Red Seat Ventures’ Chris Balfe on the future of streaming

Across the Internet, it seems like everyone is offering their hot take on this week’s launch of Disney+. Some are delighted by Baby Yoda, while others are questioning the need to subscribe to several different services to get all the shows you want — in other words, wasn’t cable easier?

This week, we’re looking at the broader picture. What do OTT moments like this mean for the rest of us over the next few years? At LionTree’s annual Media 2.0 conference in Los Angeles, Kindred Media President Chris Peterson sat down with Chris Balfe, partner at Red Seat Ventures, a company that partners with talent or content owners to help them build their independently owned media companies. Here’s what we learned:

1. Balfe thinks the next media cycle will be one of re-aggregation.

The OTT landscape has brought drastic changes for television consumers in the last few years, including plenty of consolidation and the introduction of many new platforms for content distribution. Networks are working to keep their owned and operated content on their own platforms or develop new platforms to house that content for cord cutters. Balfe thinks that this current cycle of de-aggregating content is coming to an end.

“[J]ust because it’s easy for me to buy content from 15 different places doesn’t mean I want to,” Balfe said. “And I think that the next cycle is a re-aggregation of some of this content into a smaller number of bigger bundles, because while the word bundle has a negative connotation to a lot of people, ultimately it’s a great value…I think people are now kind of looking back on the good old days of getting 250 channels for 100 bucks a month and going, ‘Actually wait, maybe that wasn’t that bad, compared to the fact that I’m going to have Netflix and Disney+ and Hulu and CBS All Access and Fox Nation and 10 other accounts.’”

2. Data-centric platforms like Netflix are moving over to the HBO model of content creation.

It surprises Balfe how slowly “OTT mania” came to be for legacy media companies. Netflix established the field over the course of the last decade, capitalizing on the datafication of their user base in order to provide a premium viewing experience. But as companies like Time Warner, Disney, and NBC Universal are catching up with large investments, he notes that Netflix is shifting their strategy.

“It’s been interesting to see Netflix moving away from the conversation about data superiority, helping them decide what shows to make, and toward a more HBO-esque argument of, we have the best creators and we’re going to pay Shonda Rhimes $3 trillion to come over here exclusively,” Balfe said. “They’ve gone back to an arms race of, pay great creators and give them a lot of freedom. Which was the HBO model on a smaller scale. Now HBO could afford to do that with sort of four people, in the old days, and Netflix is doing it with 30 people.”

3. Free TV will continue to grow.

As some media companies are creating more new pay TV services, others are offering a convenient price point of free. Balfe spoke about the phenomenon of Pluto TV, Red Seat Ventures’ first distribution partner on a new conservative OTT network. Recently acquired by Viacom, Pluto is an ad-supported VOD service, known for its channels dedicated to specific shows. On Pluto, you can marathon everything from Supermarket Sweeps to Dog the Bounty Hunter, or watch endless hours of European train travel.

“Pluto allows you to just put something on and it mimics that old…cable guide interface that people have become so used to, to kind of scroll through the channels and then just put something on and then it just plays and you don’t have to worry about it,” Balfe said. With the ability to mimic America’s old way of viewing at no cost to the viewer, Pluto and other free TV services have plenty of room for growth.

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Listen to Chris Peterson in conversation with Red Seat Ventures partner Chris Balfe at LionTree’s Media 2.0 conference in Los Angeles embedded below, and available on Apple Podcasts, Spotify, or wherever you get your podcasts. For more great content from the conference, check out our new podcast, “Conversations From Media 2.0,” wherever you listen.