Content Is Still King

The following was previously published in an earlier edition of Online Video Insider:

As more consumers sign up for over-the-top  services, content providers are the best positioned players in the media business to capitalize on new opportunities. That’s the conclusion of a report from Fitch Ratings analyzing who stands to benefit from the current shifts in video consumption.

On-demand and streaming services are disrupting traditional media the most, causing changes in how consumers view programming. The one constant is that the demand for high-quality content is still strong, and perhaps even growing, says Fitch. "Relevance will be determined by platforms that can capture large audiences with compelling content, target them specifically, and measure their success,” the firm said in its report.

Indeed, as rapid changes buffet the media business, it’s good to be producing programming because consumer appetite for content appears voracious. Even as consumers change how they watch, they are still tuning in. That’s why more networks have launched their own SVOD services.



More homes have SVOD, too. About 82% of U.S. homes subscribed to a pay-TV service this year, down from 87% percent in 2011, according to Leichtman Research Group. On the other hand, about 52% subscribe to both a pay-TV service and an SVOD service, while 11% subscribe to a SVOD without a TV.

Meanwhile, Netflix grew in the third quarter ahead of its estimates, adding 370,000 U.S. subscribers, ahead of its predicted 300,000. Internationally, it added 3.2 million, ahead of the projected 2 million. Netflix has made a priority of international expansion, as well as content production. In Netflix’s case, it seems to be doing exactly what Fitch suggests is key to weather the shifts in consumption.

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