Content has become the key battleground and the main route for differentiation if you are a media company looking to stand out in the crowded premium video marketplace – especially if you have a streaming service. So, the fate of the content rights owned by major studios is going to help shape the television industry as we look ahead.
These are two observations from Guy Bisson, Research Director at Ampere Analysis, whose company has been crunching the numbers on the kind of catalogues Disney, WarnerMedia and others could offer on their direct-to-consumer services if they stopped licensing rights to major SVOD services like Netflix and retained them exclusively. What the data shows is that a ‘keep-it-in-the-family’ strategy would put some incumbent studios and channel owners in a strong position – assuming they can afford to give up on the licensing revenues.
Drawing on Ampere’s content analytics tool, which provides extensive detail on what people are licensing on a title by title basis, Bisson reveals that studios license nearly 12,000 hours of content each, on average, to SVOD platforms that they do not own – like Amazon, Netflix and Stan. If that content was repatriated, the biggest streaming services from incumbent media owners would no longer be dwarfed by the SVOD majors, who have an average of 42,000 hours of content in their services.
Under this (repatriation strategy) scenario, a service containing Viacom and CBS content would have over 20,000 hours of content but a Disney/Hulu combination would have 57,000 hours of content. And in the meantime, Netflix would be looking at a 27,449 hour catalogue. To put these figures in a wider context, NOW TV, Sky’s UK virtual Pay TV offer – which gathers content from multiple content owners – has around 20,000 hours of content, according to Ampere Analysis.
“So, if studios do begin to pull content off [the SVOD majors] when going direct, that is clearly a significant shift in the market,” Bisson notes. He thinks it is a reasonable assumption that they will remove the content from companies like Netflix and Amazon, though not everyone will do it immediately. His summary of content owner intentions in the streaming market is: Disney will keep all its rights to itself; WarnerMedia will want to keep its own rights, at least for now; Some of the smaller content owners will take a mix-and-match approach depending on the market.
The possibility that the growth of direct-to-consumer services could reduce licensing deals is focusing minds. “Everyone is becoming a studio to fill the gap left by the majors if they pull their content out,” Bisson told an Ampere Analysis gathering in London during April. “Everyone wants to be a studio. If you are a pure-play distributor, I would think about diversifying your business very quickly.”