Wolk’s Week In Review: Disney doubles down on streaming, Stats show streaming still strong

TV[R]EV Week In Review

Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.

Wolk's Week In Review

1. Disney doubles down on streaming

Disney rearranged its internal deck chairs this week to put more emphasis on streaming and less emphasis on theatrical releases and theme parks.

Why it matters

This is less a reaction to the pandemic and more of a proactive response to consumers and their rapidly changing preferences.

Movies were hurting long before Covid. In much the same way as Uber disrupted the taxi industry because consumers were fed up with dirty cabs, usurious pricing and lack of anything vaguely resembling customer service, here too consumers were fed up with dirty theaters, usurious pricing at the concession stands, noisy patrons and a feeling that the industry just did not care about them one whit. 

Add in the drastic drop in pricing for smart TVs and the corresponding increase in picture quality to 4K, and you had a perfect storm long before Covid made a movie theater just about the last place anyone would want to be. 

Which is why the AMC theater chain is now facing bankruptcy, with others not too far behind.

By focusing on streaming, Disney is also preparing itself for the day, sometime in the not too distant future (say five years or so) where it is no longer viable for networks to maintain two separate slates of programming--one for broadcast/cable and one for streaming--at which point broadcast and traditional pay TV in general--just becomes another distribution outlet for the company’s streaming services.

As for the theme parks, they will come back. But the characters and stories that inspire both the patrons and the Imagineers will come from Disney’s streaming properties, not from its theatrical releases.

What you need to do about it

If you’re one of the other big network groups, follow Disney’s lead. The future is streaming and it’s where you should be investing your money, time and effort. 

If you still have heart for movie theaters, then think about how to not just improve, but reinvent the experience so that it is consumer friendly and plays to the strengths of seeing a movie on a giant screen in a room with dozens of other people. Cinepolis, the luxury movie chain, is on to something, but I suspect there is much more that could be done to reimagine the experience.

If you’re a consumer, well, one less reason to change out of your sweats and get off the couch. And since movie theaters are not going away, you’ll have one more decision to make--watch in or watch out.

2. Stats show streaming still strong

There was a lot of noise about how much streaming viewership increased during the early months of the pandemic, and I am happy to report that  the trend is as strong as ever.

New stats from VIZIO’s Inscape show that AVOD streaming is up 174%, and home screen usage for VIZIOs SmartCast  is up 93% over the seven month period since the pandemic began.

Similarly, Comcast’s Freewheel is reporting that streaming ad views were up 42% during the first half of 2020, but that mobile’s share of viewership dropped 15%.

Why it matters

There was a brief moment where some observers were suggesting that the surge of CTV during March and April was an anomaly, that once things returned to normal, viewership would drop.

Only things did not exactly return to normal and viewership rose rather than fell.

This is because (and forgive me for repeating myself here) more and more viewers are discovering that streaming now offers more and better content than traditional TV, all for less money.

Or, to paraphrase an old expression, once they’ve seen Netflix, it’s hard to keep them down on the set top box.

It’s also important to note that streaming’s gains are being made at a time when there are a lot of reasons to watch traditional linear TV: all four major sports leagues are up and running in some way, shape or form, plus the election and debates are going on too--to wit, Inscape data shows that nearly 60% of active TVs tuned in to the first presidential debate alone.

But mostly it matters because we’re getting close to the top of the roller coaster ride, the one that is going to end with the industry shifting to a primarily streaming model, with Flixes and FASTs and niche players all living happily in a world where millions of hours of programming are available at any time and where advertising can be targeted to specific audiences the same way it is online.

So hold on and remember to throw your arms up in the air on the way down.

What you need to do about it

If you’re a network, you need to continue doing whatevey you’ve been doing to prepare to move your entire business model to streaming. And by that I mean all parts of it—news, sports and entertainment.

If you’re the advertising industry, you need to realize that this is no longer just a read-through with everyone still holding on to their scripts. We’re doing a dress rehearsal right now and the show opens in a few weeks. Meaning you need to get your act together in terms of measurement, identity, targeting and pricing and that’s going to mean a lot more cooperation and pulling in the same direction than is currently being done.

If you’re a consumer, this is really good news, as the new TV ecosystem is going to be much better than the old one. 

And if you’re invested in mobile video, remember that things will pick up again post-pandemic, but that 65-inch flat screens at $499 are a tough thing to compete against when viewers are at home.