By Brad Rees, CEO, Mediacells
Media groups are set to spend more than $140bn on added content in 2022 despite overwhelming, eye-watering losses across the top eight US media groups, according to investment banks, analysts and number-crunchers at the Financial Times.
The numbers surely downgrade the sports streaming giant DAZN’s recent announcement of $1.3bn losses from ‘eye-watering’ to more of a nervous monocle-quiver.
Even its billionaire backer Len Blavatnik’s $4.3 billion cash injection aimed at fuelling expansion into recreational betting, gaming and non-fungible tokens (NFTs) is more mindful, less boggling.
According to the FT forecasts Netflix will spend more than $17bn on content this year and the leading streaming service is claiming it will break even and become free cashflow positive in 2022.
Disney is set to spend $23bn on entertainment and an extra $10bn on sports rights, such is the feverish, bellicose heat of the 2022 streaming media thermometer.
So what does it all mean to the consumer – will the audience experience become more seamless, or will our paid-for media offerings further fragment our consumption habits?
In user experience circles there is a negative user indicator known as the T-Factor. It is elicited at the frequent moments when a smart TV watcher reverses out of Netflix to log back into iPlayer or All 4 or Prime or Now TV or Disney+ or HBO Max or DAZN and then tuts impatiently, eyes darting between remote and screen.
It is hard to believe that there is not a magic button, voice command, iPhone gesture, neural VR prompt that, when activated, sails each of us off to a well-stocked media lake where all video streams cascade into.
The Big Eight media companies are assaulting customers every time they wage war, either by joining forces with strategic partners or just throwing so much money, Disney+ content spend in 2022 has increased 65% in two years.
The pragmatic, perhaps utopian consumer outcome is for media monoliths not to be enemies with other platform owners and instead work together for the consumer delight they should aim to provide.
The sports rights buyer thinks of their quarry as ice lollies without a freezer nearby as soon as you get a hold of them, they are starting to melt. Quickly.
To make exorbitant rights acquisitions work the temporary owner needs to expose them to the maximum addressable audience, at speed and scale, who are willing to pay for the experience.
The DAZN-BT Sport acquisition fell through earlier this month and BT are now looking to partner with the Discovery Channel as well as recently revealing a new channel supply deal with Sky that will stretch beyond 2030.
Although the BT – Sky agreement could be seen as easing competitive tension around sports rights it’s worth looking at in the context of how fierce they both battled for similar live sports rights, before striking a channel sharing deal back in 2017 that allowed both customer bases to gain access to each company’s live sport rights through different pay TV packages.
According to technology culture mag Wired the converged omnichannel future is cheap. For the last four years Roku, the cheap 4K streaming stick, is easy to navigate to all major streaming services and incrementally reduces the dreaded T-Factor.
The Plus version even has a new, hands-free remote and a slider on the side of the remote that enables you to talk, to your remote from anywhere in the room without lifting a finger, so the marketing blurb reads.
There is still a big T-Factor at large. Users still have to say something like “Hey Roku, play Succession on HBO Max” which means they need to know where to find the content in the first place. Although big tech advancements are flooding into our living rooms they are not yet married up with the content from the consumer’s perspective.
Sustained cash injections into media offerings look set to continue until at least 2024, according to investment bank Morgan Stanley but investors are terrified that the prize may not be worth it.
The evolution of music streaming has some strong indicators of the direction of travel for TV-style content. The model has moved away from litigiousness to consolidation – you can stream music over Spotify for free and it’s mostly the same music that you can stream for free on any other music platform, but the quid pro quo is advertising.
With the inevitable advent of Web 3.0 and the metaverse the potential for wringing value out of consumers will jet far beyond watching ads or receiving limited media platform access. With non-fungible tokens (NFTs) users who choose to meaningfully interact with ads or sponsors can be rewarded with a ‘watch-to-earn’ model through digital reward tokens which can be stockpiled to exchange for products and services or simply to skip adverts for a certain amount of time.
But as long as content folks don’t understand tech and tech guys don’t ‘get’ content and neither seem to really care what the customer experience looks like; things will only incrementally change in the 2022 – 2024 Streaming Wars.
In Season 3 of Succession, King Logan pours scorn on Prince Kendall’s social media tech-content platform play (with the bloke out of True Blood) which promises the legendary media lake.
“My son stands up, waves his d*ck in the air, and the rest of the world is meant to rearrange itself according to his liking. I don’t think so.”