In the wake of the upfronts, where fall schedules were rolled out with the pomp and circumstance of red carpets, it’s easy to forget just how dramatically the TV business has changed over the past few years.
Streaming was still an experiment for Netflix and Hulu several years ago, while YouTube was still best known for being the platform of video pirates.
The cable bundle seemed strong -- even if, in the words of then-Fox COO Chase Carey, it was “fraying at the edges.”
Now, some 70% of households use a streaming service, with virtual multichannel video providers (vMVPDs) among the fastest-growing options.
Meanwhile, just about every big media company, from Disney to WarnerMedia to NBCUniversal and CBS, has some direct-to-consumer offering in the market or is set to launch in the next year.
Think about it: at next year’s Disney upfront, the company will have two services with millions of subscribers (most likely): Disney+ and ESPN+. NBCUniversal will have launched or will be about to launch its offering, which will be free to cable subscribers -- gotta support the bundle while you can -- and WarnerMedia will have officially rolled out its upcoming service.
At the same time, millions more Americans will be getting their cable channels through vMVPDs like YouTube TV and Hulu with Live TV.
It is a whole new world of TV, and it has kind of sneaked up on the industry. True, most households still get their TV the old-fashioned way: through a cable or satellite company. But as more people become comfortable with streaming alternatives, with their easy sign-up and cancellation processes, the lack of rental fees, and a proliferation of compelling options, the future now not only appears to be inevitable, but closer than ever before.
Look no further than ESPN. Long the glue that held the linear TV bundle together, ESPN chief Jimmy Pitaro said at an industry conference last month that the company planned to negotiate for enhanced ESPN+ streaming rights as it renews TV agreements.
The bundle is still lucrative. But the company needs to invest in the future when that cash flow slows to a trickle.
Meanwhile, the new streaming giants of Netflix, Hulu (now owned by Disney) and YouTube plot expansions of their own, while technology leaders like Apple and Amazon salivate at their chance for a piece of the pie.
It’s all shaping up to be a pivotal year, and the big media companies that have long relied on the bundle to fuel their growth test the direct-to-consumer waters while waiting, and hoping, for the new streaming bundles to catch on with consumers and keep that legacy business model alive.