Commentary: The rise of streaming and decline of cable TV will benefit consumers most
Disney’s decision to close its TV channels across Southeast Asia could signal something good for the entertainment industry – and for us, says Dr Kym Campbell of the Wee Kim Wee School of Communications.
SINGAPORE: Disney is closing most of its 13 television channels in Southeast Asia and Hong Kong to grow its OTT (over the top) streaming platform.
To some, it confirms that cable TV was already dying. It was only a matter of when.
Disney’s streaming platform Disney+ debuted in 2019 in the US, Canada and the Netherlands where it went on trial for two months.
Two years on, the service has a near-global footprint, launching in Singapore on Feb 23, with further plans mapped out for East Asia and Eastern Europe. The stage has been set for what Disney describes as a more “streamlined television portfolio”.
With Disney+ surpassing 100 million global paid subscribers in just 16 months since its launch, there’s little doubt that this move is indicative of a rapidly changing media ecosystem.
The model used to be consumers on one side and content providers on the other, with distributors somewhere in the middle.
But things have changed. Lines between each camp are being blurred, if not completely eroded.
Content producers, as in the case of Disney+, Netflix and Viu, now stream their own services and content direct to subscribers even as traditional pay TV businesses continue to provide a package of content, cable wrapped in an Internet Protocol TV (IPTV) service.
Some of this change may have been accelerated by COVID-19. We as consumers are lapping up entertainment.
According to data analytics company DoubleVerify, global online content consumption has rapidly doubled since the pandemic, from an average of about 3 hours to 7 hours daily. It is not surprising that streaming networks all want a piece of the OTT consumer market.
FROM CABLE-TETHERED TO CABLE-CUTTING
OTT performs video streaming over publicly accessible Internet connections while IPTV delivers video and audio content through a dedicated managed network to a dedicated set top box.
Issues with OTT services concerning connectivity, long loading times and video quality have in recent years been resolved with the rapid advancement in bandwidth, fibre optic networks and the promise of 5G networks for wireless devices.
Previously cable-tethered consumers have transformed into cable-cutting ones, as content shifted towards becoming mobile and on-demand.
Pay television networks, such as HBO, have launched their own OTT platforms (in this case, HBO Go), to be more relevant to customers without cable subscriptions.
This trend can be observed in Singapore too. According to a recent survey by NTU’s think tank, the Centre for Information Integrity and the Internet (IN-cube), 39.2 per cent of respondents have paid subscriptions to cable TV (like Mio TV and Starhub) while 44.5 per cent of respondents have video streaming services (like Netflix, Viu).
More significant is the average number of consumption hours in a day, with cable TV watchers averaging about 2 hours and 45 minutes in contrast to about 3 hours and 20 minutes for those using video streaming sites.
This move to OTT video streaming services may be partly attributed to the rise of consumers watching movies and other content such as sports (for example, DAZN, F1TV) on their smart devices.
But it’s also a story of cheaper subscriptions, the wider variety of programmes, minimal installation, and of course, the benefit of watching when, where and how one likes, that account for the rise of OTT services.
Another reason is the health threat now facing the world. Media research firm The Trade Desk noted that in 2020, the pandemic accelerated adoption of OTT content across Southeast Asia, as more consumers stayed at home.
“Seventy-three per cent of respondents plan to maintain or increase OTT consumption after the pandemic ends,” it reported.
It is not surprising then for Disney to slough off its TV channels to grow its streaming services.
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CONSUMERS THE ULTIMATE WINNER
As media businesses respond to what consumers want, we are witnessing the tug of war between a more traditional model of media distribution based on linear programming, and a direct-to-consumer model of online video-on-demand services.
We are also entering into an age of consolidation, as Amazon is now considering buying MGM.
Meanwhile US telecommunication heavyweight AT&T looks likely to merge its WarnerMedia assets, which include HBO and CNN, with Discovery Inc. The deal, if approved, will make the new entity the largest content provider in the world to take on Netflix, Amazon, Apple and Disney.
Tim Hanlon, CEO of The VertereGroup, sees this consolidation as a “legitimate possibility for these two streaming services (WarnerMedia and Discovery) to rise up into the top must have tier”.
But the winner of this competition is us – the consumer.
Such competition is good because it affords us options, from better pricing to global content, convenience and variety.
In fact, Bob Chapek, Chief Executive Officer of The Walt Disney Company said in March: “The enormous success of Disney+ – which has now surpassed 100 million subscribers – has inspired us to be even more ambitious, and to significantly increase our investment in the development of high-quality content.”
Meanwhile with 71 films planned for release in 2021, Netflix is focused on “creating content from anywhere in the world and playing it all over the world”, according to co-CEO Ted Sarandos.
With more than 80 Korean films and shows under their belt, they seem to be doing just that.
So, as media businesses now target the international subscriber, it does leave consumers with a wider choice of content. OTT offers the convenience of using multiple smart devices, alongside a multitude of local and international programmes that can be customised to suit one's needs.
The only foreseeable downside is the sheer availability of choice might lead to confusion, when there are too many avenues for content.
But there’s no stopping the OTT train. Mr Amit Malhotra, regional lead of emerging markets at The Walt Disney Company Asia-Pacific, said in a press release, "Streaming services have become an integral part of the daily lives for many consumers in Singapore.”
Netflix Chief Financial Officer Spencer echoed this sentiment: “The rise of streaming to replace linear TV around the world is the clear trend in entertainment.”
Meanwhile, traditional pay-tv telco platforms have had to evolve by bundling OTT media services into their subscription package, even including broadband and mobile in an attempt to hold on to subscribers.
But it is not only the telcos who are transforming. Even Singapore media broadcasting giant MediaCorp wants a piece of the streaming action through their own OTT offering, meWatch.
Pay TV is destined to evolve. Disney’s move only signals something good for the whole entertainment industry and for us – a timely switch in channels.
Dr Kym Campbell is a senior lecturer at the Wee Kim Wee School of Communication and Information, Nanyang Technological University. He is a media expert and a member of the Centre for Information Integrity and the Internet (IN-cube).