Covid-19 has accelerated a swathe of trends that were already apparent across the business prior to the pandemic, none more so than the ongoing – and industry-changing – transition towards global streaming services.
However, as exec moves and organisational streamlining continues at breakneck speed, what will happen once the dust settles on the current restructuring (particularly in the US) and what may we see emerge into this new landscape?
This past year has seen a swathe of prominent US execs leaving studios, many of them landing new posts – NBCUniversal snagging Warner Bros’ Susan Rovner as its new entertainment chief and Kevin Mayer’s bounce from Disney to TikTok to Access Industries among them.
However, some are yet to land and there is currently a wealth of talent going untapped. It is not unlikely that 2021 could see some green shoots springing forth as a wave of new start-ups get off the ground, with familiar, well-connected names at the helm. What better time for some top exec talent to take the opportunity to get started on some passion projects with a new label of their own?
We’ve also seen US studios cutting their numbers like never before, with The Walking Dead franchise owner AMC Networks this week among the latest, revealing that it is set to let go of around 10% of its US staff as it seeks to join the fray and refocus its strategy around streaming.
This is, of course, practically par for the course nowadays, and follows WarnerMedia’s latest round of layoffs, described by CEO Jason Kilar as a “painful” but “critical” step as it also attempts to double down on streaming. Disney too has slashed almost 30,000 jobs and enacted a wholesale restructure of its DTC operations, as has NBCU.
But the US is not the only territory where broadcasters are looking to rebuild their businesses around streaming – indeed, WarnerMedia and ViacomCBS have both already started to rejigs their operations worldwide. It is to be expected that other US-based giants will look at similar restructuring internationally, with potential job cuts in regions such as Europe and Asia.
With the biggest US names looking to take their streaming services global, it’s no surprise that other local players are looking to get in on the action too. Nordic Entertainment Group recently revealed that it is looking to raise $405m to fund the expansion of its streamer Viaplay – home to shows such as Wisting and Stella Blómkvist – into the US and across Europe, in a bid to more than double its current subscriber base.
There are plenty of other streamers in a handful of territories that could be poised to follow Viaplay’s lead by expanding for scale. Indeed, the BBC-ITV SVOD joint-venture BritBox has already talked up its plans to expand into 25 more countries, beyond its announced move into Australia, and AMC’s Acorn TV has moved into the UK. We are undoubtedly looking at an even more crowded global streaming market in the months ahead.
Another emergent trend that might well hit its stride in 2021 is that of the dual AVOD and SVOD model, so embraced by NBCU’s Peacock. ViacomCBS might be hard at work preparing to launch Paramount+, but CEO Bob Bakish made no bones about it when he recently highlighted the importance of the company’s AVOD services acting as a “gateway” to pay streamers. Andy Forssell, boss of Raised By Wolves streamer HBO Max, has likewise also teased that an ad-supported tier is on its way to the WarnerMedia service some time before its one-year anniversary in May 2021.
With major companies confident that this hybrid offering of subscription fee and subscription-free will appeal to consumers, what does it mean for Netflix’s global streaming crown? We’ve already seen AVODs starting to take a bite out of subscription service audiences in recent months, but it remains to be seen if Netflix’s new head of global TV Bela Bajaria, and her strategy of renewed focus on international programming, is more attractive to consumers than tightening their purse strings – especially during a time of global financial hardship. Netflix has consistently batted away AVOD but could market forces become too great to resist?
More pay TV pain
Whatever the future for streamers, things don’t look pretty for pay-TV services. Current trends suggest that for the first time ever, 2021 will see more people pay for online video services globally than for pay-TV.
This shift has been long expected, with most major TV & video companies refocusing strategies toward online video as discussed, whether launching D2C services or working through distribution partners and aggregators. But for those remaining, pay-TV faces a significant uphill struggle to recover from sustained losses exacerbated by the pandemic and ensuing lockdowns.
Earlier this week, Omdia – the analyst powerhouse that, like TBI, is part of Informa – suggested that the retreat of global cable TV would be a key trend in 2021. Online video will take its place as the main revenue driver, with the bottom line being that the damage to pay-TV will be “near irreparable.” Whatever comes after this revelatory of years, it looks like pay TV’s days are numbered.