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.”