Apple has recently announced the upcoming launch of their new streaming television service. Disney has just launched their own streaming media service; featuring some of the biggest blockbuster film franchises (Marvel, Star Wars, etc.) along with their entire back catalogue of film and animated classics. While these are some of the most recent developments, the rise of streaming media, in film and television, is already having a profound effect on both producers and consumers.
What are you watching?
Within a relatively short period of time, services like Netflix have become giants within the film and television sector. Their role in providing access to 'back catalogue' as well as producing original content has made them a new kind of media company.
As with music, the shift to a streaming model of distribution and consumption is relatively recent. Netflix, currently the largest streaming video content supplier, began their shift from DVD rentals to streaming video in 2007.
In a little over 11 years, they have grown to serve 190 countries and more than 140 million subscribers. In addition to streaming video content, produced by other companies, they are an increasing presence in the production of their own original shows.
In recent years, additional services have begun to compete with Netflix. Launched around the same time, Amazon Prime Video has about 125 million subscribers and is also becoming a producer of original content. Similarly, both new and existing providers have launched services. Hulu, Sling, NowTV, HBO, CBS as well as others, are seeking to leverage their existing catalog and to open new markets.
Leveraging their existing customer network, based on sale and delivery of physical goods, Amazon has become one of the major players in the streaming video market.
All of these services are referred to as ‘on-demand’ meaning you choose what to watch and when you want to watch. There is no scheduled programming, as you would find on terrestrial channels or cable television.
Like podcasting, streaming video (meaning both television and films) are user-choice models of consumption. This, like in podcasting, allows these companies to produce original content that would not, typically, be supported by the major broadcast networks.
Video streaming services do not rely on advertising revenue. This provides a level of freedom in programming and content that broadcast networks cannot achieve. Thus, if you are a subscriber you don’t have to sit through ‘commercials’ and you have chosen the content that you want to watch.
Investing in original content
New media companies, like Hulu, have been able to develop programs that are more challenging and diverse, as they do not need to rely on commercial advertising revenue.
The original content being released by Netflix, Amazon and Hulu; to choose only the most prolific, are also offering filmmakers new opportunities to tell stories that the Hollywood studios or television networks may not have been interested to develop. Whether this is because the story is more challenging than the network could support (again, possibly because of the need to keep advertisers engaged), or the length of time needed to tell the story would result in a film that is longer than cinema release would accommodate, or the story is in a language (for a market) that is not sufficiently profitable for a major studio release.
Hulu produced the award-winning and uncompromising ’The Handmaid's Tale’, based on the novel by Margaret Atwood. While an earlier film version (1990) was released, the 2017 streaming version was able to tell a story closer to the written version over an extended period.
Amazon’s ’Transparent’ (2014) tells a story, of a gender transitioning father and his family, that mainstream television would be unlikely to have been able to approach.
Netflix’ latest success is the Mexican drama ‘Roma’. Directed by Alfonso Cuarón, this is a story of a 1970’s domestic worker and the family she works for. While Cuarón is a highly respected director, Hollywood was unlikely to develop a Spanish-language film for general release.
The long-term value of content
The benefit that streaming services have, is that they have less need to achieve profit in the short period of cinema release. If the presence of a film or television programme is available on their service, they can continue to offer it over a much longer period of time using it to invite users to subscribe to their service.
Streaming video services also allow the existing television and film studios to profit from their ‘back catalogue.’ A company like Warner Media (formerly Time Warner), has a catalogue of around 7500 feature films (ranging from the Wizard of Oz to the Harry Potter films and the DC Universe franchise) and 4500 television programmes (each with anything from 10’s to 1000’s of individual episodes).
While Warner Meddia are said to be launching their own streaming service, they currently have deals with Netflix and Amazon to stream their content. Such relationships mean that a catalogue that might have sat idle, making little or no revenue for the company, can now start to generate income.
As more and more specialised streaming services become available, consumers will be able to choose those services that provide content that is of most interest. Are you into classic Hollywood films? Do you have a penchant for ‘Grindhouse’? Musicals? Animation?
There is also an inherent risk in this continued fragmentation of the streaming market. How many services will consumers be willing to pay for? At present, there is still some convenience in the fact that Netflix has a good range of films and television shows that are not available via Amazon. But, as new services enter the market there is likely to be a reduction in the content for existing services to offer.
It has already been announced that the launch of Disney’s streaming service will mean that Star Wars films, Marvel films and other Disney properties will no longer be available on other services. Disney wants you to subscribe to their service; in order to watch their content.
It is unlikely that Netflix or Amazon will lower the cost of their services, so if you want Netflix-only content, and Amazon-only content, along with Disney content, you’ll be shelling out for another subscription. If Warner Media launches a service, will we also have to take out another subscription? At some point, consumers will reach subscription fatigue.
Some of the major film studios have begun to worry that the rise in original content streaming is diminishing the demand for people to visit the cinema. While it is certainly the case that some films are an ‘experience’ best suited to the large screen, there are also films which benefit from the intimacy of the sitting room.
New model, new choice
Traditional film and television companies face the challenge of developing content that is best suited to the cinema and terrestrial television, or joining the streaming market (which many of them appear to be doing). There is something of a ‘scramble’ to get content online and streaming. Streaming video offers consumers greater choice, and access to new types of content, all of which is no bad thing.
The film industry is about 100-years old; with the first films appearing in the late 1890’s. Television is only slightly younger, as the first commercial television station began in 1928. As mass-media, available to a global population, they are much younger. Streaming media is the latest stage in the development of these media. The shift to digital on-demand film and television content is already changing the industry - creating both new alliances, new power centers and, at the same time, opening new opportunities for artists.