Hi
I’ve been lurking and watching this thread for months and finally decided I’d join the forum so I could chip in with some thoughts.
The burst of growth that Netflix and Now TV have enjoyed in the UK is because they’re new products which address a want for something between the ‘fat’ TV subs of Virgin Media and Sky and the FTA options.
Anything new which meets a desire/need will see good early growth but the demand for that product will still be limited and eventually uptake will flatten. Even with population growth, the untapped potential future market will reduce each year.
This has happened with smartphones, the iPad and 3D TV. It’s also why Virgin Media and Sky have seen subs slow, though this is also in part due to the presence of TalkTalk and BT TV which offer low priced pay-TV packages.
Those low-cost solutions also compete with, and lessen the appeal of, Netflix, Now TV and Amazon Prime because they provide ‘just enough’ extra TV for for people who don’t want to shell out £30+ per month.
We now have a host of firms competing for customers (who are expecting/demanding ever-lower prices) while also competing with one another for content rights.
The pull between these competing economic factors means broadcasters need to keep their non-rights overheads as low as possible and the cheapest solution for them is, and will remain, linear broadcast via satellite and aerial.
The idea that their response to falling audiences - assuming we accept that audiences would drain away as has been predicted - would be to sink hundreds of millions of pounds into data centres and new VOD infrastructure is fantasy.
Also, while SVOD services such as Netflix and Amazon may have some good original shows, they still rely on the BBC, ITV, the US studios and independent broadcasters for 90% of their content.
If, for example, ITV or the BBC decided that Netflix was draining their audience away they could simply stop supplying it with the shows it needs to convince customers that the service is worth £8pm.
Would a Netflix which lacked Benidorm or Doctor Who or Episodes or Miranda or Endeavour or Top Gear or Cuckoo still hold the same appeal? To some who just want to watch House of Cards, yes. To those expecting a library of content? Possibly less so.
The vast majority of original programmes available in the UK are commissioned by traditional broadcasters who increasingly are involved in the onward sale, repeats and home entertainment releases of those shows.
For example, ITV is aping the BBC in releasing more of its shows on its own DVD label and handling its own international sales.It also makes shedloads of cash making shows like Teen Wolf and Scream for US networks.
In short - they’re FAR LESS reliant on advertising revenue than was ever the case and they have options beyond selling shows to Netflix or any other SVOD provider.
They also have some of the UK’s top rated shows and so can afford to insist that audiences come to them on the platform they decide to make those available on - for the cost reasons I set out above, that will long remain a linear, broadcast channel.
As others on here have said, sports is something people tend to want to watch live. Whether it was shown on Netflix or Sky Sports or BT Sport that’s linear broadcasting. BT Sport is streamed on BT TV, but it’s not VOD or SVOD, it’s a linear channel with a schedule.
Netflix is not going to sink £3-4bn into the premier league just for UK rights because it would not be able to make back that money. It’s not going to grab rugby and the Champions League from BT or golf and cricket for the same reason.
The cost of taking top sports off of traditional broadcasters in each of the markets Netflix operates in would be ruinous under its current business model. And that’s before it had to start building the extra data centre and streaming capacity to cope with 2m+ simultaneous HD streams of Arsenal v Man U.
And for as long as people are paying for Sky Sports or BT Sport they’ll be susceptible to adding a few channels to their package for an extra couple of quid - channels which allow the broadcasters to better monetise their playout systems but which then dent the need to take up a SVOD subscription alongside the broadcasters’.
And those who’ve refused to move entirely to pay-TV, and those who have no interest in Netflix, NOW TV, BT TV or TalkTalk, aren’t going to vote for a Govt which threatened to lock the BBC up behind a paywall.
Even Sky has told MPs that the BBC isn’t set up to become a subscription service.
David Wheeldon, Sky’s Director of Public Policy and Public Affairs, has said:
“Marketing, managing customer relationships and ongoing subscription relationships, managing customer churn—all things that I do not think the BBC has any experience of—putting it firmly into a commercial environment. You would unavoidably change the nature of the organisation.”
http://www.publications.parliament.u...ds/315/315.pdf
When even Sky think it’d be a challenge and would change the BBC, why would any Govt even try making that case to voters? Why would it pick that fight?