It’s a new Golden Age of TV, we’re told – but is the golden age of low-cost streaming about to come to an end? Netflix and its competitors have reeled in millions of subscribers with both original, ground-breaking content and endless reruns of evergreen favourites. But the era of thousands of hours of premium TV for a relatively low price is nearly over.
Taking back control
Of course, it’s not that Disney and other big content creators aren’t making money by allowing their content to appear on different platforms. But they can make a lot more money in what’s now a tried and tested market. Now they’ve realised just how lucrative the streaming market can be, they’re no longer content to sit back and allow their films and TV shows to be out there under the banner of another company. So they’re taking back control, launching their own streaming subscription services, and hiking up the price.
Who are the main players in the post-Netflix streaming universe? Biggest of all is the afore-mentioned Disney, which now owns Marvel, Pixar, and Lucasfilm, plus a substantial part of 21st Century Fox. Its Disney+ service will include the Star Wars brand, the Marvel films, the Pirates of the Caribbean franchise and massive TV brands such as The Simpsons and Family Guy.
Familiar content will also play a big part in NBCUniversal’s as-yet-unnamed new streaming platform. The Office’s American version isn’t new, but it continues to pull in viewers by the million – The Office alone accounts for 3% of all Netflix views in the US. Rumour has is that The Office will leave its current platform on Netflix early to go to NBCUniversal’s platform (costing the company a cool $500m), which is apparently coming in 2020.
Apple is on the case too, with its Apple TV+ streaming service due to launch later this year. With no big franchises or TV legends, Apple is putting its faith in new shows with big names – a big deal with Oprah Winfrey is in the works, and already-announced projects include Reese Witherspoon drama The Morning Show, and Battlestar Galactica helmer Ronald D Moore’s sci-fi epic For All Mankind.
And even the BBC and ITV are getting in on the new streaming craze, with Netflix rival Britbox due to hit our screens this year, carrying big hits like Love Island and Gavin and Stacey.
So how will this new landscape affect our viewing habits? How we watch TV has already undergone a seismic change over the last decade. When Netflix launched in 1997, it was a DVD rental service: the tech simply wasn’t up to streaming back then.
Twelve years later, it has around 120m subscribers, and ‘Netflix and chill’ has become part of the culture. Other big players like Hulu quickly followed, and companies were quick to see the potential: Amazon launched its streaming service in 2011.
And, of course, we’ve seen these upstart streaming services become rival creators, too. Stranger Things, Orange Is The New Black and The Crown are all Netflix productions, while Amazon has seen recent hits Good Omens and The Man in the High Castle. If you want to watch the latest show that everyone’s talking about, you have to pay.
That means the financial model of how we watch has changed, too. At the turn of the century, most UK viewers paid a single licence fee to the BBC. Now those same viewers are paying for streaming services and a TV license, even if they don’t watch traditional television channels.
It could well be that the BBC will have to look to a subscription model of funding in the future, as resistance grows to the idea that you should pay for a channel you don’t even watch – and shell out £5.99 a month for Britbox. The free TV licence for over-75s will be gone next year, and more than 860,000 people cancelled their licenses in 2016/17.
With so many different services launching, and the big creators taking back control, we’re likely to see current established services like Netflix lose their grip on our TV habits as our viewing habits fragment even further, and viewers are forced to choose what they can afford to watch. Could the next decade see Netflix fade into obscurity, considering its balance sheet is in the red? It’s unlikely – but that’s what they said about the rise of streaming.
Important disclaimer: this document is not an official research report and the views expressed in it are those of the authors. The authors are not registered research analysts and there is no assurance the trends mentioned will continue or that the forecasts discussed will be realised. Gold as a commodity is not a specified investment for the purpose of giving advice under the Financial Services and Markets Act 2000, therefore, it does not give rise to rights to claim compensation under the Financial Services Compensation Scheme.