If you haven’t already noticed, the world of streaming is in a state of fragmentation, with many major networks reaching exclusive partnership deals with specific over-the-top (OTT) content providers, while others are creating their very own exclusive streaming services. It’s a big challenge that media companies who have adopted the subscription billing model will have to adapt to, especially for players whose main strategy is attracting huge audiences by offering something for everyone.
Already, major OTT content provider Netflix has lost many of its legacy shows and movies created by other studios as their licenses expired and became open for new deals with other providers. In June 2017, Hulu and 20th Century Fox Television announced a deal that added nearly 3,000 episodes of comedies, popular dramas, and iconic TV shows to Hulu’s roster of content. These initially included the likes of How I Met Your Mother and Glee, with other popular shows like Family Guy, One Tree Hill, and Prison Break also transplanting later. In September 2017, NBCUniversal followed suit, moving the television show 30 Rock to Hulu from Netflix, its long-time home. Hulu also struck non-exclusive deals to pick up many other shows from NBCUniversal and other NBCU-affiliated properties.
The Streaming Wars
The transfers to Hulu made absolute sense to both 21stCentury Fox and NBCUniversal, since these companies have large stakes in the former. Hulu is a joint venture among The Walt Disney Company (30% stake via Disney-ABC Television Group), Comcast (30% stake via NBCUniversal), 21st Century Fox (30% stake), and Time Warner (10% stake via Turner Broadcasting System), which means that Hulu’s library is mostly filled with shows and movies that are owned by these companies.
On the other side of the spectrum are media companies that are taking the opposite approach by keeping their media libraries to themselves and launching their own over-the-top streaming services. These include the likes of CBS and its sister company Showtime, as well as HBO, which operates the HBO Now platform. In August 2017, media conglomerate Disney also announced that it will debut its own streaming service in 2019, adding yet another player to the streaming wars. As already mentioned, Disney already has 30% stake on Hulu, and soon, and it will have even larger share of ownership, given its future acquisition of 21st Century Fox.
What Subscribers Can Expect in the Future
The fragmentation of the streaming ecosystem has prompted observers to foretell a future where everyone, from OTT content providers to their customers, are all losers. In an article published by Vox in late 2016, the author expressed his fears that in the near future, the streaming wars will lead to more media networks striking exclusive deals with OTT players or launching their own streaming services that cord cutting will become more expensive for people who don’t want to pay for cable services. Think of it this way: when the type of content that a particular subscriber wants is spread in so many different streaming services, it will be highly disadvantageous for that person to rely on streaming because by then, he or she will have to pay for multiple streaming services. The unsavory alternative? A move back to cable subscriptions.
Conversely, it is also possible that media companies will not make all of their content exclusively available just on their own streaming platforms. Disney, for instance, is likely to maintain many of its properties on Netflix, even though they are launching their own streaming service. These properties could include the likes of Marvel Television’s five Defenders series, given these shows’ high ratings on Netflix’s 120-million-subscriber platform. Moreover, Disney is also likely to maintain its ABC and Fox titles on Hulu, considering that the new Disney steaming platform will not be carrying adult programming.
Nevertheless, the competition among networks and streaming services will likely drive the growth of original content creation, particularly for the likes of Netflix, which don’t have the backing of four major networks to provide it with a constant stream of new content. It is possible that this is how it will part ways with its competitor Hulu when it comes to content strategy.