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Streaming Is the New Cable

By Peter Suciu
Oct 17, 2019 4:00 AM PT
streaming services have been disrupting the pay-tv market

NBCUniversal last week named Matt Strauss, a longtime executive at Comcast Corporation -- the parent company of NBCUniversal since 2011 -- to oversee its new Peacock streaming service set to launch in April. Strauss most recently served as executive vice president at Comcast, where he oversaw Comcast's video, Internet and voice services.

NBCUniversal could have a lot riding on Peacock, as it is a late arrival in the streaming business. Its entry follows the launch of CBS All Access five years ago and recent announcements that Disney and Apple planned to join the fray. Unlike Amazon Video or Netflix, which offer ad-free content, Peacock will be supported by advertising. However, it will also offer an ad-free version for a still-to-be disclosed fee.

Whether Strauss will be able to ensure that Peacock can strut its stuff for viewers is a matter for debate, as the streaming market has become quite crowded. Even longtime market leader Netflix could be squeezed as it gets more competitive. The question is whether new services such as Disney+, Apple+ or Peacock will eat away at more established services' market share.

All About Content

It is unlikely that Netflix will lose its position as the leader in the over-the-top (OTT) streaming market, but viewers may start to be pickier about which services they'll subscribe to -- and content will determine that decision.

The most popular streaming service remains Netflix, followed by Hulu and then Amazon Video, according to a new survey conducted by HighSpeedInternet.com. Moreover, 69 percent of respondents also said they believed that content was more important than price when it comes to streaming services.

Sixty percent of respondents to HighSpeedInternet.com's survey said they would keep Netflix in lieu of subscribing to Disney+; but about two-thirds said they also would sign up for Disney's streaming service, which is set to launch in November.

It comes down to the most desired content.

"Consumers are overwhelmed with streaming options at the moment, but Disney+ already boasts some great content, like Marvel and Star Wars," said Victoria Merinda, staff researcher at HighSpeedInternet.com.

"In our survey, we asked if Star Wars and Marvel would influence their decision to sign up for Disney+, and 60 percent of people said yes," she told TechNewsWorld. "This is a huge part of what is driving people to want to sign up for Disney+."

OTT Networks

The launches of Disney+ and Peacock also suggest that content may not be so agnostic -- as in the old Netflix model. For many years Netflix in essence was a repository of programming from U.S. broadcast networks, basic cable channels and even some pay-TV services, not to mention its in-house exclusives and international exclusives.

Now the Marvel and Star Wars movies will leave Netflix for Disney+ -- but so will other Disney-produced TV content that may have aired on the Disney Channel or even Disney-owned ABC. A lot will be tied to the production house, of course.

Then there will be the exclusive content for each service. CBS All Access, which offered the catalog of programming that aired on the Eye, also launched with exclusive content that didn't air on its broadcast channels. That notably included the latest Star Trek series, the Good Wife spinoff and a reboot of The Twilight Zone.

"With the launch of these streaming services, viewers will have to go to the different content providers to see the specific content," said Greg Ireland, research direct for consumer digital transformation and multiscreen video at IDC.

"NBC has announced its own service that will launch in 2020, and CBS' success is part of the motivation," said Brett Sappington, senior research director at Parks Associates.

"NBC also wants to gain a foothold in the OTT space rather than being left out," he told TechNewsWorld.

New Battle Lines

With traditional broadcasters launching stream services, there will be new battle lines. More importantly, those new streaming services eventually could replace the traditional over-the-air (OTA) broadcast networks.

Instead of production houses and studios selling content to a broadcaster, the mergers and acquisitions in the industry have created a new model: The content producer is now also a content provider.

Peacock and Disney+ are just two examples of this.

Comcast owns NBCUniversal, which is why the company already is transitioning from a cable company to a media company that offers fast broadband.

"Comcast sees that the market is changing, and Peacock will enable it to deliver the content in a new way," IDC's Ireland told TechNewsWorld.

"Disney essentially owns Hulu now, and has the Fox assets, while AT&T has Time Warner," he added.

"Streaming services also provide a hedge for cable networks, allowing them to get content to consumers regardless of pay-TV distribution," explained Parks' Sappington. "This approach also allows the networks to maintain their audience when carriage battles and blackouts occur."

Get It la Carte

Netflix, Amazon Video and Hulu of course were the original disrupters to the traditional pay-TV market, giving viewers the ability to shift both the time and location of their content consumption. That disruption is why Comcast -- the largest cable provider in the country -- has been making such a pivot away from what long has been its core business.

OTT streaming services now provide essentially the same content that one can get via cable or satellite but in a more la carte way.

"Hulu Live TV is an example where you can now get prime time programming without the need to have cable or satellite," said Ireland.

This could solve a complaint for consumers who often pay for cable bundles that include hundreds of channels, but then only watch a handful.

"One could actually make the argument that the traditional pay-TV model was good on a per-channel basis, as la carte could cost more," Ireland pointed out.

"OTT will lack the diversity of a cable lineup, but it will allow the customer to pick and choose exactly what they want," he noted.

"The availability of hundreds of streaming services, particularly those such as HBO or CBS that have recognized brands, does provide consumers with ample reason to drop their pay-TV service -- or to never subscribe in the first place," suggested Parks Associates' Sappington.

"It really gets down to what content and experience consumers want," he said. "OTT services allow consumers to pay less but receive less. Those that want live channels and certain live sports typically are pay-TV customers."


Peter Suciu has been an ECT News Network reporter since 2012. His areas of focus include cybersecurity, mobile phones, displays, streaming media, pay TV and autonomous vehicles. He has written and edited for numerous publications and websites, including Newsweek, Wired and FoxNews.com. Email Peter.


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