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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.
Earlier this week the FandangoNow and Vudu movie and TV VOD (“TVOD”) rental sites merged. Colin notes that the move didn’t register on many industry executives’ radar (certainly nowhere near the biggest deal of the week, Blackstone’s acquisition of a majority of Hello Sunshine for $900 million). The tiny ripple FandangoNow-Vudu caused isn’t surprising given the sub 5% market share the two sites jointly have.
The far bigger story here, which we explore on this week’s podcast, is the tremendous shift in consumer preferences from buying and/or renting movies/TV shows via TVOD sites, to renting access through SVOD services. Indeed, Colin cites data that the market for buying/renting has collapsed by 50% over the past 6 years. Meantime SVOD has skyrocketed. Simply put, SVOD has crushed TVOD.
Note this shift isn’t just confined to video. The late Steve Jobs long insisted that consumers wanted to own, not rent, their music, going so far as to say in his famous 2003 Rolling Stone interview “I think you could make available the Second Coming in a subscription model, and it might not be successful.” Sorry Steve….in its Q2 earnings report, Spotify alone said it had 365 million monthly active users at the end of Q2, with 165 million of them paying a monthly subscription fee. Apple Music likely has MORE subscribers than that, and the services business is Apple’s most important growth segment. Then there’s YouTube, Amazon and many others.
Sometimes even the greats get things terribly wrong.
Be that as it may, Colin and I explore what all of this means to the future of the purchase/rental model and SVOD. Lurking in the wings as another disruptor is AVOD. As Colin notes, Q2 advertising at Tubi, Pluto and Roku was once again off the charts. As the Hello Sunshine team would surely attest, consumer preferences in video are far from settled.
Listen to the podcast (24 minutes, 23 seconds)