Streamed to our limits?
We waited for one streaming service to come along and now they are queuing up, writes Raymond Snoddy. What impact will this have, and at what point do they simply start cancelling each other out?
The coming decade is going to be the era of streaming, or at the very least there is going to be a lot of noise about streaming.
Last week it was the new Apple TV service, this week a mega multi-million programme deal between BBC Studios and Discovery in advance of the launch of a new global Discovery streaming service due next year.
Once upon a time there was only Netflix, turned into a worldwide competitive phenomenon through the generosity of the programme rights owners who happily licenced their libraries and took the money and ran. Short-termism or what?
Then there was Hulu, Amazon Prime, BritBox in North America with the UK BritBox to come in the autumn, then Disney, Apple and now Discovery.
Looks like we are seeing a trend here. We waited for one streaming service to come along and now they are queuing up.
Viewers are going to be spoiled for choice and asked for multiple monthly subscriptions which they may or may not succumb to, and which may or may not take deep bites out of the viewing figures of the established broadcasters.
The BBC-Discovery deal is particularly interesting because it’s putting together an old relationship which worked well for both parties in the past.
It goes back to 1996 and a $600 million content and global partnership deal negotiated by the late Bob Phillis, the BBC’s deputy director general at the time.
Soon after, Discovery’s third network, Animal Planet, was launched in the US in co-operation with the BBC. The two co-operated on everything from Walking With Dinosaurs to Blue Planet.
The two have now “reignited” their former relationship and the ten-year deal includes access to the BBC’s world famous natural history and factual programming, history, science, animals up to and including the Planet Earth titles.
The lawyers must have been very busy because the over-arching deal also involves the divvying up of the UKTV portfolio of channels, a tidying up following the Discovery acquisition of the Scripps 50 per cent stake in UKTV.
It sounds a bit like a divorce rather than old partners coming back together again.
As a result Discovery will take full ownership of UKTV’s lifestyle channels such as Good Food, Home and Really, and the BBC gets channels such as Alibi, Dave, Drama and Gold.
What does it all mean?
The channel allocation makes sense in the scheme of things but it is the programme supply deal and the launch of the Discovery global streaming service that is most intriguing.
[advert position=”left”]
Discovery is a powerful player in the international factual market and could easily create a new streaming franchise for its speciality genre.
There are a few questions though. In a long press release from BBC Studios there was one missing word – BritBox.
Later this year – certainly before Christmas – the BBC and ITV plan to launch a best of British streaming service featuring library and future programmes aimed at the UK market.
It is unclear at the moment what precisely will be available exclusively given the intricacy of existing rights deals.
The BBC has just licenced 700 hours of box sets to Sky in the run-up to the launch of BritBox.
Carolyn McCall, chief executive of ITV, told journalists last week she knew in advance about the BBC-Sky deal and had no problems with it.
Yet where does BritBox fit into the grander scheme of the BBC-Discovery relationship?
The only clue that is provided is the proviso that the new 10-year agreement is effective “in all territories outside the UK, Ireland and Greater China.”
This presumably means that either the new Discovery streaming service will not be available in the UK and Ireland, or that if it is, the BBC factual programmes will not be seen on the UK service.
If it is not so, then BritBox will start to look like a poor, stunted, undernourished creature.
In the larger scheme of things what will all this activity in the streaming area actually mean and what will its impact be?
Consultants Deloitte believe that by 2028 the average household in the UK could be paying for an average of three streaming services.
There is a equal danger that the streaming services, despite obvious differentiation, will compete against each other and perhaps cancel each other out within a limited domain.
The viewing figures of the established broadcasters will inevitably take a hit over time, but the best guess is that the established broadcasters will still hold on to a critical mass of viewing – particularly live viewing.
As McCall emphasised, despite the already intense competition and increased catch-up choice, 80 per cent of viewing to ITV is still live.
Another intriguing aspect of the rise of the streaming services is what effect they will have on the high-end subscription companies such as Sky and Virgin.
In the face of more and more relatively inexpensive streaming services, exclusive sport will increasingly be important as the glue holding the big comprehensive packages together.
They could face a trading down to FreeSat plus a couple of streaming services – say Netflix and BritBox, supplemented by YouTube viewing, and for those who like their parcels deliver next day, Amazon Prime.
Should large package offerings start to fray at the edges it could lead to a reassessment of Rupert Murdoch’s decision to sell his stake in Sky and most of his television interests.
It was portrayed as a decision by Murdoch to cash in his chips because his company was not big enough to compete alone against a global giant such as Netflix.
That analysis was almost certainly correct, but what if Murdoch – by accident or design – managed to cash in at the very top of the market. He has certainly taken billions off the table.
Will Murdoch simply sit on his pile of cash and retire? Unlikely.
There will surely be more acquisitions to come.
But how will Rupert jump.
He couldn’t set up a new streaming service could he?