Movie Rentals Are Done, Netflix Won
Research shows that there will be up to 383 million SVOD subscriptions by 2021, up from 163 million by the end of 2015.
Meanwhile, most of the cable and satellite TV industry has been tripping over their feet on the sidelines, while OTT has been kickin’ ass and takin’ names- except for HBO GO, seems like they got it together just in time…
I grew up looking forward to the experience of going to the movie theater with my family and friends. The over-sized popcorn tubs, cheap nachos and soft pretzels were always par-for-the-course. But, as time went on, I think we, as a society, either got too lazy to do the whole movie theater thing or we just would’ve rather stayed home and waited for the latest movies to come out on rental.
During those slow years ( I’m guessing the late 90’s) a shift started to happen in the OTT world- OTT started to entice people by giving them access to video content they secretly wanted, but didn’t know it yet. For me, it began as just having instant access to classic 80’s movies. With time, I realized that for a nominal monthly fee, I could get access to a huge library of movies and didn’t even really think about the idea of renting a movie.
After a while, I started to care less about renting movies and my behavior changed. I noticed I got more patient to wait for movies to come out on OTT services and then I could binge on them.
The more I looked around, this behavior had broadened and become more mature with time. Now, it’s pretty common for OTT services to make their own shows and they’ve become pretty damn good at it too- for example; Casual, Orange Is The New Black and Stranger Things.
I’ve always really loved watching new products and companies carve out white space for themselves.
Subscription services are really starting to bring in the bacon now too.
Projections are calling that OTT video revenue will surpass $30 billion by 2020, up from $19.45 billion in 2016, with steady double digital growth.
This increase is mainly driven by SVOD and advertising.
Consumer behavior and technology is a dance and if companies don’t really invest in finding ways to adapt in today’s disruptive market- they will die.
Take Apple TV, started out as a well thought out product, great interface and it’s easy to use. However, they’ve built most of the product around the idea of buying individual shows or movies to watch. But, they missed the trend of subscription and now they’re in a down-turn.
“Using an Apple TV is actually worse than using cable used to be, and I thought the whole goal was to make it better. Really it’s become just a Netflix portal. Apple absolutely needs to find direction with Apple TV and some sort of purpose.”
In our age of disruption, it’s not just good business to watch market trends and consumer behaviors- it’s mandatory. Otherwise, distant marketplace threats or innovative products, will eat your lunch and send you packing.
It’s really refreshing to see some of the big ‘studio’ houses starting to adjust their model and change how they do business now. In my opinion, STX Entertainment is leading the charge on that front. They’ve got some really excellent leadership in place and they’re keeping their ears to the ground for trends to capture. I might not be into all of their movies and content, but they sure are changing how the ‘biz’ is doing business in 2017.
There’s a long list of must do’s to lead successful companies and steer strong brands these days. But, let’s not forget, who’s paying our bills and keeping our companies moving- our customers.
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This was originally written on LinkedIn.