The more Netflix spends on TV movie content-- now approaching $15 billion -- the more platforms like Disney+ and HBO Max, need to keep boosting their non-ad platforms and/or limited ad-supported options.
And if all that happens, a greater share of ‘TV’ viewing continues to shift. Currently, there is a 25% share streaming TV usage right now, according to Nielsen -- and just 6% or so comes from ad-supported platforms or some sorts.
Will those ad platforms grow appreciably? The jury will be out for a while.
But the current popular streaming TV-video drug keeps on giving -- especially with high-profile, newsworthy streaming shows. Consumers think Netflix first -- and then everything else. That means no ads.
Brian Wieser, global president, business intelligence for GroupM, says of Netflix: “It will continue to cause their direct competitor streaming services to maintain low or nonexistent ad loads, and all of them will increasingly cause industry-wide ad-supported TV viewing to lose share of consumer time in countries around the world.”
Perhaps that’s why Disney+ isn’t moving in that direction with its own ad-supported option -- rather than leaving all that to its broad-based streaming platform Hulu. Still, HBO Max, Paramount+, Peacock, and others all have ad-supported options.
Here’s some of the alternative view at the moment: What happened this past upfront period? This is where media companies owning TV networks say there was a major shift of 20% to 30% of linear TV dollars moving to streaming platforms.
This would be significant in the world of a typical $20 billion national TV upfront advertising marketplace.
Expect this to continue as TV networks pursue a somewhat desperate relationship with marketers as their linear TV networks continues to crumble.
What really must irk TV networks is that Netflix has been able to do all of this and be profitable. But that isn’t the big deal. It is that Netflix has done this at scale, now with around 74 million U.S. subscribers and over 209 million globally.
Previously, the only thing to compare this to was HBO, as a “premium” cable no-advertising network, charging around $12 to $15 a month for top-flight originals and acquire movie programming where at best it hit 30 million subscribers.
Big ad-supported broadcast TV networks might have thought: Yes. HBO does a good job and they are profitable. But they will never have the scale of a broadcast network with around 100 million homes reach.
Call it Monday-morning quarterbacking for the TV business.
Future quarterbacking means looking for a big play with big money for programming to make a comeback.