YouTube eyes the channels model
Google is looking at leveraging its YouTube video platform to offer aggregated access and billing for streaming video services. This is the very model that Amazon pioneered and has also been adopted by Roku, Apple and Comcast. As consumers migrate further from cable to streaming video, there is a growing opportunity to increase user revenues by distributing services and taking a cut of the subscription fee.
The NPD Take:
- As more companies jump into the new streaming video distribution fray, we expect a similar curve as seen with vMVPDs. That is a crowded market that will eventually get thinned as viewers need just so many aggregators to buy from.
- From a consumer point of view content aggregation adds simplicity. It also adds the risk of consumer losing the ability to buy a-la-carte. These new multi video service aggregators may eventually migrate to channel bundling strategies akin to those of traditional cable and satellite TV providers in order to maximize revenues, albeit at the expense of consumer choice. Let’s hope not.
WWE Network rethinks streaming strategy
The WWE Network was among the earliest entrants into the direct-to-consumer video market. But the company is finding that sustaining subscribers isn’t that easy. In fact, they just reported a paid subscriber decline of 10% to approximately 1.42 million at the end of Q4. As a point of reference, the service peaked around two million subscribers. Due to these challenges they are evaluating other digital distribution strategies; among them it’s rumored that Amazon is the most likely suitor.
The NPD Take:
- While not niche, smaller players such as WWE are having a hard timing growing a subscriber base without the kind of supported distribution cable and satellite providers used to offer. This makes new channel aggregators such as Amazon and Roku attractive partners.
- WWE’s plight is yet another sign of the value of the bundle and path towards a re-bundling of services.
Tubi reached 25m MAUs
Tubi, the free streaming video service, just announced its monthly user base grew from 20 to 25 million between July and December ’19. Much of its growth is coming outside of the U.S. as they reported triple digit year over year viewing time in Canada and Australia. As such, the company is broadening its international footprint during 2020 with launches in Mexico and the U.K.
The NPD Take:
- What’s next? Bolstering content spending is key to continued engagement and minimizing churn.
- Maximizing ad revenues will be critical to sustaining revenue to allow for further content library expansion.