NBCUniversal set to face Apple in crowded streaming video market in 2020

AppleInsider

NBCUniversal plans to launch an as-yet unnamed streaming service in 2020, and could be a force to be reckoned with given the content under its umbrella.

A Steven Spielberg movie, 'The BFG.'

The service will include a mix of original video, archival material and licensed properties, Variety sources said. The service was later made official, and will be free for customers with TV bundles from Comcast or Sky. Those without will have to pay for a subscription, and everyone will have to pay extra to eliminate ads, much like Hulu. NBCUniversal in fact owns a major stake in Hulu.

Some of the bigger properties under NBCUniversal include not just NBC networks and Universal Pictures, but Telemundo, Universal Television, Syfy, USA Network, and film studios such as DreamWorks, Focus, Illumination, Working Title and Steven Spielberg's Amblin. That could help it compete with the likes of Disney, or even Netflix, which has had a years-long head start in the burgeoning streaming industry.

Apple is poised to introduce its own streaming service sometime this year, with over $1 billion invested in original programming. Initially, the company may make first-party shows free to watch on its hardware, counting on subscriptions to outside services to make money.

In the long term, Apple is allegedly pursuing "tentpole" shows that could prop up a paid-only plan. That may be a challenge if it doesn't abandon family-friendly content rules -- one of the appeals of services like Netflix or HBO Now is the ability to watch uncensored content.

bobolicious

...and so I have to ask if fragmentation may encourage piracy, simply due to hassle and cost...?

spliff monkey

The number of streaming services is getting ridiculous. Ultimately it will lead to people subscribing for a month max to watch a season of the show they can’t otherwise get and turn it off when they are done. That’s how I handle CBS for ST;DISCO.
NBC/Universal is especially silly since there will be a ton of crossover with HULU. So why get NBC ”only” when most of the same content and much more is on HULU. I’ve personally cut down to Directv Now and Netflix and I have more than I need already. 

zoetmb

I think we'll have a few years of all these separate streaming services.  Then they'll find that they're not profitable and there will be consolidation and licensing deals again.   Most people don't want to pay for more than 2-3 services tops and a majority probably won't pay for more than one.   And they all have to compete with Amazon giving Prime subscribers access to free video.    I think ego is driving this more than a coherent business strategy.   

mac_128

zoetmb said:

I think we'll have a few years of all these separate streaming services.  Then they'll find that they're not profitable and there will be consolidation and licensing deals again.   Most people don't want to pay for more than 2-3 services tops and a majority probably won't pay for more than one.   And they all have to compete with Amazon giving Prime subscribers access to free video.    I think ego is driving this more than a coherent business strategy.   

While they all have to contend with Amazon giving away free video to Prime customers, what they have to offer will be substantially limited as NBC/Universal, CBS, Disney/Fox, and ATT/WB pull their catalogue content back for their exclusive platforms. Unless Amazon and Netflix really step up their original programming game, they're not going to have much to offer besides that.

NoFliesOnMe

All I can say is that all these CEO’s need to pull their collective heads out of their arses and start looking at the bigger industry picture. If they keep behaving the way they are it will be the eventual death of the whole industry as the consumer will not support all of the individual entertainment subscriptions. Yes I do see it leading to an uptick in piracy, but that won’t be the big problem. The real issue is what happens when we hit a down turn in the economy (and yes the storm clouds are brewing), entertainment is one of the first budgetary things to go. I’ll admit, for an economically stressed consumer, eating out will probably go first before the subscriptions get canceled but if all the players have gone to their respective streaming corners and are only just surviving from subscription fatigue and the screws start to turn with a slow down in the economy, what will happen? And the bigger question, what about a recession? Especially if there’s a longer recovery period? If the market is all broken up there is no resilience to be able to weather a storm like that.
Just my 2 cents worth.... 

22july2013

NoFliesOnMe said:

The real issue is what happens when we hit a down turn in the economy 

Some business benefit from downturns and are can be hurt by upturns. For example the book business picks up in down economies because books are cheaper than travelling. And if your business makes more money in a sector than your competitors, then a downturn is an excellent opportunity to outlive your collapsing competition. It's all about market share, not profit levels.

stantheman

If a person has X-hours per day for watching TV and movies, then watching an NBC show reduces the amount of time that viewer has for other programming. Thus, the customer’s payment to NBC should be offset by a reduced payment to other content providers (ABC, Paramount, etc.), whose offerings were crowded off the viewer’s set by the (presumably) superior NBC show.

However, that trade-off can’t operate when content providers package and sell their shows independently. A single provider (like Netflix, Hulu or Prime) could address the problem by offering video content from *every source to viewers, and then compensating content providers on the basis of documented/monitored viewer interest — eyeball minutes of viewing.

I believe this is the direction that market forces are pushing the video entertainment industry. Broadly, this is an Apple Music-type outcome for video content. The same logic used above (i.e., the consumer has a limited budget and only X-hours per day to devote to entertainment) can be generalized to see why a single service provider like Apple Music May bundle all entertainment services: audio, video, books, podcasts, radio, magazines, games.