Personalizing Entertainment Packages Will Get Daunting

Content Insider #614 – Choices

By Miles Weston

“When
I discovered drugs, my world went from black and white to technicolor. I can
never give that up. So I tell people what they want to hear.” – Nic Sheff, “Beautiful
Boy,“ Amazon Studios, 2018

Was
listening to streaming music on our computer thinking about the changes we had
made in our TV viewing when Justin Timberlake came on.

About
half way through his song, we said to ourselves, “My gawd, he’s singing about the state of the television industry.”

The
song, What Goes Around Comes Around.

In
case you don’t know, here is some of the lyrics:

I
just can’t seem to understand
Thought it was me and you, babe
Me and you until the end
But I guess I was wrong

Should have known better when you
came around
That you were gonna make me cry
It’s breaking my heart to watch you run around
‘Cause I know that you’re living a lie
That’s okay, baby, ’cause in time you will find

What goes around, goes around, goes around

Maybe
we will, maybe we won’t.

We
never did like the relationship we had with the cable guy.

 It was sorta’ “take it or leave it.”

Most
people only had one service option for TV entertainment so it was, “here’s the
bundle, the price and support … when we get around to it.”

Then,
the internet/wireless got robust and reliable WiFi and 4G LTE service became
available. Netflix saw the opportunity to give you great content you could
stream OTT (over the top) to your smart 4K TV and even to your mobile device
when you wanted, where you wanted it.

Suddenly,
you had an option!

The
Netflix team started spending money on great scripts, great producers, great
production crews and technology that helped them determine what folks liked to
watch and how long they watched as well as insight into what else they might
want to view.

It
got to the point where now they have 60.55M subscribers in the U.S., 148M
worldwide and show no sign of slowing down.

It
looked good to Amazon and they already had great analytics about what customers
liked, didn’t like, bought and returned; so, they jumped in with Amazon Prime.

Hulu,
HBO, CBS, ABC, Telemundo, BBC, Sky, Foxtel, Quickflix, France TV, M6, ITV,
ProSiebenSat.1, Discovery, Rogers, Prime Video, Hotstar, Jooq, Fuji TV, Tencent Video, iQiyi, Youku Tudou and heck; every network, studio and
station around the globe jumped on the streaming bandwagon. 

It’s Only Civilized – You may hide it behind stuff or have it so big and
bold you have to brag or it’s just “what the heck,” but there’s a TV where you
live and probably a number of additional screens.  Not everyone does, but certainly you do. 

It’s
too good to pass up:

2.4B
households around the globe1.4B
worldwide households own at least one TV set (69 percent in developed countries)127.59M
households in the U.S., 120M with TVs108M
US households with broadbandU.S.
penetration projected to be 16.5 percent this year, 18.3 percent by 2023

The
market is so tempting that AT&T bought Times Warner for a whopping $85.4B
so it could have content to stream.

Not
to be outdone, Disney bought 21st Century Fox which included Marvel,
Hulu, ESPN, National Geo and “others” for $71.3B and plans to introduce Disney
Plus this year.

YouTube,
with more than 1.5B viewers worldwide, figured it was time to got serious about
this TV stuff and rolled out their streaming service – YouTube TV – across the
U.S. (just in time for the Super Bowl) and offering more than 60 channels, whichvaries
by location. 

Obviously,
they’re knocking on as many station/network doors as they can; so pretty soon,
you’ll probably be thinking of them the same way you think about your cable
bundle.

With
their deep pockets, it will be interesting to see how they expand internationally.

To
feel like they’re a major player, Viacom bought Pluto TV for a paltry $340M.

Analysts Fret – Financial and industry analysts get all worked up about
much Netflix and Amazon spend for new, original content, while the “old folks”
in the industry get a pass.  Maybe
investing today for tomorrow isn’t so bad after all. 

And
folks worry about Netflix content investment?

It’s
a market that is a long way from being saturated.

Digital
TV Research suggests global SVOD subscriptions will top 777M, up from 520M last
year.   

China
and the United States will generate more than 50 percent of the global SVOD
subscribers and nine other countries will have more than 10M SVOD subscribers
each.

While
Netflix and Amazon Prime don’t/can’t operate in China, the country will have
235M SVOD subscribers.

SVOD
revenue will reach $69 billion by 2023; up by nearly $44 billion since 2017.
The U.S. will remain the SVOD revenue leader by a considerable distance –
adding $17 billion between 2017 and 2023 to take its total to $29 billion.

Is
it any wonder people are shouting with glee that the cable bundle folks are a dying
breed?

Options Grow – While consumers around the globe have an increasing
variety of choices for the content they watch for new/different entertainment,
it’s also nice to periodically visit the old tried and true viewing
neighborhood to just remember.

According
to Leichtman Research Group, there are still 91.3M cable subscribers in the
U.S.; and globally, they will grow 4.8 percent through 2024 to 523M

To
ensure they stay relevant, cable companies are reinventing themselves … honest!

They’ve
begun:

Offering
service options – not just here’s the bundle, live with it including bundle
options (priced accordingly) Introducing
IPTV (internet protocol TV) services that allow customers to stream content to
their TV and mobile devicesAdding
various pay-TV options (depending on the carrier) like Netflix, Amazon Prime,
Hulu, Starz and regional pay options including sports channelsAdding
new streaming ad-supported channelsOffering
home security, smart home, wireless phone servicesUpping
their service/support game

To
win over the consumer, wireless carriers are beginning to roll-out 5G service
that promise download speeds of 4.5GB/s and median speeds of 1.4GB. 

It’s
great if you happen to be in one of the cities that have the infrastructure
built out and don’t move around too much.

To beat the competition, AT&T has
already introduced 5G E (eventually) service on their 4G LTE network.

For most folks, 4G LTE is good enough and
fast enough as long as you don’t benchmark your performance improvements and
compare the “super fast” service with your previous wireless service bundled
cost.

Broadcasters finished their ATSC 3.0
(NextGen TV) trials and are beginning to roll-out the new fixed and wireless service.
 

Designed for content, the service will
deliver 4K UHD content as well as enhancements – HDR (high dynamic range), WCG
(wide color gamut) and HFR (high frame rate) at 10GB speeds
(both directions).

Cutting Bundle – When folks say they’ve cut their connection with their
TV bundle they don’t often mean they have cut the cable because many use it for
fast, reliable connection to the internet. And the demand for cable speeds
continues to grow. 

So,
when we cut the cord for streaming, we didn’t really cut the cord; we just told
them we only wanted the internet to the house. 

We
know we said there wasn’t a lot of love for the cable guy but the option was
the AT&T dude/dudette and their smoke/mirrors. 

See, It’s Faster – 5G is going to be blinding fast – honest, so it’s easy
to see why AT&T decided to “upgrade” their 4G LTE and let your phone tell
you it was 5G E and yes, it costs a little more. 

Somehow,
when the company simply changed the marketing of  the same old service to 5G Eventually, it just
sorta’, kinda’ didn’t seem quite right – https://tinyurl.com/y7yhz2f5, https://tinyurl.com/y8q3wuxu.

But that’s us.

Yeah,
could have signed up with Verizon  (have
lots of respect for Hans Vestberg, their new boss) and waited for 5G to be in
place.

However,
since both the new wireless and NextGen TV networks are going to be available in
the roughly same timeframe (2023-2025) and will complement each other, we
figured we’d stick with the devil we know for our content.

We
do like the fact that Verizon isn’t wasting time 5G posturing but instead
focusing on getting the hard work done.

Then
too, the cable guy seems to have figured out that to keep your business,
customer service has to become more important … a little.

The
one thing we do know is that streaming is here to stay and growing … rapidly.  According to Cisco globally:

Consumer IP video traffic will be 84
percent of consumer IP traffic by 2022, up from 79 percent in 2017IP video traffic will grow 4-fold
from 2017 to 2022, a compound annual growth rate of 29 percent Ultra HD (4K) will be 22.3 percent
of IP video traffic by 2022, up from 3.3 percent in 2017 (89.1 percent CAGR)HD will be 56.8 percent of IP video
traffic by 2022, up from 46.4 percent in 2017 (34.2 percent CAGR)SD will be 20.9 percent of IP video
traffic by 2022, compared to 50.3 percent in 2017 (8.2 percent CAGR)IP video will be 82 percent of all
IP traffic by 2022, up from 75 percent in 2017Fixed/Wi-Fi was 43 percent of total
IP traffic in 2017, and will be 51 percent of total IP traffic by 2022Fixed/wired was 48 percent of total
IP traffic in 2017, and will be 29 percent of total IP traffic by 2022Mobile was 9 percent of total IP
traffic in 2017, and will be 20 percent of total IP traffic by 2022

In
other words, there’s going to be enough content out there.

Really – You cut your cable bundle for the right to pick your
own content to watch at your own time with your own screens.  You’re living the good life now until the services
start to add up. 

Lots
of folks cut their cable to save money and then subscribe to just the services
they want … freedom of choice.

So,
how did that work out for you?:

Internet
connection – $40-$60 per monthNetflix
– $16 per monthHulu
– $45 per month (limited commercials + live TV)Amazon
Prime  – $9 per month (plus free
shipping)YouTube
TV – $40 per monthDisney
Plus –????

Helluva’ deal!

Folks
are suffering from an embarrassment of riches when it comes to options, so we’ll
see a new type of bundling emerge.

Think
Roku or any connected box.

Yes, But – Sure, your personalized viewing bundle may be the same
as your old cable viewing bundle but what the heck, it’s yours and you picked
what you wanted not what they wanted to offer you … cool! 

Connect
it – or one of the other options – to your smart 4K TV or new 8K set even
though there’s no 8K content, figure out your own custom bundle for the number
of users/screens you want to use and BAM!! you’ve got your own
personalized bundle.

Of
course, things will change and so will your family’s and your tastes in
entertainment. 

News,
TV shows, movies, live sports/concerts, you name it; the selection (and cost)
will be daunting for many.

Some
people worry as David Sheff  did (but for
different reasons) when he said, “My son
is out there somewhere, and I don’t know what he’s doing! I don’t know how to
help him!”

Just
remember Justin’s song, “What goes around, goes around, goes around”