Streaming Wars: Big-Money Upstarts Battle Established Leaders

It has been a calamitous year on many fronts due to COVID-19. And yet the global pandemic, with its stay-at-home orders and shuttering of movie theaters, has been a boon for streaming video services such as Netflix and Disney+, the two leaders of opposing factions now doing battle for viewership — and subscriber dollars.

There are now seven major subscription VOD services, counting the rebranding of ViacomCBS’s CBS All Access into Paramount+ early next year.

Netflix, along with Amazon Prime Video and Hulu, represent the old guard, established streamers with healthy track records and steady, progressive growth. Disney+, which only launched in November 2019, leads a quartet of high-profile newcomers — Apple TV+, HBO Max, NBCUniversal’s Peacock and, soon, Paramount+ — seeking to unseat the incumbents by grabbing a dominant share of the spoils.

And the SVOD pie is getting bigger. Hub Entertainment Research found the average person is accessing 60% more streaming video services in 2020 than they did in 2018, while 90% of households with children living at home subscribe to more than one OTT video service.

“We’ve seen the number of providers per [survey] respondent rise to an all-time high during the pandemic,” analyst Jon Giegengack said. “The average respondent had 4.8 services. That was going up anyway, but the pandemic turbocharged it.”

Leading the way: Netflix. Long a favorite on Wall Street, the SVOD market co-creator (with Roku) again this year quieted would be critics with outsized subscriber growth (projected 34 million additions through the end of the year), strong financials (revenue up 25% to $18.35 billion through the first nine months of this year) and weekly chart-topping content.

“We’ve been doing high 20s [in millions of net adds per year] for four years,” co-CEO Reed Hastings said on the company’s most recent fiscal webcast. “And this year [we are] setting all kinds of records,” he noted, adding that increased revenue translates into more content spending, which “tends to generate more sub growth over time.”

Indeed, while Netflix may have fallen short of its own sub growth projections in the quarter ended Sept. 30, in many ways Q3 was a solid quarter, particularly in terms of retention, according to Parrot Analytics. The data analytics company said the effects of the “extraordinary” operating conditions caused by the pandemic are still benefiting Netflix.

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Several demand metrics relevant to subscriber retention, such as the demand decay rate, are trending upward, according to Parrot. This shows that Netflix is improving on measures that keep subscribers coming back for more. Netflix, in its shareholder letter, noted that “retention remains healthy.”

A study by Bank of America Securities found churn among Netflix subs (not renewing) during the pandemic has dropped significantly. That is an improvement from the 4% monthly churn Netflix experienced prior to the coronavirus.

“Viewer loyalties are shifting as subscriptions to traditional pay-TV services decline,” said Steven Nason, research director at Bank of America Securities. “The average Netflix subscriber has had the service over 50 months … all other services have much shorter subscription histories.”

That loyalty was tested following backlash to Cuties, an award-winning French movie about pre-teen girls in a Paris dance troupe, which threatened to explode Netflix churn, and worse. The service continues to find itself in the crosshairs of a criminal prosecution in the state of Texas.

“It’s a film that is very misunderstood with some audiences, uniquely within the United States,” co-CEO Ted Sarandos said during the virtual French MIPCOM confab in October. “The film speaks for itself. It’s a very personal coming-of-age film; it’s the director’s story and the film has obviously played very well at Sundance without any of this controversy, and played in theaters throughout Europe without any of this controversy.”

Wells Fargo analyst Steven Cahall said he believes that while the controversy may have cost Netflix 2 million North American subs in Q3, the decline was short-lived.

“We think the [issue] and elevated churn was essentially a flash in the pan,” Cahall wrote.

Wedbush Securities media analyst Michael Pachter called the criminal indictment “idiotic,” arguing the case is a First Amendment issue that
Netflix should win easily.

“The case has no merit at all,” Pachter said.

Indeed, the day after the district attorney in Tyler County, Texas, issued a statement explaining his motive for filing charges against Netflix, shares of the company increased nearly 6%.

“Netflix should remain the dominant SVOD player for the foreseeable future,” wrote Pivotal analyst Jeffrey Wlodarczak.

Naturally, Hastings agrees. The executive characterized the pandemic’s impact on the OTT video industry as a one-time phenomenon. Hastings said Netflix continues to compete against myriad other entertainment distractions, including TikTok, YouTube and video games, among others. He said Netflix user engagement, subscriber churn and related trends remain on par with what management expected a year ago.

“There was temporary learning when there was no [live] sports, but it’s like, well, it [wasn’t] really that interesting of a finding because it’s just not relevant to the [non-pandemic] world,” Hastings said. “Now we’re back in a world with partial [TV] sports and that’s fine and we’re [still] growing.”

In November, Netflix began testing a linear channel in France streaming original programs like an old-school TV channel without a DVR. Available only to subscribers and on the website, the channel could be Netflix’s eventual foray into ad-supported content. With nearly 200 million subs worldwide, Netflix’s challenge is to sustain viewer interest.

“The limiter for us is what’s the quality of our service, how many nights can you say, ‘Oh my God, I want to go to Netflix and watch the next show?’” Hastings said.

Rising Tide Lifts All Streamers

To put Netflix’s meteoric year into perspective is to understand that 2020 has been a banner year for OTT video, including ad-supported VOD. That’s because there’s been a wave of opportunity spurred by a captive audience sequestered at home. The year saw the table set among streaming competitors with Fox Corp.’s $440 million acquisition of AVOD service Tubi and the launches of WarnerMedia’s HBO Max and NBCUniversal’s Peacock.

ViacomCBS will launch a reboot of CBS All Access, dubbed Paramount+, for global access in 2021. Peacock became the first SVOD platform to offer a free ad-supported VOD option at launch. Max is slated to bow an AVOD option in 2021.

ViacomCBS CEO Bob Bakish said Paramount+ would separate itself from other SVOD services by streaming the NFL, SEC college football, UEFA soccer, PGA Golf, live national CBS News and local affiliates, as well as news show “60 Minutes,” among others.

“It’s going to be a truly differentiated and compelling offering that’s unlike anything that’s really out there today,” Bakish said.

The lone anomaly: Quibi, the mobile-streaming SVOD app launched in early April by DreamWorks Animation founder Jeffrey Katzenberg and former HP boss Meg Whitman that lasted just six months before it was announced it was shutting down. The service targeted mobile-device users with original programming from five minutes to 10 minutes in length — and was backed by a $1.75 billion war chest. Despite the hype and big-name talent (Anna Kendrick, Chrissy Teigen, Christoph Waltz and Liam Hemsworth, among others) associated with content production, few consumers opted in beyond the free trial period.

Analysts suggested just 8% of initial free Quibi trial users converted to paying subs in the first month. Katzenberg, in media interviews over the summer, attributed the sluggish start to the coronavirus pandemic, maintaining that many potential subscribers were stuck at home watching TV instead of streaming video on their mobile devices. Quibi didn’t help itself at launch when content was available only on portable devices and not televisions.

The app lasted just a fraction as long as Verizon Communications’ $1 billion mobile-based video misstep, go90, which shuttered in 2018 after three underwhelming years.

Trendsetters

Like most markets, first movers typically hold the advantage. OTT video is no different as viewership on Netflix, YouTube and Amazon Prime Video accounted for 64% of the time consumers spent on Internet-connected TVs in July, according to Comscore. When adding Hulu and Disney+ to the mix, the five apps accounted for 83% of all streaming video consumption. The data underscores the fact that the TV ecosystem has embraced digital platforms, with streaming video at the center of an ever-more-dynamic path to content distribution.

There’s more good news ahead. Despite approaching market saturation, the number of U.S. SVOD subscriptions is projected to climb from 203 million in 2019 to 317 million by 2025, according to Digital TV Research. Even Netflix, with 12 years of service under its belt, is projected to add 10 million domestic subs in the period. This growth is overshadowed by projected gains at newcomer Disney+ (27 million sub additions) and Hulu’s expanding profile (22 million). Peacock, HBO Max and CBS All Access/Paramount+ will each add more subs than Netflix during the period, according to DTV Research. The six platforms will account for 82% of the 114 million total U.S. subscriber additions. Separately, All Access and sister service Showtime OTT ended the Sept. 30 fiscal period with nearly 18 million combined subs — up 72% year-over-year from 10.4 million.

“The depth of choice in the U.S. will not be replicated in any other country,” said analyst Simon Murray. “Eight U.S. platforms will have more than 10 million paying subs each by 2025.”

Murray predicts that SVOD subscriptions will increase by 529 million worldwide through 2025 to 1.17 billion. By 2025, one-third of the world’s TV households will have at least one SVOD subscription — up from a quarter at the end of 2019. China and the United States together will account for 51% of the global total. This is down from 63% in 2019 — suggesting SVOD growth in other countries is growing quickly.

Direct-to-Consumer Push

Disney in its Nov. 12 fiscal call reported that Disney+ had reached  73.7 million global subs, well ahead of company projections on the one-year anniversary of the service’s launch. It had passed 60 million in August. Thanks to a global brand, the service is expected to be the biggest SVOD mover in subscriber growth over the next five years, generating 142 million subs between 2019 and 2025 to reach 172 million, according to Digital TV Research. Netflix, by comparison, will add 91 million subscribers to total 263 million.

“We believe that Disney+ will have a huge impact,” said analyst Simon Murray.

At the same time, Murray lowered his Disney+ sub forecast through 2025 by 30 million, contending the streamer’s June results showed a deceleration of sub additions following international launches in the United Kingdom, Ireland, Germany, Austria, Italy, France, Spain and Switzerland. The service is also available in Australia, New Zealand, Holland and Puerto Rico.
Disney+ will roll out in Latin America beginning on Nov. 17.

“We expect this trend to be repeated elsewhere,” Murray said.

Indeed, with Disney+ now a year old, many subscribers who received free 12-month service deals as part of a Verizon promotion will have to start paying or cancel the service. Some analysts contend the Verizon promotion accounts for 15% of Disney’s subscribers. To stave off a possible uptick in churn, Disney just launched the second season of “Star Wars” spinoff “The Mandalorian,” in addition to original series “The Right Stuff” and The Lego Star Wars Holiday Special movie, among other content.

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Keeping consumers interested in Disney+ remains a priority for CEO Bob Chapek and key investors as much of the company’s business units remain idle due to the coronavirus pandemic. In a recent letter to Chapek, minority stake holder Dan Loeb said he wanted the board to re-direct annual dividends to content spending on Hulu, ESPN+ and Disney+.

“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote Chapek. “The ability to drive subscriber growth, reduce churn and increase pricing present the opportunity to create tens of billions of dollars in incremental value for Disney shareholders in short order, and hundreds of billions once the platform reaches larger scale.”

Chapek continues to put digital distribution at the core of his corporate strategy. In October, Chapek formed a new Media and Entertainment Distribution group, led by Kareem Daniel, that is tasked with putting a “focus on developing and producing original content for the company’s streaming services.”

That move was preceded by Disney moving erstwhile Pixar Animation feature film Soul from the theatrical slate to Disney+ for Dec. 25 access. The film was previously scheduled for theatrical release on Nov. 20. Mulan, another Disney release intended for theaters, became the studio’s first “premier access” VOD experiment, affording Disney+ subs the ability to pay $29.99 to access the film months before it was due to become available on the service.

In crossing the PVOD line in the sand, Chapek dealt a major blow to exhibitors who had come to count on Disney movies luring moviegoers and concession sales. It was just over a year ago that Disney’s market share of the domestic movie box office reached 35% ($1.88 billion) — surpassing the next two studios combined.

“Over the last six months, marketplace conditions created by the ongoing pandemic, while difficult in so many ways, have also provided an opportunity for innovation in approaches to content distribution,” Disney said in a statement. “The Disney+ platform is an ideal destination for families and fans to enjoy a marquee Pixar film in their own homes like never before.”

Separately, ESPN+ added 6.8 million subs in the quarter to bring its total to 10.3 million. Hulu added 6.9 million subs to reach 32.5 million, up 27% from the previous-year period. Online TV service Hulu with Live TV added 1.2 million subs to end the period with 4.1 million. Disney ended the period with 120.6 million combined subscribers to its OTT platforms.

“The real bright spot has been our direct-to-consumer business, which is key to the future of our company,” Chapek said.

Hulu Eyeing Disney+ Future?

Long a runner-up to Netflix and Amazon Prime Video, Hulu has quietly increased subscribers while majority-owner Disney directs much of its focus to Disney+. More than three-quarters (78%) of all U.S. households have a subscription to Netflix, Prime Video and/or Hulu, according to the Leichtman Research Group. That’s up from 69% in 2018, and 52% in 2015. More than half (55%) of U.S. households now have more than one of these SVOD services, an increase from 43% in 2018 and 20% in 2015.

Hulu, over the summer, began offering a new discounted yearly plan for current subscribers to its $5.99 per month plan. Subscribers to that ad-supported plan have the option to get a one-year subscription for $59.99, or 12 months for the price of 10. The option will roll out to new ad-supported Hulu subscribers later this year, the company announced.

But to what end? Disney, under former CEO Bob Iger, had planned to expand Hulu overseas. But with Disney+ already doing that — including launching co-branded service with Disney-owned Star in India in 2021, Hulu’s international trajectory seems unsure. Indeed, a planned Hulu strategy meeting regarding international expansion was never held, according to Bloomberg, which cited sources familiar with the situation.

“In terms of the general entertainment offering internationally, we want to mirror our successful Disney+ strategy by using our Disney+ technical platform, bringing in content we already own and distributing it under a successful international brand that we also already own, which is, of course, Star,” Chapek told investors in August.

‘Coming 2’ Free Shipping

Amazon Prime Video made news in October when it reportedly paid $125 million to Paramount Pictures for streaming rights to the Eddie Murphy sequel Coming 2 America. The movie, featuring original headliners Murphy and Arsenio Hall, in addition to co-stars Tracy Morgan, Wesley Snipes, Leslie Jones and Jay Pharaoh, is slated to bow on Prime Video March 5, 2021. The 1988 original Coming to America was a blockbuster for Paramount, generating $128 million at domestic screens and $288 million worldwide, just behind Who Framed Roger Rabbit and Rain Man.

Amazon has been relatively quiet on content spending in 2020 compared with rivals Netflix, Disney+, HBO Max and Apple — reportedly on the hook for “only” $6 billion this year before the coronavirus hit. The Paramount deal represented another high-profile transaction for Amazon Studios under the direction of Jennifer Salke, following agreements for Sasha Baron Cohen’s second “Borat” flick and Dave Bautista’s My Spy.

Yet the movies mask an original content slate that saw just seven TV shows trickle out of Amazon through three fiscal quarters, including, most recently, the dystopian drama “Utopia.” By comparison, Netflix released more than 70 original programs through Oct. 9.

“The pace in which Amazon releases content does not place it in close competition with other streaming services,” Wedbush Securities’ Michael Pachter wrote in a note. “However, most of the 105 million Prime members did not sign up specifically for video content, but rather for the free shipping, and to enjoy movies and TV shows as an added perk to the service.”

Speaking on a recent fiscal call, CFO Brian Olsavsky said the number of Prime members who stream Prime Video outside the U.S. grew by more than 80% year-over-year in the third quarter, and international customers more than doubled the hours of content they watched on Prime video compared with last year. Prime Video expanded globally in 2016 to more than 200 countries.

While Prime Video, like Netflix, remains ad-free, Amazon is not turning its back on ad-supported content and incremental revenue opportunities. The company owns and operates ad-supported IMDb TV and is working with third-party apps on Fire TV for advertising opportunities.

“We’re seeing some good momentum with [AVOD],” Olsavsky said. “I won’t say too much about what we’ll look like next year, but that gives you kind of sense of priorities where we’re spending our time and focused on.”

‘Max’ Challenges

Backed by a $4.8 billion content war chest, HBO Max aims to expand the HBO brand beyond its usual offering of niche series such as “True Detective” and “Game of Thrones,” with the “Harry Potter” movies; cartoon libraries from Looney Tunes, Merrie Melodies and Hanna-Barbera; original movies, TV shows and multi-topic podcasts; and re-runs of “Friends,” the iconic sitcom for which WarnerMedia “paid” itself (Warner Bros. Television) $425 million for exclusive streaming rights.

But there remains a problem. Max’s goal to secure 50 million new subscribers by 2025 remains optimistic, as app adoption among existing HBO subscribers remains sluggish. The service has generated just 8.6 million new subs through Sept. 30, despite the fact that more than 30 million existing HBO subs qualified for a free Max upgrade.

Max and HBO totaled 38 million combined subs through Sept. 30 when factoring in existing HBO subs able to access Max (for free) via third-party pay-TV operators. They had 36.2 million combined subs on July 23, exceeding the year-end goal of 36 million. Domestic HBO and Max subscribers do not include customers who are part of a free trial. The lack of sub growth at Max is glaring, considering rival Disney+ generated 22 million sign-ups in its first four weeks. A leading culprit hindering Max sub growth could be an ongoing stalemate with Roku and Amazon over placement of the Max app on their respective platforms.

The app is available on Apple, Google and Samsung devices, but not yet on Roku or Amazon Fire TV devices or connected TVs. This severely impacts Max since the two services combined are the primary way 70% of consumers connect to streaming video services, according to Comscore. Fire TV, with 40 million registered users, and Roku, with more than 43 million, are key platforms for the survival of third-party SVOD services. Indeed, Max predecessor HBO Now generated the bulk of its 8 million subs through Prime Channels, Fire TV and Roku. The platforms typically take a cut of subscription revenue, in addition to controlling user data — requirements WarnerMedia reportedly dislikes.

The imbroglio resulted in launch confusion whereby an HBO pay-TV subscriber, or HBO Now/HBO Go user, automatically upgraded to Max, but could only watch catalog content unless separately downloading and registering on the Max app.

“We believe Amazon looks at that consumer experience as subpar and overly complicated. And we agree,” Rich Greenfield, analyst with Lightshed Partners, said in a note.

Regardless, AT&T management says Max consumer engagement is 60% higher than for SVOD predecessor HBO Now.

“We continue to grow and scale Max, with total domestic HBO and Max subscribers … well ahead of our expectations for the full year,” said AT&T CEO John Stankey. The telecom giant has spent $2 billion on the launch of Max.

While Stankey put a positive spin on sub growth, activation figures underscore Max’s ongoing struggle to capture consumers. New subs were only about twice that of Netflix’s sluggish Q3 sub additions, which ended the quarter with 195 million paid subs.

WarnerMedia CEO Jason Kilar said he believes Max sub growth is not a sprint win in the first 24 hours of launch, but rather a steady progression over the course of a marathon.

“If you look at last year at where we hoped we would be at the end of 2020, which is 36 million HBO and Max subscribers … obviously the number is going up every day,” said Kilar.

The former Hulu co-founder, who was hired in April to jumpstart Max-based initiatives across Warner Bros., HBO and Turner, brought in former Hulu colleagues (Jean-Paul Colaco to head sales; Andy Forssell as GM of direct-to-consumer) while cleaning house companywide. In August, Kilar cut about 500 positions at Warner Bros., with plans to eliminate another 20% of the WarnerMedia workforce. Through it all, analysts say Max’s impasse with Amazon and Roku, and confusing consumer options stand out as missteps in a market dominated by Netflix, Disney+, Hulu and Prime Video.

“There’s a reasonable shot that AT&T management will screw up HBO Max as a SVOD competitor,” said Pivotal’s Wlodarczak.

Peacock Spreads Its Wings

When NBCUniversal’s Peacock and Roku announced an agreement enabling the former’s app placement on the Roku platform, it was a big win for the industry’s newest SVOD service. The deal followed months of  negotiations that saw Peacock (like HBO Max) enter the market without distribution on Roku and Amazon Fire TV — both must-have distribution points in the OTT video ecosystem.

“Roku customers are engaged streamers, and we know they’ll love access to a wide range of free and paid content,” Maggie McLean Suniewick, president of business development and partnerships at Peacock, said in a statement.

The agreement came on the heels of Comcast chairman and CEO Brian Roberts disclosing Peacock had attracted 15 million subscribers (without Roku distribution) since launching nationwide in July. A closer look revealed that most of the subs opted for the free ad-supported option, featuring more than 13,000 hours of content.

“That’s 50% more subs than just six weeks ago,” Roberts said in September at the virtual Goldman Sachs 29th Annual Communicopia Conference. The CEO said the convergence of entertainment distribution between media and tech companies across multiple platforms has become a reality — driven by broadband and streaming video.

“We saw this coming and feel we are one of the best companies to play offense in this environment,” Roberts said.

In addition to current-season programming from NBC and Telemundo, Peacock offers access to Universal Pictures movies and live sports, including Premier League soccer and the delayed 2020 Tokyo Olympics.
“Across the board, we’re better than expectations,” Jeff Shell, CEO of NBCUniversal, said on Comcast’s most-recent fiscal call. “We didn’t expect this many sign-ups, we didn’t expect people to come back as frequently as they’re coming back, and we didn’t expect people to watch as long as they’re watching once they come back.”

Apple TV+ Battles Negative Media Mojo

Since its launch a week before Disney+ in 2019, Apple TV+ has struggled to achieve the same media support afforded Disney’s SVOD platform. Despite Apple’s record market valuation of $2 trillion, Apple TV+ is viewed by some observers as an ongoing missed opportunity. The $4.99 monthly service was recently judged as having the worst content (60%), the least amount of variety (64%) and the most unfriendly user interface (64%), according to a Flixed.io survey of 1,300 respondents. By comparison, the same respondents hailed Netflix for the best content (89%), content variety (88%), user interface (85%) and viewing recommendations (69%).

Bernstein analyst Toni Sacconaghi estimates that fewer than 10 million people have signed up for the free 12-month Apple TV+ subscription in the company’s most-recent fiscal quarter. He characterized the tally as “surprisingly low” for a brand as well-known as Apple. The company hasn’t officially released any video subscriber data. Apple just announced it would extend the free Apple TV+ trial period 90 days through 2021 for new Apple device consumers.

Research firm Antenna said Apple realized a 10% spike in new subs from March 14 to 16 as the coronavirus spread in the United States. The firm said the increase was the lowest of any major streaming service. Apple was reported to be spending $6 billion on original content in 2020 (before COVID-19), buttressing an original slate that includes “The Morning Show,” “Dickinson,” “See,” “Ghostwriter,” “For All Mankind,” “Helpsters,” “Hala” and “Little America,” among others.

“[Apple is] still not in [OTT video] with both feet,” media executive Barry Diller told a podcast. “They’ve put some capital in, but relatively little [for Apple]. They’re not making a major effort.”

Wedbush Securities analyst Michael Pachter contends that despite a major marketing effort around Apple TV+, the finished product thus far has been wanting.

“Apple TV+ only has a handful of original shows and no catalog,” Pachter said.

AVOD Comes of Age

Subscription streaming video’s rival, advertising-supported VOD, continues to gain traction among consumers — and advertisers. New data from eMarketer suggests AVOD revenue will grow more than 25% in 2020 compared to 2019.

The AVOD market, which is spearheaded by The Roku Channel, Hulu, Peacock, Redbox TV, IMDb TV, Pluto TV and Tubi, among others, saw ad revenue leap 31% to $849 million in the most-recent quarter, according to MoffettNathanson Research.

“AVOD advertising benefited from heightened usage and a mix shift in advertising budgets to OTT platforms, growing sizably in the quarter,” Nathanson wrote in a note.

Speaking Aug. 20 on the DEG: The Digital Entertainment Group Mid-Year 2020 Digital Media Entertainment Report webcast, Nathanson called AVOD the underreported streaming video story of the year. He said AVOD’s 28% market share behind Netflix and the other services reinforces the idea free access to VOD is gaining the most traction among consumers.

“That 28% of streaming minutes is where we think the streaming wars are actually happening,” Nathanson said.

With four of the five AVOD platforms owned by major media conglomerates, much of the ad growth is likely due to shifting third-party ad dollars from linear TV to connected televisions. The 31% rise in AVOD revenue among the top platforms compares with an estimated 28% decline in national broadcast and cable TV ad spending in Q2, according to eMarketer.

Eric Haggstrom, forecasting analyst at eMarketer, said he believes that while marketers are warming to AVOD, much of the revenue revolves around media giants pushing advertisers to proprietary streaming platforms.

“Some advertisers who bought ads in the TV network upfronts are shifting money within the same media company to streaming services,” Haggstrom said.

Indeed, Tubi earlier this year added all episodes of Fox’s “Gordon Ramsay’s 24 Hours to Hell and Back,” in addition to 300 hours of separate Ramsay content, which includes “Hell’s Kitchen,” “Kitchen Nightmares” and “The F Word.”

“Making this show available on Tubi, alongside Gordon’s other series, will only grow his footprint while also further promoting his programs on Fox,” said Rob Wade, president of alternative entertainment and specials at Fox Entertainment.

Tubi also added Fox’s music competition show “The Masked Singer.”

Ampere Analysis found that nearly one in five U.S. Internet users are using AVOD. Citing Q3 data, the London-based research firm said 17% of domestic Internet households used one or more AVOD services in the prior month, up from 13% in the previous-year period.

“The VOD market continues to expand and fragment, offering viewers more choice of platforms,” Minal Modha, consumer research lead at Ampere, said in a statement. “Free ad-funded platforms will find themselves well-positioned to attract an audience that is either unable or unwilling to pay for multiple subscriptions.”

The growth in AVOD seemingly contradicts some consumer sentiment about too much advertising on broadcast television. Ampere found that 44% of consumers surveyed in the U.S. said they don’t mind seeing advertising on TV.

Interestingly, Ampere doesn’t believe AVOD and SVOD are competing for the same audiences. Active AVOD users, according to Modha, tend to be older than SVOD subscribers, and are more likely to be from lower-
income households. About 25% of AVOD users are between the ages of 45 and 54, compared with 22% of SVOD viewers. And 19% of AVOD users are between the ages of 55 and 64, versus 14% of SVOD subscribers.

Nearly half of U.S. AVOD users have an annual household income of less than $30,000 per year, compared with a third of SVOD users. Almost 20% of AVOD viewers live in households with annual earnings of less than $15,000 per year.

“With distinct audiences, we believe that these two offerings aren’t competing directly with each other but rather can coexist,” Modha said. “We have seen some companies offer both a free and paid-for tier, such as Prime Video and IMDb TV, Hulu and Peacock. In the current climate, with both economic uncertainty and a greater need for people to stay at home, we expect the use of AVOD services to continue to rise as more consumers will be turning to these platforms as they seek entertainment without increasing their financial outlay.”

Streaming Wars: Media, Tech Companies Slug It Out With Netflix

In the weeks leading up to the November 2019 launches of Apple TV+ and Disney+, Wall Street analysts and company officials went into high gear with subscriber predictions, content reveals and special media events.

Each new service has a lot riding on it, with their high-profile parent companies spending millions of dollars wading into over-the-top video waters long dominated, on the domestic front, by Netflix, Amazon Prime Video and Disney-owned Hulu.

“Options are great for consumers when it comes to deciding what to watch,” said Peter Katsingris, SVP of audience insight at Nielsen. “But they’re also decidedly complicated for an industry that continues to fragment and search for unique ways to influence their behavior and perhaps steer eyeballs toward their network, program, service or brand.”

Disney expects to attract 60 million to 90 million subscribers for Disney+ through 2024, which would be more than half of Netflix’s current 158 million global subscriber count. It is giving away the service to Verizon’s unlimited data customers as part of a promotion.

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“What Netflix is doing is making content to support a platform,” Disney CEO Bob Iger told Vanity Fair. “We’re making content to tell great stories. It’s very different.”

Apple is targeting more than 900 million iPhone users worldwide through various incentives for Apple TV+.

David Sidebottom, analyst with Futuresource Consulting, said that as new OTT services expand on an international basis, colliding with legacy pay-TV agreements, mollifying distribution partners with differing levels of SVOD uptake will be factors in their evolving D2C strategy.

“Scale will be key in the [direct-to-consumer] space, but clearly the coming year is just the first phase in this era,” Sidebottom told the IBC365 platform. “D2C services will likely evolve, with their parent companies continuing to evaluate the benefits of D2C vs. third party [license] agreements.”

SVOD Minefield

As the subscription streaming wars heat up, most people (70%) believe there will be too many choices, and 87% worry it will become too expensive to keep up, according to a new study. TV Time, an online tracking platform for TV and movie viewership, along with UTA IQ, UTA’s data and analytics group, found that 42% of survey respondents plan to add another SVOD service, with 20% adding two. Conducted in September, the survey fielded 4,816 respondents in the

United States and 1,818 combined in the Netherlands, Canada and Australia. Disney+ and Apple TV+ had the highest levels of awareness (88% and 63%, respectively) among the upcoming services, followed by HBO Max (37%) and NBCUniversal’s Peacock (28%).

“While Disney+ appears well-positioned to succeed internationally, it may require additional focus in strategic markets to encourage people to subscribe,” Alex von Krogh, VP of TV Time, said in a statement. “It will be important to track how people engage with their programming from a global perspective and how that compares to competitors in those markets.”

Michael Pachter, media analyst at Wedbush Securities in Los Angeles, said he believes that with the surge of original content and catalog exclusives such as “Friends,” “South Park,” “Seinfeld” and “The Office” migrating online, consumers have more reasons to choose OTT. “If all that was happening were incremental services being offered, consumers might feel bamboozled,” Pachter said. “Instead, so much content is shifting to OTT services that many consumers will opt to subscribe to more than one service.” Pachter says long-term, exorbitant pay-TV contracts paved the way for OTT video, with online TV offering a less-expensive premium channel option. “I expect cord-cutters to look at rabbit ears and multiple SVOD services as a substitute. That’s why DirecTV lost 2 million subs since AT&T bought them,” he said.

More importantly, Pachter said that with Netflix losing Disney/Fox, NBCUniversal and Warner Bros. content, consumers will feel compelled to try new services offering recognizable programming and/or favorite shows. The analyst said he believes Netflix will lose around two-thirds of its content (measured in viewing hours) and will have a tough time replacing that with content of similarly perceived quality. Disney+ has an enormous library of content not available anywhere (including its vaunted library of animated classics, such as Snow White, Fantasia, Sleeping Beauty and, more recently, Aladdin, The Lion King, Cars and Finding Nemo) that will find its way to the service. The studio is also going to put its recent movies there and take those away from Netflix.

“That tells me that Disney+ gets to 30 million subscribers relatively quickly,” Pachter said.

Parrot Analytics tracked pre-release demand for Apple TV+’s original series, including “See,” “For All Mankind,” “Dickinson” and “The Morning Show.” Parrot found the shows were well ahead of the audience demand average across all TV shows in the United States over the same time period. “See,” a futuristic sci-fi drama starring Jason Momoa, and “For All Mankind,” which explores what would have happened if the global space race had never ended, 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,” starring Hailee Steinfeld as poet Emily Dickinson, registered 3.3 times the demand average, while “The Morning Show,” a comedy-drama series starring Jennifer Aniston, Reese Witherspoon and Steve Carell, managed 1.8 times the average in the United States during that time period.

A separate Ampere Analysis survey found “The Morning Show” would appeal to 35% of Apple customers (versus 25% of non-Apple device owners). “See” has a similar and strong appeal.

“Apple has a different business model from the other new platforms in that it is able to use Apple TV+ to incentivize device replacement — and therefore generate larger cash flow through those sales to fund content spend,”

Minal Modha, consumer research lead at Ampere, said in a statement.

The analyst found that the main barrier to uptake of Apple TV+ is a lack of interest in the offered content, which Modha said 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,” she said.

Parrot 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 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 for the Apple TV+ series to “The Handmaid’s Tale” season one demand over its seven-day pre-premiere period April 17-23, 2017. Internationally, the Apple TV+ shows don’t fare as well. 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,” Courtney Williams, head of partnerships at Parrot Analytics, said 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.”

Max is Coming

WarnerMedia isn’t launching high-profile HBO Max until May 2020, but that didn’t stop the former Time Warner company from unveiling the service Oct. 29 in a gala-like event on the Warner Bros. lot.

Pricing for the service is $14.99 a month — identical to the current HBO Now streaming service, which is being folded into Max. It will be aggressively marketed to AT&T’s 170 million mobile, broadband and linear TV subscribers. An ad-supported version of Max will debut in 2021.

“Just like cable introduced the rise of niche networks to dramatically grow audience, general entertainment streaming is the next great opportunity to aggregate and grow audience,” John Stankey, CEO of WarnerMedia, told attendees.

WarnerMedia is set to spend upwards of $2 billion annually on original content for Max, in addition to mining a treasure-trove of catalog content from Warner Bros., HBO and Turner.

Max will bow with 31 original series, increasing to 50 series by 2021. In all there will be 10,000 hours of premium content at launch, featuring 1,800 movies, including current box office hit Joker.

Wedbush’s Pachter is “pretty confident” the Max model will work, if it transfers existing HBO Now subscribers for a free probationary period lured by original content.

“If it’s $3 to $4 per month, they’ll get 10 million subs immediately and probably get to 80% conversion [from HBO Now] in a few years,” Pachter said.

Additional reporting by Stephanie Prange

Streaming Wars: Niche Services Soldier On

The streaming wars are intensifying, with established giants such as Netflix and Amazon gearing up for battle against big-money newcomers such as Apple TV+ (which launched Nov. 1), Disney+ (launching Nov. 12), NBCUniversal’s Peacock (launching in April 2020) and WarnerMedia’s HBO Max (launching in May 2020).

Indeed, in recent weeks the Hollywood trades — Media Play News included — have been filled with content reveals, lofty viewership projections and a fair amount of hand-wringing by analysts who wonder whether we’re heading for SVOD overkill.

But while the streaming goliaths are making a lot of noise as they go after each other with billions of dollars in content creation, acquisition and marketing funds — and an affinity for poaching showrunners and other executives from Hollywood, and from each other — a growing contingent of niche streamers continues to quietly march to its own drumbeat.

VET Tv is among them.

Launched in 2017 by retired Marine Capt. Donny O’Malley, the San Diego-based SVOD channel has about 43,000 subscribers who pay $5 a month to watch comedy sketches and series aimed at active military personnel. Shows such as “A Grunt’s Life,” “Drunken Debriefs” and “Kill, Die, Laugh” parody life in the service, with dark, irreverent, “inside” humor.

The steady flow of roughly $200,000 in monthly revenue is enough to allow O’Malley and his crew to produce a regular schedule of programming, with 13 series under their knapsacks and a 14th in production. The company has also just completed its first feature-length film — consisting of several “A Grunt’s Life” episodes, stitched together — which premiered Oct. 28 at the Rooftop Cinema Club in Los Angeles and is now available for streaming on VET Tv.

“If we can make a profit as filmmakers, no one and nothing else matters,” said O’Malley, who spent six years in the Marine Corps — including seven months in combat as a platoon commander and fire support team leader in 2012 in the Helmand Province of Afghanistan. “We’ve proved that we don’t need the studios to make a profit. We don’t need to compare ourselves to them, or any other business, for that matter. Our success comes from our ability to sustain this business model, and from the approval of our community.”

The key, O’Malley said, is to find an underserved niche.

“We got into streaming and VET Tv because we wanted to focus on giving our community exactly what they wanted,” he said. “The notion of pitching this idea around Hollywood producers never crossed my mind. We’re making this for the community and no one else. The customer is the gateway to success in this business. If the customer is willing to pay for the content, we’re on the right path.”

VET Tv is just one of hundreds of niche streaming services vying for eyeballs with carefully curated programming aimed at specific audiences with voracious, but narrow, appetites. Most follow the Netflix subscription model, offering unlimited content for a set monthly fee, generally in the $5 to $10 range. Others, including Tubi, offer their content for free, relying on advertisers to feed the kitty. Some streaming services were started by established broadcasting, cable or home entertainment companies. Among them are PBS Masterpiece Prime Video Channel, Comcast Cable’s Xfinity Flex, Dish Networks’ Sling TV, and HBO Max.

Others, like VET Tv, are independent startups.

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Over the past five years, according to Parks Associates, the number of streaming services has more than doubled to 271. The Los Angeles Times recently ran a series of stories about streaming and noted that subscribing to the top 41 services — a ranking that includes newcomers Disney+, Apple TV+ and Peacock — would cost consumers upwards of $400 a month, factoring in the additional cost of Internet service.

Mark Fisher, president of the Entertainment Merchants Association (EMA), knew there was a growing undercurrent of streamers earlier in the year when he teamed with Eric Opeka, the newly appointed president of Cinedigm Digital Networks, to produce an over-the-top (OTT) channels market and conference — OTT_X — in July 2019, alongside the seventh annual Los Angeles Entertainment Summit.

At the time, Fisher said, “The OTT segment of the video industry is growing tremendously and needs a premier event to bring key players together to do business, share knowledge, and expand their contacts.”

But even he was surprised at the turnout. “It was like the early days of the VSDA, with all these independent video retailers,” Fisher said. “The difference was that these were professional executives from existing and emerging companies, funded for growth. In fact, we had well over 400 people — not dozens of people from each of a dozen key industry players, but instead well over 100 companies represented by their key execs, meeting together and collaborating on making the OTT business — in all its business models (AVOD, SVOD, TVOD) — an efficient and effective way to provide entertainment to the consumer. Many of the workshop sessions were SRO, and we nearly ran out of food.”

Marc Rashba, a former Sony Pictures Home Entertainment marketing executive who is now president of MovieMethod LLC, a digital distribution partnerships company, agrees with Fisher’s assessment of streaming.

“Partners are telling me what’s happening now in OTT is analogous to the explosion of early days of cable,” he says. “While you have generalist providers like Netflix and Amazon, who are much like WGN and TBS in the early days, we’re seeing the explosion of niche providers who program to a very specific audience much like we saw with MTV, BET, CMT, Nickelodeon and more back in the day.”

Why are so many players jumping into the streaming business?

“What’s most exciting for content companies, and what they were not able to achieve in the home entertainment or TVOD space, is that they can finally develop a direct relationship with the consumer,” Rashba says. “Along with the data that comes from that relationship, studios can finally nurture the CLV (customer lifetime value, or a prediction of the net profit over the lifetime of the relationship) themselves and can maintain more control over their own future.”

Cinedigm’s Opeka attributes the increased interest in streaming to the recent rapid expansion of scale partners who are having a material impact on user acquisition and subscriber growth.

“Success in OTT for niche players used to mean a substantial investment in customer acquisition and technology, two areas extremely difficult for small payers to get a handle on,” he says. “Leveraging scale platforms like Apple, Amazon, Roku and, now, Samsung, Comcast and others have dramatically improved the unit economics for niche players and is leading to a rapid expansion of viable channels.”

Streaming services carry a wide range of programming, often with a very narrow focus. Pure Flix (pureflix.com) focuses on faith and family shows and in October bowed a new sitcom, “Mood Swings,” starring Donna Mills and Crystal Hunt. October also saw the launch of another streaming service aimed at families, Frndly TV.

They are far from the only niche streaming services generating a buzz:

• AMC Networks’ Acorn TV streaming video service features British and international episodic programming in the United States and Canada, with a focus on original and exclusive mysteries, dramas and comedies. In September, Acorn TV announced it topped 1 million subscribers. Charter Communications for the first time will include Acorn TV in its suite of SVOD services to Spectrum customers.

• AMC Premiere is an add-on to the AMC Networks’ pay-TV service, affording subscribers commercial-free viewing of original movies, TV episodes and exclusive behind-the-scenes footage. Premiere enables users to binge select series, including the Emmy- and Golden Globe-Award winning “Killing Eve,” “The Walking Dead,” “Fear the Walking Dead” and “The Terror,” among others.

• The Africa Channel is a showcase for English-language television series, specials, documentaries, feature films, music, soaps, biographies, current business analysis, and cultural and historical programs from the African continent. It boasts more than 1,000 hours of content and is available in more than 7 million homes in the United States and the Caribbean. In October, The Africa Channel introduced its service in Canada by launching on the subscription streaming platform Demand Africa. Dean Cates, VP of digital strategy for the new SVOD platform, says, “As a global OTT service provider, our goal is to make modern Africa’s influence and culture more accessible throughout the world.” Subscribers can view The Africa Channel for $1.99 per month or have it included free with their monthly or annual subscription to Demand Africa.

• BritBox launched in North America in 2017 to compete against Acorn TV. It features British-centric programming from the BBC, ITV and Channel 4. BritBox, with 650,000 subscribers, will bow service in the U.K. in the fourth quarter priced at £5.99 ($7.51) per month in HD.

• Hallmark Movies Now is an on-demand streaming video service offering family-friendly movies, documentaries and short films. The company was founded in 2007 by Academy Award-winning producer Robert Fried. It is owned and operated by Hallmark Cards and based in Los Angeles.

• Kanopy is a premium, free streaming platform offered through universities and public libraries and accessed with library or university memberships. Through partnerships with film distributors and studios such as The Great Courses, Criterion Collection, A24, Paramount, PBS and Kino Lorber, among others, it provides thousands of award-winning documentaries and films, contemporary favorites, classics, life-long learning courses and kids programming to public library members, students and professors at participating institutions. Kanopy is available on all major streaming devices, including iOS, Android, Apple TV, Android TV, Amazon Fire TV, Samsung Smart TV, Chromecast and Roku.

• NBA League Pass and NBA TV are owned and operated by the National Basketball Association, which for the first time has begun selling its branded streaming video service, NBA TV, without a requisite pay-TV contract. The service gives subscribers live access to out-of-market games. The league also offers NBA League Pass, priced from $119.99 annually, which gives subscribers access to commercial-free live streaming, archived games, condensed game replays, radio broadcasts, VR access and NBA Finals, among other features.

• Shudder is an American over-the-top subscription VOD service featuring horror, thriller and supernatural fiction titles owned and operated by AMC Networks. The service just renewed its first hour-long scripted series, “Creepshow,” which set records in terms of viewers, subscriber acquisition and total minutes streamed in its first season.

• Xumo is a free ad-supported TV service that delivers live and on-demand TV and movie channels, and is available in the United States on more than 30 different devices, according to the company, including Comcast Infinity X1 and Android TV. “We’re focused on bringing our service to the most-popular devices available and have expanded to a record number of new platforms this year alone,” notes Xumo’s SVP of product, Chris Hall. Xumo offers a library of on-demand content, including thousands of movie titles and TV shows such as “This Old House,” “Divorce Court” and “Unsolved Mysteries.”

One of the most-hyped streamers isn’t even in business yet. Quibi, the $4.99 monthly short-form video streaming service launching in 2020 from DreamWorks Animation founder Jeffrey Katzenberg and former HP CEO Meg Whitman, recently inked a distribution deal with T-Mobile. The app will deliver original video content no longer than 10 minutes in length from a variety of sources, including directors Sam Raimi, Guillermo del Toro, Antoine Fuqua, Steven Spielberg, Lorne Michaels and producer Jason Blum, among others.

“Quibi will deliver premium video content for millennials on a technology platform that is built exclusively for mobile, so a telecommunications partner like T-Mobile, with their broad coverage and impressive 5G road map, is the perfect fit,” Whitman said in a statement.

Indeed, T-Mobile has 83.1 million cellphone subscribers and 5G network ambitions. It also received FCC approval for the $26.5 billion acquisition of Sprint.

“Quibi is leading the way on how video content is made and experienced in a mobile-first world,” said Mike Sievert, COO of T-Mobile. “That’s why our partnership makes perfect sense — two mobile-centric disruptors coming together to give customers something new and remarkable.”

Q&A: Disney+ Content and Marketing President Ricky Strauss Discusses Service’s Launch

On the eve of the Disney+ launch, Media Play News queried Ricky Strauss, president of content and marketing, for insight into the new service’s strategy. Strauss is responsible for developing the strategic content vision for the service, overseeing development of the service’s original programming slate, production partnerships and content acquisitions. He previously served as president of marketing for The Walt Disney Studios. Blockbuster films that Disney delivered under Strauss’ tenure include Star Wars: The Force Awakens, for which Strauss was named Marketer of the Year by Advertising Age.

The official launch date of Disney+ is Nov. 12. How are you kicking things off?
This is a huge priority for The Walt Disney Co. and so we have tremendous support across the company. From parks to the cruise line and stores to a programming roadblock across ABC, Disney Channel and Freeform, we will be accessing an incredible number of touchpoints that allow us reach to millions of fans across our brands and around the world.

How important is original content?
Original content is a very important part of our strategy. Storytelling is the cornerstone of The Walt Disney Co. and the same award-winning creative teams behind the phenomenal success of Disney, Pixar, Marvel, Star Wars and National Geographic are creating exclusive original content for Disney+. We will launch with 10 original exclusive episodic series, movies and documentaries, and plan to premiere more than 35 originals within the first year.

Are you worried about devaluing Disney content by offering a buffet of it at such a low price?
The service has been priced based on our judgment that this delivers an excellent price-value proposition to consumers and positions us appropriately in the market.

Bob Iger has made Disney+ the company’s singular focus in 2019. How are you dealing with the pressure?
Pressure? What pressure? All kidding aside, yes, it’s a lot of pressure, but under Bob’s visionary leadership we are surrounded by the best and brightest in this business — all focused on making this a success. The energy and enthusiasm generated by working with such tremendous creative and strategic minds keeps us all going.

What are your thoughts on the competitive landscape?
It’s an exciting time and we believe we have a unique and significant role to play. Disney+ will compete based on the unparalleled strength of our brands, the quality of our intellectual property, and expertise in high quality video streaming. … Disney+ will have a robust library of some of the most beloved and storied brands in the industry, as well as a great slate of originals with a plan to continue growing over time. In year one, Disney+ will have more than 7,500 episodes of television and over 500 film titles which will include the most recent theatrical film releases. For fans of Disney’s brands, it will be an incredibly rich experience. Fans can revisit classics, explore new original stories from such epic cinematic universes as Marvel and Star Wars, and discover all new originals that exhibit the Disney storytelling ethos of creativity, innovation and imagination.

How can Disney lure subs beyond the Disney name and $6.99 price point?
The price point and the power of the Disney name are tremendous assets that offer a great deal of opportunity, which we will fully leverage. Beginning Nov. 12, consumers in the U.S. will also have the choice to purchase a bundle offering of Disney+, ESPN+ and Hulu (with ads) for $12.99 per month. The bundle offers a great value proposition, given the quality and breadth of content consumers will have access to across the three industry-shaping streaming services.

What impact will Disney+ have on the other streaming services, specifically Netflix?
We are focused on building our own best-in-class experience around the brands and stories that define Disney.

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Netflix Challengers: Are There Flies in the Ointment?

This is the month when the long talked-about “streaming wars” finally get underway — at least, the first round. Both Apple TV+ and Disney+ are launching in November, with two more heavyweights — NBCUniversal’s Peacock and WarnerMedia’s HBO Max — debuting next April and May, respectively.

Subscription video-on-demand (SVOD) pioneer Netflix has ruled the proverbial roost for years. Sure, Amazon Prime Video and Hulu have given Netflix a taste of competition, but Amazon Prime’s viewership numbers remain clouded by questions about how many people primarily sign up to get free shipping on hard goods — and Hulu has always been the home entertainment equivalent of a third-party candidate.

So with the November launch of Apple TV+ and Disney+, Netflix is finally facing some stiff competition, although, to be fair, both new services have inherent flaws that could impede their success.

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Apple TV+ is being launched by a technology company with no content to poach. As a result, the service’s success or failure hinges on the strength of its original movies, TV shows and other content. Apple TV+ readily admits, on its website, that “unlike most other streaming services, Apple TV+ does not include a back catalog of any kind,” and that “right now, the library of Apple originals in terms of raw numbers is quite small.” But the company is betting that the monthly subscription fee of $4.99 is low enough for curious viewers to take a chance on the new streaming service.

Disney+, on the other hand, comes from the vaunted Walt Disney Co., which has long held a Midas-like touch in everything from movies and TV shows to theme parks and toys. Disney is the only Hollywood studio with a viable consumer brand of its own. And executives are hoping that the Disney brand, along with a stable of acquired brands — including “Star Wars,” Pixar, Lucasfilm, Marvel and National Geographic — will not just provide the streaming service with a rich library of content, but also with strong platforms upon which to build original shows, such as the “Star Wars” series “The Mandalorian.”

Apple TV+’s challenge will be to produce a steady stream of top-quality, “must-see” originals, as Netflix has done. Netflix had the advantage of using studio movies and TV shows to captivate viewers while building up its slate of originals. But Hollywood has learned its lesson and is unlikely to feed another beast that may one day attempt to devour it, so Apple TV+ will have to go it alone.

Disney+, on the other hand, needs to get out of the recycling business. Even on the theatrical side, the studio’s success has largely been built on Marvel sequels and remakes of its own animated classics — and the team behind the new Disney streamer must encourage, develop and nurture new ideas and concepts if it is to pose a serious long-term challenge to Netflix.

But the streaming wars involve more than big guns. There’s a whole undercurrent of niche streaming services that cater to very specific audiences with targeted programming, such as VET Tv, a San Diego-based SVOD channel aimed at active military personnel with original shows such as “A Grunt’s Life,” “Drunken Debriefs” and “Kill, Die, Laugh,” which take dark, irreverent looks at life in uniform.

Parks Associates estimates that over the past five years, the number of SVOD services has more than doubled, to 271. And projections are that subscription streaming will grow at a faster clip than any other segment of home entertainment — almost as fast, one observer noted wryly, as traditional cable loses subscribers.