VOD wars are here

In 2007, Netflix started streaming (rather than mailing DVDs), really kicking off the world of “VOD” (Video on Demand), and starting the cord-cutting revolution. People, weary of $100+/month cable TV bills with 100+ channels of garbage, started to jump ship — cancelling their cable subscriptions and signing up for Netflix. Over the coming year, Hulu and Amazon joined the fray. More and more people “cut their cords”, but there was still a problem in that the really good TV was missing — HBO Now didn’t launch until 2015. But the flood gates have opened. Two significant things have happened: the cost of creating a VOD distribution platform (i.e., of building your own Netflix) has reduced dramatically; and the telephone and cable companies have consolidated both with each other, and with media companies. This means that the people who make the shows (e.g., HBO), now also own the distribution pipes (the cable, telco, and mobile networks that let you get broadband). They did this because the networks themselves were becoming “dumb pipes”, with the value going to the distribution networks (Netflix, etc…). However, the real value is the content (e.g., Warner Bros.). Now they’re all going to war over your VOD dollars. This will probably take at least a decade to play out, but over that time period, expect to see lots of changes — new services launched, services discontinued, shows moving from one service to another as the content owners change their licensing rights. You already have

  • Netflix ($8.99–$15.99/month, independent)
  • Hulu ($5.99–$11.99/month, joint venture between Disney and Comcast)
  • Amazon Prime Video ($12.99/month, Amazon)
  • HBO Now ($14.99/month, AT&T)
  • CBS All Access ($5.99–$9.99/month, National Amusements)
  • Starz Play ($8.99/month, Lions Gate)
  • SlingTV ($25–$40/month, DISH Network)
  • ESPN+ ($4.99/month, Disney)

But, coming soon …

  • Disney+ ($6.99/month or $69.99/year, independent, coming next week)
  • AppleTV+ ($4.99/month, independent, just launched this weekend)
  • HBO Max ($14.99/month, AT&T, coming May 2020, replacing HBO Now)
  • Peacock (TBD, Comcast, coming April 2020)

And this is just the beginning. Not only are there likely to be other entrants into the field, but who has which content will continue to change. Want to watch The Office? That will only be on Peacock. Friends? Only HBO Max. The Simpsons? You’ll need Disney+. Usually, when there’s a lot of competition, it benefits consumers. That may still be true, but expect a lot of confusion and change over the coming decade, and, if you can, avoid long-term contracts, as you’ll likely want to be changing your services on a regular basis.

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Chris Richardson has strong opinions on just about everything. Just ask.