Disney enters the 'streaming wars'
The so-called 'streaming wars' became a little more combative last week, with the arrival of Disney+ in New Zealand. This adds yet another entertainment service to an increasingly crowded market.
We can now subscribe to Disney+, Netflix, Lightbox, Neon, TVNZ OnDemand and Apple TV+, although this list is not exhaustive. To get a full and complete rundown of what is available and at what price, check out the NZ Herald article here.
There are no small children living in my house and I am not a Star Wars fan (Disney owns Lucas Films), but I downloaded Disney+ to see what the experience is like. Seamless. Within minutes I had access to Mickey Mouse's back catalogue. The technical expertise to deliver that kind of service to millions of households all at once should not, I think, be underestimated.
In the US, where Disney+ launched last week, 10 million people subscribed in 24 hours. Now there is a healthy business model. There were a few technical glitches, and the Washington Post has reported the ZDNet scoop that thousands may have had their accounts hacked.
The advent of Disney+ is more bad news for SkyTV, who will have to replace its Disney content. Obviously, this is not as dire as losing premium sports, but it will chip away at its business model. The company may also lose HBO (the makers of high-quality drama such as the Sopranos - which arguably kicked off the whole 'Golden era of TV drama').
With all these different content offerings available, how many services will consumers subscribe to? In the LA Times, the head of Disney+ says four to six, while many market analysts are picking two or three. My money is with the analysts. I'm picking average household will go for Netflix for the quantity of content, Disney for the kids, and maybe pick one more service, which would bring household spend on entertainment programming to around $30 to $50 a month.
Then there is sport - which is a separate, albeit related, beast. You are either a sports fan or you are not and if you are the former you are prepared to pay more and put up with less interesting tech (satellite dishes on your roof!). So, I would suggest that households with sports fans will find an additional $50 a month in the household budget for a separate sports package.
Which adds up to a combined spend of about $80 - $100 a month per household. Five years ago SkyTV was getting all this discretionary spend, now it has to share it with raft of streaming services. How it must yearn for the time when broadband infrastructure was too poor to deliver a consistent streaming experience. This was when SkyTV's bundle of content ruled and consumers could never get just sport on its own, they had to take lifestyle and entertainment too.
Now we are in an unbundled world and SkyTV is under attack on both fronts - entertainment and sport.
But what about free to air TV? What is its future?
Outside of sport, none the aforementioned services are interested in New Zealand content such as news, current affairs, local reality TV shows, dramas and documentaries. Five years ago, there were enough of us watching the channels to make advertising a viable business model, now those days appear to be over. Mediaworks has put TV3 up for sale, TVNZ has been relieved of its obligation to deliver a dividend.
Which might be OK, if it weren't for the idea that locally produced programming is key to consolidating and celebrating a nation's culture and it is essential in a modern democracy. Broadcasting Minister Kris Faafoi has a big decision coming up. Will he bail out Mediaworks? Will he merge TVNZ with Radio NZ? Will he boost NZ on Air? Will he do nothing?
As they used to say in TV-land, stay tuned.
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