VOD : Linear is old tech - on demand is the future

[jfman]

Originally Posted by OLD BOY

You can't compare this with the energy companies, because there is no choice other than go with one of them.

Nobody forces you to subscribe to any TV service, do they?

I can compare them to the big six energy companies - I’m the one grounding my analysis in economics here, thank you very much. Having the choice of buying a service or not doesn’t mean competitive pricing.

Could almost anyone reasonably have the means to set up a rival streaming service? No. Barriers to entry are high. Pricing trends to oligopoly.

Could almost anyone set up an independent retail outlet to sell goods similar to those in a supermarket? Yes. As demonstrated my hundreds of thousands of small independent grocery stores, bakeries, fishmongers, off licences and others up and down the country. Barriers to entry are relatively low by comparison. Pricing trends to perfect competition.

[RichardCoulter]

Originally Posted by Horizon

Netflix is separate story. They had to build their content library up from nothing and to quote Reed Hastings, "they have to become HBO faster than HBO can become us." They've done it.

I would expect that the bulk of all the streamer's profits will be through DTC services, rather than going through a third party.


Just like the supermarkets, I don't expect anymore than half a dozen large players in this field and the compettion will be fierce. Whether they reach a equilibrium and prices stabilise, remains to be seen.

I never said that Comcast wouldn't be one of them, clearly they are, but more consolidation is coming and I'm certainly not clear what name plate will be on the front doors of the HQs of the Big 5 (or however many cos it will be) in the next five years, but probably Apple, Google, Amazon, Microsoft and Netflix.

John Malone has said himself that his empire would be better served by being part of a larger company.

---------- Post added at 10:24 ---------- Previous post was at 10:22 ----------

Originally Posted by Horizon

Numbers play a big part in this and will determine things and who the winners will be and who the losers will be. If, as I expect, Netflix get at least half a billion subscribers, spending $20bn on content each year becomes sustainable. Will Disney or the Apple owned Disney (as I expect it to be) will they catch up with Netflix? Will there be a third truly global player, a fourth and fifth? We'll probably know within the next five years.

As for linear tv, I've said before, what linear tv channels that remain in the future, I expect they will act like shop windows into the streaming services. Perhaps the big streamers will take ads, perhaps not, but the free services will be what linear channels survive and I expect most of the pay tv channels to wither away. Well, that's what Murdoch thought and as he sold the bulk of his empire on that belief, I go with that.

---------- Post added at 21:28 ---------- Previous post was at 21:04 ----------

And just coming back to the comparison with the energy companies, the big tech/media/telco companies may not get everything their own way.

I've spoken about for years about what I originally called the portals, which in today's terms would probably be called social media.

As well as the big media/tech companies, there could literally hundreds/thousands of sites producing quality content and people come together from around the world on their favourite subjects and chip in to fund it, what we would now call crowdfunding. These sites may not attract the big name actors or directors, but that does not mean they would all be rubbish or not find their own niche. Look at youtube. There's rubbish on there, but also quality stuff.

Discovery are working towards the idea that everything of theirs will be eventually distributed via VOD, with only one linear channel remaining as a Barker channel.

[OLD BOY]

Originally Posted by jfman

I can compare them to the big six energy companies - I’m the one grounding my analysis in economics here, thank you very much. Having the choice of buying a service or not doesn’t mean competitive pricing.

Could almost anyone reasonably have the means to set up a rival streaming service? No. Barriers to entry are high. Pricing trends to oligopoly.

Could almost anyone set up an independent retail outlet to sell goods similar to those in a supermarket? Yes. As demonstrated my hundreds of thousands of small independent grocery stores, bakeries, fishmongers, off licences and others up and down the country. Barriers to entry are relatively low by comparison. Pricing trends to perfect competition.

But we are not talking about the energy companies, are we? We are talking about media content.

You can compare that to the media industry if you like, but as discussed on here, you can also compare it with supermarkets. In the first example, prices are higher than we would like and cause governments concern. In the second example, competition between the supermarkets is intense and ensures low prices.

So yes, jfman, it's your choice which industry you compare with, but it's pretty pointless.really.

[jfman]

Originally Posted by OLD BOY

But we are not talking about the energy companies, are we? We are talking about media content.

You can compare that to the media industry if you like, but as discussed on here, you can also compare it with supermarkets. In the first example, prices are higher than we would like and cause governments concern. In the second example, competition between the supermarkets is intense and ensures low prices.

So yes, jfman, it's your choice which industry you compare with, but it's pretty pointless.really.

On the contrary, Old Boy, you can only compare it with anything you like with a flawed understanding of economics.

You are the one that has described restrictions on distribution methods, vertical integration and all the classic characteristics of monopoly and oligopoly. You have even described it as a market that multi-billion dollar companies will be unable to compete in. That’s not the conditions of perfect competition driving down prices for end users.

[OLD BOY]

Originally Posted by jfman

On the contrary, Old Boy, you can only compare it with anything you like with a flawed understanding of economics.

You are the one that has described restrictions on distribution methods, vertical integration and all the classic characteristics of monopoly and oligopoly. You have even described it as a market that multi-billion dollar companies will be unable to compete in. That’s not the conditions of perfect competition driving down prices for end users.

I have no recollection of ever stating that this will be a market that multi-billion dollar companies will be unable to use! That’s a conclusion you have drawn yourself.

What I see happening is more streaming services set up with a vast amount of content. Some will be subscription services, others funded by advertising and it would not surprise me if some offered both alternatives.

Some of them will be big, like Warner and Disney; others will be smaller, like StarzPlay. Whether the smaller ones will join together or not in time to compete with the giants, we shall see, but if they are cheaper, they could probably stand alone and not be absorbed by the larger providers in the short term.

You keep going on about economic viability, and I believe that in your head, Netflix and Amazon should not even be here! You disregard in your calculations the fact that Amazon is prepared to see their Prime streaming service as a loss leader to promote their retail business and that Netflix will continue expanding for some time yet. Obviously, there will come a point where they won’t have to spend such huge sums on their content and at that point they might be prepared to allow other outlets the ability to watch their content. This is already happening, by the way - Designated Survivor is now showing on pay tv channels. So that is further income for the streaming companies.

As far as the amount of new material being shown on the scheduled channels is concerned, we can already see how this is drying up. Unless they rely more on their own original material, they will be resorting to content already shown for a few years on the streamers and the films will be older too if the studios redirect their output. So Sky Cinema channels would suffer.

So the scheduled channels will suffer from reducing advertising revenues caused by poorer and/or older quality programming and existing viewer trends towards VOD.

[muppetman11]

Do you ever research anything before posting ?

Designated Survivor was a show originally shown on ABC (linear TV) Seasons 1&2 , Netflix with Entertainment One took over from Season 3 and also has access to the first two seasons.

[jfman]

Originally Posted by OLD BOY

I have no recollection of ever stating that this will be a market that multi-billion dollar companies will be unable to use! That’s a conclusion you have drawn yourself.

What I see happening is more streaming services set up with a vast amount of content. Some will be subscription services, others funded by advertising and it would not surprise me if some offered both alternatives.

Some of them will be big, like Warner and Disney; others will be smaller, like StarzPlay. Whether the smaller ones will join together or not in time to compete with the giants, we shall see, but if they are cheaper, they could probably stand alone and not be absorbed by the larger providers in the short term.

You keep going on about economic viability, and I believe that in your head, Netflix and Amazon should not even be here! You disregard in your calculations the fact that Amazon is prepared to see their Prime streaming service as a loss leader to promote their retail business and that Netflix will continue expanding for some time yet. Obviously, there will come a point where they won’t have to spend such huge sums on their content and at that point they might be prepared to allow other outlets the ability to watch their content. This is already happening, by the way - Designated Survivor is now showing on pay tv channels. So that is further income for the streaming companies.

As far as the amount of new material being shown on the scheduled channels is concerned, we can already see how this is drying up. Unless they rely more on their own original material, they will be resorting to content already shown for a few years on the streamers and the films will be older too if the studios redirect their output. So Sky Cinema channels would suffer.

So the scheduled channels will suffer from reducing advertising revenues caused by poorer and/or older quality programming and existing viewer trends towards VOD.

More conjecture with no evidence whatsoever.

It really is becoming tiresome. I can even see you resorted to throwing up a straw man in there by speculating on whether I think Netflix or Amazon should exist at all! You also make curious use of the word “obviously” and place an easily disputable point after it.

Originally Posted by jfman

More conjecture with no evidence whatsoever.

It really is becoming tiresome. I can even see you resorted to throwing up a straw man in there by speculating on whether I think Netflix or Amazon should exist at all! You also make curious use of the word “obviously” and place an easily disputable point after it.

This is O.B.’s M.O. ... surely you noticed before now?

You can add to that the other main strand of the arguments presented in this thread and other similar ones, basically “it’s what I like so obviously it’s what everyone else should like”. OB is always right. Experience is everything, remember.

[oliver1948uk]

1. Even OB admits his wife cannot cope with getting onto streaming services (different boxes; changing inputs etc) and I am sure there are millions more who just want to turn on the TV, press a couple of buttons and watch. If all the linear channels go and the ability to simply record and play back on boxes like the V6, how will all those people cope?
2. I accept we must constantly have new programmes produced but the idea that most people only watch newly produced content is ridiculous. Surely a great many channels ONLY show previously viewed content and several are very popular. Dare I say that much of the content on Netflix has been previously shown on linear channels. Having enjoyed series 5 of Line of Duty on BBC, I then watched series 1 to 4 on Netflix, though why BBC programmes are on Netflix and not iPlayer is a mystery to me.

[Mad Max]

Originally Posted by oliver1948uk

1. Even OB admits his wife cannot cope with getting onto streaming services (different boxes; changing inputs etc) and I am sure there are millions more who just want to turn on the TV, press a couple of buttons and watch. If all the linear channels go and the ability to simply record and play back on boxes like the V6, how will all those people cope?
2. I accept we must constantly have new programmes produced but the idea that most people only watch newly produced content is ridiculous. Surely a great many channels ONLY show previously viewed content and several are very popular. Dare I say that much of the content on Netflix has been previously shown on linear channels. Having enjoyed series 5 of Line of Duty on BBC, I then watched series 1 to 4 on Netflix, though why BBC programmes are on Netflix and not iPlayer is a mystery to me.

Really? I for one never watch repeats.

[denphone]

Originally Posted by Mad Max

Really? I for one never watch repeats.

You don't know what you are missing.

[Mad Max]

Originally Posted by denphone

You don't know what you are missing.

lol, i see what you did there, Den...........

[oliver1948uk]

Not everyone is able for various reasons to watch things first time round. Some things are certainly like to enjoy a second time. Why is there a market for DVD boxsets?

[Mad Max]

Originally Posted by oliver1948uk

Not everyone is able for various reasons to watch things first time round. Some things are certainly like to enjoy a second time. Why is there a market for DVD boxsets?

No idea, does zilch for me, a waste of money imo,,

[denphone]

Originally Posted by oliver1948uk

Not everyone is able for various reasons to watch things first time round. Some things are certainly like to enjoy a second time. Why is there a market for DVD boxsets?

Plenty in our household.

---------- Post added at 18:15 ---------- Previous post was at 18:13 ----------

Originally Posted by Mad Max

No idea, does zilch for me, a waste of money imo,,

Tell that to the Star Trek , Star Wars , LOTR'S , Harry Potter , Marvel , Game of Thrones , HBO , BBC , etc . etc , etc fans....