Research: OTT Revenue Forecast to Reach $22 Billion in 2019

Based on 66 OTT providers, led by Netflix, Hulu and Amazon, U.S. OTT access revenue grew 37% to $16.3 billion in 2018 and is forecast to reach $22 billion in 2019, according to a new research from Convergence Research.

The research firm has released two new reports, “The Battle for the American Couch Potato: OTT and TV” and “The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless.”

Still, U.S. TV subscriber average revenue per user (ARPU) is still forecast to be three times U.S. OTT subscriber household ARPU in 2021.

The firm estimates 2018 U.S. cable, satellite, telco TV access (not including OTT) revenue declined 3% to $103.4 billion in 2018 and forecasts 2019 will see a similar decline. Also, 2018 saw a decline of 4.01 million U.S. TV subscribers and 2017 a decline of 3.66 million, according to the firm, which forecasts a decline of 4.56 million TV subs for 2019. The U.S. TV subscriber
base will decline 5% in 2019, from a decline of 4% in 2018, according to the firm’s estimates.

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By the end of 2018, the firm estimates 30% of households did not have a traditional TV subscription with a cable, satellite, or telco TV access provider, up from 26% at the end of 2017. The firm forecasts that number to reach 34% of households by the end of 2019. Convergence Research estimates 2018 saw almost 5 million cord cutter/never household additions.

The firm projects that a number of OTT plays, including large and niche, will fail due to insufficient subscriber traction, cost and competition, noting major programmers continue to accelerate their direct-to-consumer drive, including Disney and WarnerMedia. Other developments noted by the firm include:

  • Hulu spends more on content per sub than either Amazon or Netflix and continues to discount (notably with Spotify);
  • CBS/Showtime’s OTT subscriber trajectory has been faster than expected;
  • Discovery has backed and supplied Philo, gone live with Hulu, Sling and YouTube TV, and will be launching an OTT service with the BBC;
  • NBC Universal will be launching an OTT service in 2020;
  • and Viacom has backed and supplied Philo and others, acquired Pluto and Awesomeness TV and is producing for Amazon and Netflix.

BritBox SVOD Service Heading Home

Following the successful launch of a British-themed subscription streaming video service in the United States, the creators of BritBox are planning to bow the platform in the United Kingdom.

The BBC and ITV Feb. 26 said they are working out the legalities, anticipating that other partners will be added to the service. Both companies said they would speak to regulators and the wider industry about their proposals.

While neither the BBC or ITV would disclose pricing for the service, launch is planned for the second half of 2019. Consumers can pre-register for the service at www.BritBox.co.uk.

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BritBox U.K. would claim to have the biggest collection of British content available on any streaming service, in addition to original content specifically created for the streaming service.

“I am really pleased that ITV and the BBC are at the concluding stage of discussions to launch a new streaming service,” Carolyn McCall, CEO of ITV, said in a statement. “BritBox will be the home for the best of British creativity – celebrating the best of the past, the best of today and investing in new British originated content in the future.

The BBC and ITV launched BritBox in the United States in 2017, with the service recently topping 500,000 subscribers. The tally is significant considering British-themed SVOD competitors include AMC Networks’ Acorn TV, Netflix and Amazon Prime Video.

There is no shortage of SVOD service in the U.K., with both Netflix and Amazon well established. Data from the Broadcasters Audience Research Board found that more than 12 million households have at least one SVOD service – with annual growth in homes with any SVOD service at 20%. That percentage increases to 32% with 4 million homes having more than one subscription.

ITV claims 43% of all connected homes in the U.K. are interested in subscribing to a SVOD service featuring British content. This percentage increases to over 50% in homes with a Netflix subscription.

“It’s an exciting time for the viewing public,” said BBC director general Tony Hall.

 

 

Netflix: ‘Bodyguard’ Topped 23 Million Households in First Four Weeks

Netflix original series “Bodyguard” was streamed by more than 23 million households in the four weeks following its Aug. 26, 2018 debut.

CCO Ted Sarandos disclosed the data Jan. 17 during the SVOD pioneer’s fourth-quarter fiscal webcast.

The British series, which won Richard Madden (“Game of Thrones”) a surprise Golden Globes award for Best Actor in a TV Drama, features Madden as an ex-Afghanistan war veteran suffering from PTSD now working as a police sergeant assigned to protect the U.K. Home Secretary (played by Keeley Hawes) – a noted war hawk.

Netflix co-produced the show with ITV, with the BBC broadcasting “Bodyguard” in the United Kingdom concurrent with Netflix’s global distribution.

Sarandos said the mini-series was one of 140 co-productions Netflix greenlighted in 2018. He said there are 180 co-productions planned this year.

“When I say co-production, I mean, we come in at the script stage, we come in at the first money stage, we’re involved creatively with the production of that show,” Sarandos said. “[‘Bodyguard’] is a good example of taking a show from anywhere in the world to the rest of the world.”

 

 

 

 

British Regulator Calls on Country’s Public TV Broadcasters to Create Netflix Rival

With British-centric programming at the core of subscription streaming video-on-demand services such as Netflix, BritBox, Acorn TV and Amazon Prime Video, Sharon White, CEO of media regulator Ofcom, said the country’s public TV broadcasters should join forces to create a competing over-the-top video platform.

The United Kingdom represents the second-largest SVOD markets for Netflix and Prime Video.

Speaking Nov. 28 at the Outside the Box confab in London, White called on broadcasters responsible for popular series such as “Broadchurch,” “Bake Off” and “Blue Planet,” to combine existing OTT video platforms — BBC’s iPlayer, ITV Hub, All 4 and My5 — into a single service that could compete against Netflix and Amazon Prime Video more effectively.

“It would make it easier for viewers to access content across a range of devices, with a single login,” White said, adding that Ofcom has been encouraging U.K. broadcasters to collaborate and harness the power of technology to capture the audiences migrating online.

White cited the BBC/ITV collaboration around the 2017 launch of BritBox in the United States, which streams original series such as “Blackadder”, “Fawlty Towers” and “East Enders,” as a blueprint.

Indeed, Ofcom contends any joint venture hinges on the BBC — a prolific producer of original content for Netflix — which launched the iPlayer in 2007, the same time Netflix began streaming video with a branded Roku device.

“I remain convinced that collaboration is vital to the success of our industry,” White said.  “The sea-changes of recent years will not be the last. Nor can anyone be sure what competition and technology lie over the horizon. But while we cannot hold back the tide, our broadcasters can swim more strongly with it by working together.”

 

 

BBC, Lionsgate Team on Content Development

BBC Studios Los Angeles and Lionsgate Television have teamed up to co-develop and co-fund scripted formats and original intellectual property for the U.S. market. As part of the first look agreement, the parties will create original series, drawing on the BBC catalog.

The BBC Studios production unit in Los Angeles provides content to broadcast, cable and subscription services, including scripted productions “Getting On” (HBO) and the Emmy award-winning The Night Of (HBO) and unscripted brands “Dancing with the Stars” (ABC) and the Emmy award-winning “Life Below Zero” (National Geographic Channel).

“BBC Studios productions is known for showcasing the best content with British DNA,” said Matt Forde, managing director, international production and formats, BBC Studios, in a statement. “We’re looking forward to this creative partnership with Lionsgate Television to more readily bring this to the U.S. audiences, and beyond.”

“We’re thrilled to partner with one of the largest and most respected content suppliers in the world,” said Lionsgate Television Group chairman Kevin Beggs and Lionsgate Television Group president Sandra Stern in a statement. “We’re incredibly excited by the opportunity to marshal our complementary resources and expertise to continue to bring the globally renowned BBC brand to the U.S. market.”

BBC Releasing Season One of ‘Killing Eve’ on Disc Oct. 9

BBC Studios will release Killing Eve: Season One on Blu-ray and DVD Oct. 9.

The Emmy-nominated series stars Sandra Oh as a bored MI5 security officer confronting a mercurial killer (Jodie Comer) in a game of cat and mouse.

Oh was the first Asian woman nominated for the Emmy for Outstanding Lead Actress in a Drama Series for her role. Phoebe Waller-Bridge was nominated for a writing Emmy.

A second season will air on BBC America in Spring 2019.

BBC Boss Strikes Populist Chord; Calls for Increased Funding, Greater Oversight on Foreign OTT Video

As expected, Tony Hall, director general of the publicly-owned British Broadcast Corporation, Sept. 18 issued a call to arms of sorts, as the public service broadcaster competes against international over-the-top video behemoths Netflix and Amazon Prime Video, among others.

In a keynote to the 2018 Royal Television Society London Conference in London, Hall said the BBC, which is funded by the government through a special tax, is increasingly asked to do more with less as operating budgets get cut.

He said that while Netflix and Amazon will spend a combined $13 billion on original content this year, the BBC and other public broadcasters will spend around $3.3 billion. Hall said the spending gap is resulting in a dearth of local content production, which he claims impacts British culture.

“Netflix and Amazon are not making up the difference,” Hall said. “Ofcom’s data suggests that less than 10% of the [catalog] of Netflix and Amazon [is] comprised of content produced in the U.K. Two separate estimates have suggested their investment into new U.K. programs is around £150 million a year.”

The executive believes reduced spending on localized content negatively impacts British viewers and the country.

“The content we produce is not just an ordinary consumer good,” Hall said. “It helps shape our society. It brings people together, it helps us understand each other and creates an incredibly powerful shared narrative.”

Specifically, the BBC claims to be a superior value economically to British consumers. Hall said each hour of BBC TV costs households 8 pence per hour to consume. For an equivalent SVOD service it’s around 17 pence and hour. And for a pay-TV service it’s 35 pence.

He said British media content is also a source of “soft power” required to combat fake news and online disinformation, which Hall claims contributes to the “undermining of traditional truths and values.”

The executive outlined five courses of action the BBC is addressing, which include original local content production, reinventing BBC services, investing more in children’s and young adult content, fighting fake news, and thinking beyond its London headquarters.

“But while we believe the BBC’s public mission is as important as ever, and that we can do more for Britain, we do not believe this ambition is sustainable with the resources we have,” Hall said.

He called on Britain to do more to support the broader PSB “ecology,” while sustaining “great relationships” with companies like Google, Apple, Netflix and Amazon Prime Video.

Indeed, many “original” Netflix shows in the United States are licensed from the BBC, including, “River,” “The Great British Baking Show,” “The IT Crowd,” “Foyle’s War,” “Jonathan Strange & Mr. Norrell,” “Wallander,” “Broadchurch,” “Planet Earth,” “London Spy,” and “Call the Midwife,” among others.

Netflix just announced it has secured exclusive U.S. rights to BBC One Drama, “Bodyguard, set to begin streaming Oct. 24.

“It’s important we work with them now and in the future,” Hall said.

At the same time, Hall argued “it cannot be right” that the U.K. media industry is competing against global SVOD giants with “one hand tied behind its back.”

He said the BBC is often hamstrung by government-mandated competition rules, advertising, taxation, content regulation, terms of trade and production quotas – rules he said “barely” apply to Netflix & Co.

“That needs rebalancing,” Hall said. “The big picture is a simple one: the public believes in public service broadcasting and a strong BBC.”

‘[Netflix & Co.] have their job to do, their services to provide. We have ours. Scale is not everything. Smaller can be beautiful,” he said.

 

 

 

 

 

 

 

 

 

Apple Ups Original Content Game with Joe Oppenheimer Hire

Apple is looking to the United Kingdom to jumpstart its original video content aspirations.

The media giant reportedly hired Joe Oppenheimer, long-time executive at BBC Films, to its international content development unit. Oppenheimer’s credits include the 2016 drama I, Daniel Blake; Testament of Youth (2014) and the 2014 comedy Alan Partridge: Alpha Papa, among others.

Oppenheimer reports to Jay Hunt, the former BBC and Channel 4 executive Apple hired last October to head its international TV unit.

Before departing Channel 4, Hunt acquired rights to “The Great British Bake Off,” a reported $99 million reality series that has generated big ratings in the U.K. targeting the coveted 18-34 year-old demo.

Last year, Apple hired former Sony Pictures Television executives Jamie Ehrlicht and Zack Van Amburg to get original streaming video off the ground.

One of their first moves was signing up Jennifer Aniston and Reese Witherspoon for a 20-episode, two-season series about a TV morning show.

Other deals include series from M. Night Shyamalan, Damien Chazelle (La La Land) and Ron Moore (Outsiders).

BBC Releasing Blu-ray of Tom Baker’s First Season on ‘Doctor Who’

BBC Studios June 19 will release Doctor Who: Tom Baker — Complete Season One on Blu-ray, featuring 20 episodes from the 1974-75 season of the classic British sci-fi series “Doctor Who.”

Comprising the show’s 12th season, the remastered episodes feature Baker’s introduction as the fourth actor to play The Doctor, a time-travelling alien who fights evil throughout the universe with the help of his human companions. The season includes the serials “Robot,” “The Ark in Space,” The Sontaran Experiment,” “Genesis of the Daleks” and “Revenge of the Cybermen.”

The marks the first time a complete season of the 1963-89 original run of the franchise is being released in a single volume. Previous DVD releases have been per serial or special compilations.

The six-disc Blu-ray includes more than 17 hours of bonus content, including:

  • “Tom Baker in Conversation,” a candid new one-hour interview with the actor.
  • “Behind the Sofa,” a selection of clips viewed by several stars of the show.
  • New making-of documentaries for “The Sontaran Experiment” and “Revenge of the Cybermen.”
  • An option to watch “Revenge of the Cybermen” with brand new, updated special effects.
  • An omnibus movie version of “Genesis of the Daleks,” unseen since its broadcast in 1975.
  • “The Tom Baker Years,” A 1991 special featuring highlights from the Fourth Doctor’s run, available on disc for the first time.
  • Immersive 5.1 surround sound mixes for “The Ark In Space” and “Genesis of the Daleks.”