the products they promote.

Although Netflix is still the key service for Fire TV owners in the U.S., Amazon device homes are more likely to subscribe to Prime Video and HBO Now compared to Roku device owners.

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By contrast, Roku device owners show a slight skew towards Hulu and Netflix compared to Fire TV households.

Finally, Sweden tops all countries for household streaming media device penetration at 55%. That compares to Denmark, the U.K. and U.S. at 51% household penetration.

“More than any other sector, the streaming adapter market is a competitive battleground for companies with wildly different strategic imperatives — ranging from Amazon and the support which Fire TV provides for its retail operations, Apple and its high-end device ecosystem, Google and its advertising businesses, and Roku and its mix of monetization mechanisms,” Minal Modha, consumer research lead at Ampere Analysis, said in a statement.

 

Analysts Keep Piling on Apple TV+

The late Steve Jobs infamously called streaming video (i.e. Apple TV) a “little hobby,” dismissing the medium despite the burgeoning rise of Netflix and Amazon Prime Video.

Perhaps Apple should heed Jobs’ apparent indifference.

The tech giant is now diving into the SVOD deep-end with its hordes of free cash hoping a rebranded Apple TV+ app and upwards of $6 billion in content spending will compete with upstarts such as Disney+, HBO Max, Peacock and Quibi.

While the $4.99 monthly service is free for a year if you buy any new iPhone, iPad, iPod Touch, Apple TV, or Mac computer, analysts and op-eds are tripping over themselves criticizing Apple TV+ in comparison to Disney+.

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London’s Ampere Analysis, which claims Apple TV+ has more subscribers than Disney+ and Hulu, suggests Disney+’s “Star Wars” spinoff “The Mandalorian” remains a “key driver,” with viewership dwarfing Apple’s original programs, “The Morning Show” and “See.”

“‘The Mandalorian’ maintained a higher relative interest level than ‘The Morning Show’ throughout its entire run, despite Disney+ being available in only six markets,” analyst Tingting Li wrote in a post.

Indeed, Apple TV+ launched Nov. 1, 2019, in 100 markets worldwide, yet interest in “Morning Show” and “See” dropped off after the first two weeks, according to Li.

“The Mandalorian” has the same critical rating as “Friends,” based on Ampere’s proprietary quality measure. Li says future Disney+ series will include more spin-off shows such as “Star Wars: The Clone Wars” from Lucasfilm and “WandaVision” from Marvel Studios.

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Wedbush Securities analyst Michael Pachter contends that despite a major marketing effort around Apple TV+, which included signing up Jennifer Aniston, Reese Witherspoon and Steven Spielberg for original content, the finished product thus far has been underwhelming.

“[It] only had a handful of shows at launch,” Pachter wrote in a post.

Logan Purk, analyst at Edward Jones, said the streaming service would remain a “cash drain,” due to the investments required to produce original shows.

“They are leaning towards big stars and high production values,” Purk told IndieWire.

D.A. Davison & Co. analyst Tom Forte contends that while select Apple TV+ programs are “compelling,” from an investment standpoint he doubts the content is worth the investment.

“Apple is risking brand damage by offering the service at such a low price and even giving it away for free,” Forte said.

Forbes analyst John Koetsier goes one step further. He says Apple TV+ is doomed and the sooner the Cupertino, Calif.-based company realizes that the better.

Koetsier says that after unrivaled success with iPhone, iPad, Apple Watch and Mac computers, the company is stumbling with TV+ and a sudden focus on original content.

“Apple: you are amazing at hardware. You are one of the best in the world at combining hardware, software, and services,” he wrote. “You are not a media production powerhouse.”

 

Analyst: Household SVOD Stacking on the Rise

Subscription video-on-demand services are all the rage. So much so that the average household in the United States and Europe has three or more services, according to new data from Ampere Analysis. In the U.S. the proportion of survey respondents with three or more SVoD subscriptions has grown 6.6% since Q3 2018; up 6.3% in Europe.

About 40% of respondents in the U.S. have three or more SVOD subscriptions, compared with 20% in Europe.

London-based Ampere conducted the survey of 16,000 to 33,000 Internet respondents from seven international markets in the third quarter 2019.

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In most countries, SVOD and pay-TV is the most common service combination among Internet users, as consumers seek to supplement their cable or satellite TV services with online video. The proportions vary considerably though, ranging from 56% of respondents who mix pay-TV and SVOD in Holland, South Africa and the U.S. to just 13% in Japan, where free TV and SVOD combinations are more common.

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Australia, Italy and Japan are unique for having the fewest households mixing pay-TV and SVOD. As free TV services are widespread in these markets, it is unsurprising that SVOD-only is the most common paid service among consumers, who use it in combination with a strong free-to-air TV offer.

The proportion of consumers who are using SVOD and free TV — with no pay-TV at all — has been increasing in Western European markets and the U.S. Italy and the U.K. have the highest proportions of SVOD and free TV consumers. France, the U.S. and Denmark have the lowest.

“While cord-cutting is a major issue in the U.S., it has been a less significant challenge for the industry in many international markets,” Minal Modha, consumer research lead at Ampere, said in a statement. “However, our research shows that consumers in many global markets are increasingly combining SVOD products with a free broadcast TV service, placing future a growth obstacle in the path of incumbent pay-TV service providers.”

 

AVOD: Quiet Before the Storm

With the crush of new subscription streaming VOD services entering 2020, new data from Ampere Analysis suggests ad-supported VOD, or AVOD, will build scale and roll-out internationally this year.

While AVOD use within the United States remains small compared to SVOD (from 3% to 6% of domestic online households), London-based Ampere believes this to be merely the quiet before the storm.

Major AVOD players include Pluto TV, Tubi, Crackle, Vudu, IMDb TV, Roku TV, Xumo TV, Shout! Factory TV and pending Peacock from NBC Universal, which will also be SVOD, among others.

Specifically, the researcher contends AVOD is filling the niche previously targeted by SVOD: catalog content. As SVOD services such as Netflix, Amazon Prime Video and Hulu migrate toward original programming, AVOD streams older content for free — with advertising.

The proportion of Netflix’s catalog more than five years old fell from 50% in Sept. 2015 to 35% in Sept. 2019 — a trend that will continue across the sector. In the meantime, the long tail of older content has been embraced by the new AVOD services, who average nearly 80% of their catalog at five years old by title count, and in the case of Crackle, 70% of content is over 10 years old.

This demand for older content not only provides a new market for licensing deep archive, but also offers a boon for distributors and sales agents, according to Ampere.

“AVOD is coming, and it’s going to make its mark on the VOD landscape rapidly,” Guy Bisson, director at Ampere, said in a statement. “Its impact will be felt not just by the entertainment industry, but by advertising too as the shift that has already disrupted the subscription television market sweeps across the free-to-air sector.”

As advertisers rush to support AVOD, online video advertising will inevitably increase as the platforms spread globally in 2020. To date this form of advertising has remained relatively small — even in developed markets like the U.S. where 27.2% of online ad spend is on video, and in Canada where it’s just 5.85%.

Ampere expects the rush to AVOD to be supercharged by some of the studio direct models such as Disney’s Hulu and Peacock, which are expected to adopt a hybrid SVOD/AVOD model.

“AVOD services are treading a well-trodden path with an early reliance on older content, but as their market position grows, we can expect them to begin acquiring newer content and even moving into original production activity as they battle for eyeballs in an increasingly crowded market,” Bisson said.

YouTube Remains No. 1 Video Platform (Except in China)

Google-owned YouTube was the most-popular video platform in the third quarter of 2019 — a distinction the service has maintained since the advent of streaming media.

Ampere Analysis found that YouTube attracted the most eyeball globally, except in China, where government-backed services such as iQiYi reign supreme. Runner-ups included Netflix and Facebook.

London-based Ampere said YouTube (57%) also bested the BBC’s free iPlayer (55%) for the first time since 2016.

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Notably, Netflix has the highest user penetration (83%) in South Africa followed by the United States (68%), with Turkey generating the largest spike in subscriber usage (77% from 63%).

Overall, Ampere found 70% of Internet users in the U.S. and Europe have watched a video on a social video service in the last month — a 4% increase from the previous-year period. SVOD use has risen 8% to 55%.

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“The strength of short-form video is evident in YouTube’s dominant position as the most viewed in each market surveyed outside of China,” analyst Minal Modha said in a statement. “Looking at the Top 5, three of them are social video platforms which highlights its importance in the viewing mix for consumers.”

Netflix Adds 15 Pay-TV Providers in 2019

Netflix has deftly increased subscribers over the years by partnering with pay-TV operators (such as Comcast Cable) and offering direct access to its streaming video service.

The SVOD pioneer added 15 direct-access deals this year and now has access to more than 300 million pay-TV households who link (with a separate subscription) worldwide through their set-top box, according to new data from Ampere Analysis.

Netflix has more than 100 major partnership deals globally affording direct access to nearly half of all global pay-TV subs outside China.

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By the end of 2018, three quarters of pay-TV subs in Western Europe had contracts with Netflix partner operators. Netflix also had penetration to 86% of domestic pay-TV subs at the end of last year.

“The increase in the number of pay-TV partnerships with Netflix marks a distinct shift in the industry, as more and more of the streaming giant’s traditional ‘enemies’ cosy up through onboarding deals,” analyst Elinor Clark said in a statement.

Notably, Clark said Netflix was able to link with all the major pay-TV operators in France, a country previously hostile to the streamer’s arrival.

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Netflix still lags access to several large pay-TV operators in Central and South America, Asia Pacific and Central and Eastern Europe, though it is steadily working on increasing its reach. These markets (excluding China) play host to almost 400 million pay-TV subs, and Netflix currently has around 40 million subs in these territories, making these key target areas for the streamer to pursue.

“Of course, Netflix is not the only beneficiary,” Clark said. “These partnerships can also be lucrative for pay TV operators, providing them with an additional revenue stream when there may be downward pressure on their average revenue per user (ARPU) and, in some markets, cord-cutting.”

Ahead of Nov. 1 Launch, Studies Show High Awareness, Demand for Apple TV+ SVOD Service and Shows

Leading up to the highly anticipated debut of Apple TV+ Nov. 1, research firms are tracking high awareness for the SVOD service and original shows.

Parrot Analytics is tracking pre-release demand for the new streamer’s original series, including “See,” “For All Mankind,” “Dickinson” and “The Morning Show.” According to pre-release demand data captured leading Oct. 21-27, the company found that the upcoming Apple TV+ shows are well ahead of the audience demand average across all TV shows in the United States over the same time period.

“See” and “For All Mankind” were already attracting 11.7 and 11.1 times more demand than the average TV show in the United States ahead of launch, respectively, according to Parrot. “Dickinson” registered 3.3 times the demand average while “The Morning Show” managed 1.8 times the average in the United States during that time period.

Parrot also compared the pre-release U.S. and global demand for Apple TV+’s four top series to that of other hit streaming shows. For example, U.S. pre-release demand for the Apple TV+ series tracked well ahead of that of Hulu’s first season of “The Handmaid’s Tale” in the week leading up to their respective premieres. In its analysis, the company compared the average U.S. demand over the period Oct. 21-27, 2019, for the Apple TV+ series to “The Handmaid’s Tale” season one demand over its seven-day pre-premiere period April 17-23, 2017.

Findings include:

  • “See” was 897% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “For All Mankind” was 842% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “Dickinson” was 184% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “The Morning Show” was 54% ahead of “The Handmaid’s Tale”in the lead-up to its premiere.

 

Internationally, the Apple TV+ shows don’t fare as well, according to Parrot research. Pre-release demand for “The Handmaid’s Tale” in most international markets pre-launch was well ahead of the pre-release demand for the Apple TV+ series on a per capita basis.

“Based on the demand that we are seeing, Apple TV+ promotion of the series in the U.S. has put them in a position to succeed domestically,” said Courtney Williams, head of partnerships, Parrot Analytics, in a statement. “However, they have to rapidly accelerate their international marketing if they hope to be a key player in the global streaming wars. The advantage of active and ongoing hardware penetration will be key domestically and should provide the necessary foundation to drive demand globally.”

Parrot also compared the pre-release demand for Apple TV+ originals over the seven-day period Oct. 21-27, 2019, with the pre-release demand for Netflix’s “The Umbrella Academy” (Feb. 5-11, 2019). Parrot found that “For All Mankind’s” pre-release demand is 54% ahead of the pre-release demand for “The Umbrella Academy” for the comparable lead-up period.

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Meanwhile, another study from Ampere Analysis found more than one in three (38%) U.S. respondents said they were aware of the Apple TV+ product, already higher than some peer group services — such as HBO Max — at 30%. Awareness among Apple device owners was 51% versus 25% for non-Apple device owners, and skewed towards a younger demographic. While younger Apple owners said they were the most likely to subscribe, their lack of interest in Apple TV+ original content presents a potential barrier to sign-ups, according to Ampere.

“The core target group for Apple TV+, in the short term at least, will be existing device owners aged 18-34,” said Minal Modha, consumer research lead at Ampere, in a statement. “Given the popularity of Apple devices in households, there’s already a large potential customer pool in the U.S. To sustain subscriber growth for TV+ in the longer term, Apple will want to move beyond its own device universe, and ensure it appeals to those outside its brand ecosystem.”

Apple’s decision to include the TV+ service with new device purchases appeals particularly to the younger consumer. Ampere found that 21% of Apple device owners are likely or highly likely to subscribe (compared to 13% of non-Apple owners). This rose to 29% of the 18-24 age group, and dropped to 14% of those 55-64, and 9% of those over 65.

Indicating a potential boost to Apple’s hardware business, 9% of respondents said they would buy a new Apple device to get a year’s free access to Apple TV+ and a further 9% said it would encourage them to replace their existing Apple device sooner. Ampere estimates that there are 81 million Apple device-owning households and if 10% were to replace their device six months earlier than planned because of TV+, it would generate an additional $400 million in net device margin for Apple. The same analysis for non-Apple customers suggests potential net device margin of nearly $120 million. Even under conservative device purchase and replacement assumptions, Apple will be able to offset significant sums of its U.S. content expenditure, according to Ampere.

The survey found that “The Morning Show,” a comedy drama series starring Jennifer Aniston, Reese Witherspoon and Steve Carell, would appeal to 35% of Apple customers (versus 25% of non-Apple device owners). “See,” a futuristic sci-fi drama starring Jason Mamoa, has a similar and strong appeal.

The survey highlighted lack of interest in Apple TV+ content as the biggest barrier to subscribing, alongside households saying that they already have enough SVOD services to keep them happy. Apple’s competitive price point of $4.99 was not a seen as a barrier.

“Apple has a different business model from the other new platform launches in that it is able to use Apple TV+ to incentivise and accelerate device replacement — and therefore generate larger cash flow through those sales to fund content spend,” Modha said in a statement. “While the research found that the main barrier to uptake of the service is a lack of interest in the content on offer, this is mainly due to Apple being new to the original content space and consumers not knowing what to expect. As Apple TV+ begins to roll, we expect this barrier will be overcome.”

Analyst: Amazon Upping Prime Video Content Down Under

With Disney’s pending subscription streaming video service targeting Australia as a major market, Amazon has upped its Prime Video content availability in the region.

While Netflix remains the dominant over-the-top video player in Australia, new data from Ampere Analysis suggests Prime Video has been more aggressive with new content offerings in a SVOD market that will reach 65%  household penetration by the end of the year.

Prime Video increased its content hours by 84% from June 2018 through June 2019, compared to just 18% for Netflix.

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Ampere contends Netflix has produced fewer original productions (17) in Australia compared to other regions such as Mexico (36) and France (30).

“The Australian SVOD market is characterized by transition and opportunity, so it’s not surprising that Amazon has been concentrating efforts here,” Guy Bisson, director at Ampere Analysis, wrote in a note. “The new service from Disney will meet the demand for Children & Family and Action & Adventure content in particular, and by developing a family of streaming services, it will be a ‘super aggregator’”.

The London-based research firm says Aussie SVOD homes prefer indie/arthouse, horror, arts & culture, kids, romance and action compared to documentaries.

The latter among Amazon’s biggest content growth categories, in addition to action/adventure, crime/thrillers and reality.

Netflix continues to focus on romance, crime/thriller, comedy and drama, while local SVOD rival Stan targets kids and family.

“We believe [these trends] will continue, anticipating that the gap we’ve identified in the market for a premium streaming aggregator will be filled by partnerships, original productions and acquisitions,” Bisson wrote. “This is a great time to be a [streamer]in Australia.”

 

New SVOD Players Targeting Specific Audiences

With several new high-profile streaming video services about to launch, appealing to select audiences appears to be the initial strategy competing against Netflix, Amazon Prime Video and Hulu, according to new data from Ampere Analysis.

The London-based research firm Sept. 17 in a profile of six new services — Disney+, Viacom’s BET+, WarnerMedia’s HBO Max, NBC Universal’s Peacock streaming service, Apple TV+ and short-form start-up Quibi — found that content strategies going forward is largely based on their media parents.

Some services will rely on original fare (notably Apple), while others will offer catalog content and third-party licensed programming.

Ampere says Disney+ will focus on family fare with 61 original series and titles, in addition to select catalog. The service is focusing on TV and movies, with TV spin-off The Phineas & Ferb Movie, and a live-action remake of The Lady and the Tramp. Over one-third of its original content is unscripted.

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With most of its mobile-centric content about 10 minutes or less in length, Quibi can compete with Disney+ in terms of number of titles, according to Ampere. The platform is entirely reliant on the success of its original titles as its short-form nature means there’s no back catalog and no acquisition targets.

The start-up has the highest proportion of unscripted content of the six players at 40% and is targeting it at a youth-skewing audience.

Apple TV+ is focusing on big-budget, big name flagship scripted series, such as “The Morning Show” featuring Jennifer Aniston and Reese Witherspoon. Indeed, about 87% of content is scripted.

Buoyed by strong catalog, Ampere expects WarnerMedia’s HBO Max to be led by premium scripted content, although it recently announced its first two unscripted original commissions.

With under five originals, Ampere expects NBC Universal’s service to be mainly catalog-focused. It has commissioned a third season of high school comedy “A.P Bio,” previously cancelled at linear network NBC. To date all announced content is scripted.

Viacom’s BET+ has less than five originals to its name to date, and so will also rely on its existing catalog rather than original content. Another similarity with NBC is that all announced content is scripted.

“Disney+ is focused particularly on family content, with nothing higher than a 13-years age rating, with more-mature content left to the bundle-able platforms Hulu and ESPN+,” analyst Fred Black said in a statement.

“Mobile-only short-form strategy is designed to target teenagers and young adults in the 16-40 years age bracket, while BET+ will be hoping to target the same African American audience as the successful linear equivalent. WarnerMedia, having decided to use the HBO brand name, will similarly be aiming to convert some of that linear audience to streaming subscribers.”

The research firm says three of the six new services have announced unscripted content. Disney+ and Apple TV+ have a strong focus on documentaries. Disney+ has named National Geographic a core brand and has also announced science history series, “The World According to Jeff Goldblum.”

Apple TV+ documentaries include dinosaur-themed “Prehistoric Planet.” In contrast, Quibi’s unscripted slate includes 10 reality titles, including motoring challenge show, “Elba vs. Block.” The player is the only new service to offer daily news and current affairs via partnerships with NBC and BBC.

Ampere’s analysis of upcoming originals found that 66% of content originates from its existing source material, such as movie brands and literary adaptions, which is more than any of the other three studio-backed services.

About 47% of Apple TV+ and 43% of HBO Max’s commissions are original concepts. Both players have turned to literary adaptions to build prestige, scripted content.

For instance, at Apple TV+ there’s Stephen King’s “Lisey’s Story,” and at HBO Max, there’s Alissa Nutting’s sci-fi drama “Made for Love.” In complete contrast, only 2c4% of Quibi’s commissioning is originals based on source material. They include four literary adaptations and three movie remakes, among them “How to Lose a Guy in 10 Days.” NBC has yet to commission any original concepts.

More than 27% of scripted commissions across the six new services are sci-fi and fantasy, followed by crime & thrillers at 21%.

These genres have proved particularly successful for Netflix and Amazon, so it’s not surprising these new competitors have prioritized the genres, says Ampere.

HBO Max has Gremlins spin-off “Secrets of the Mogwai,” while Apple is combining sci-fi and crime with drama. For Disney+, children and family content will dominate alongside sci-fi and fantasy.

Disney+ originals are being used to drive early subscriber growth, leveraging well-known brands such as Marvel superhero titles “Loki” and “The Falcon and the Winter Soldier” and “Toy Story” spin-off “Lamp Life.”

Meanwhile, 43% of HBO Max titles feature a female lead. HBO Max is the only platform where female-led content is the most prominent category.

Disney+’s focus on spin-offs and reboots from older titles has left it with a more male-centric set of commissions, with 39% of titles with lead characters featuring a male lead.

Mixed gender group casts are however common at Disney+ (23%), as well among Apple TV+ (29%) and HBO Max (33%) commissions.

This compares to Quibi, where titles with protagonist groups account for only 4% of commissions. With episodes roughly 10 minutes long, titles by necessity tend to focus more on a specific male or female protagonist.

“Across the six platforms the two most popular genres for commissioners have been sci-fi and fantasy and crime and thrillers, showing a willingness from the new players to take on Amazon and Netflix’s original content head-to-head,” Black said.

Research: SVOD Outstrips Pay-TV in Australia and New Zealand

Subscription TV homes in Australia and New Zealand have already reached the inflection point where SVOD outstrips pay-TV, according to new research from Ampere Analysis.

Australia reached this milestone in 2017, and New Zealand in 2018.

SVOD has also surpassed pay-TV elsewhere in Asia-Pacific, including Thailand and Singapore — with Malaysia on the brink of achieving the turning point.

The only Western European markets that come close in terms of SVOD outstripping pay TV homes are Denmark, Norway and the United Kingdom.

Just 7.1% of streaming households view only broadcast VOD (BVOD) in Australia, compared with 14% in the United Kingdom. Almost one half (47.6%) of Australia households view SVOD without using BVOD services, much higher than the U.K.’s 21%. The difference is also stark when it comes to combining SVOD with BVOD: Australia’s 22.6% is just under half of the U.K.’s 50.5% of the audience. This suggests there is plenty of opportunity for Australian broadcasters to improve their content offering to appeal to streaming households looking to curate their entertainment selection, according to Ampere.

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“Australia is a hugely advanced market for streaming services and provides an interesting test case for the transition from traditional forms of paid TV distribution to the new,” said Guy Bisson of Ampere Analysis. “It’s no surprise that Disney has chosen Australia and New Zealand as two of the first four international markets for its direct-to-consumer streaming launches. If they are to stop Netflix dominating, local broadcasters need to evolve their own streaming platforms in order to maintain market and competitive position, leveraging strengths around local production and potentially co-operating on joint services and aggregation and navigation as well as exploring hybrid (mixed subscription/advertising) streaming business models.”