We’ve been reaching tipping points left and right in the streaming biz but a rather central one is this: As MVPDs begin offering more and more pay streaming services in their packages, the inevitable question becomes: How much is too much?
And what is perfect?
Usually the answer I hear is something low-ish. After all if I’m paying through the nose for cable, I’d like some relief, right?
Alan Wolk,one of the smarter guys out there standing at the intersection of consumerism and technology, has been thinking about this point. As the expert-in-residence for the advisory and investment firm, BRaVe Ventures, he’s floating a somewhat different scenario, especially compared to another research paper from GfK.
That report, “Comparing Streaming Services, 2016” (snappy!) warns that Netflix and Hulu and Amazon Prime will all be forced to become reliant on advertising support because consumers just won’t pay a whole lot more than the $10 or $11 a month they’re paying now to get them. And, the study notes, it is cost--not the promise of exclusive content--that motivates consumers to keep (or presumably, jettison) those services. (But exclusivity is steadily climbing the list.)
If all of streaming’s Big 3 are going to keep producing more original fare, the money has got to come from somewhere. GfK says that somewhere is some clever ad model.
Anyway, Wolk says: No.
“As for the streaming services being too expensive, we’re a bit skeptical on that,” he writes. “People tend to be poor judges of how much they’d pay for things. . . Given the wide array of TV shows and movies Netflix has available, we think the subscription price can go up to $20/month, and it will still seem like quite the bargain.”
Could be. For me, that $60 tab for all three is something I might do, but not without trimming somewhere.
That becomes Wolk’s point, too: “What’s more likely to happen is that people will start to look at their total TV bill. . . “and realize that they’re paying a lot of money for everything even though they’re spending most of their time with the Big 3—Netflix, Hulu and Amazon.”
What if the MVPD selling you the package does something different? They’ll give you the Big 3, plus HBO and Showtime and a “skinnier bundle” and in Wolk’s world, they’ll charge just about what you pay for a cable/satellite top-of-the-line platinum package now.
In his view, “the package won’t be cheap, but most viewers aren’t looking for cheap—they’re looking for something that reflects what they watch on TV. Throw in a well-designed interface—something that looks more like Roku and less like Atari, and you’ll have a sizable segment of your user base—call them 'heavy users'—who are actually happy(ish) with the service they’re getting.”
Wolk also authored the book, Over The Top: How the Internet Is (Slowly But Surely) ChangingThe Television Industry has obviously spent a lot of energy predicting how the book's title will come more and more obvious. He's on to something.
He unleashes his inner-cable package prowess by even proposing new tiers for more bucks that would eliminate or limit ads on ad-supported networks (for a fee). The grid of options he has created has the one element that is traditional at all cable or satellite companies: It looks complicated!
But the general point--that streaming services could essentially be the building blocks for an entirely new MVPD structure-- makes perfect sense, especially for younger users. Wolk writes that this whole thing could spin into being in the next five to ten years, and maybe he’s right. There are obviously some contractual issues to settle first. But if you ask me, a simpler version could be ready sooner than that.