2021's Subscription TV Challenge

It was an unlucky content producer who found themselves without their own Internet-based distribution channel in 2020. Whereas content channels might have initially been seen as a way to improve revenue on strong back catalogues for companies like HBO they are now serving as a way to premiere content in the absence of cinema releases.

Disney has put Mulan and Artemis Fowl onto Disney+ and MGM recently had to deny that it was in talks to find an existing Over The Top (OTT) provider to release the latest Bond film. Wonder Woman 1984 will be released via HBOMax.

The executives who advocated for setting up channels rather than doing deals with the existing providers must be celebrating right now. Developing a direct to consumer market just ahead of a pandemic that has created huge demand for entertainment at home looks like a wise choice and one that reflects a successful bet on where the industry is going rather than where it has been.

As 2020 ends though, new challenges are going to emerge as the distribution and content production landscape continues to change and evolve rapidly with changing lifestyles, economic pressures and the public health situation.

It’s tempting to see Quibi’s collapse as a richly deserved hubristic flameout but if an extremely well-funded digital content commissioner and distributor with experienced leaders and a slate of highly recognised talent can fail there are lessons for everyone.

Audiences that are paying monthly are going to have very different views and relationship to content. Each month they are going to be asking the question “why should I carry on paying for this service?” and an essential part of the answer is going to be around unique content. Subscriptions mean you have taken your profit immediately rather than trying to accumulate it over time through syndication.

Netflix’s new “rule of three seasons” seems to be based on trying to supply that need for new, unique content. However by applying it retrospectively they risk alienating subscribers who feel that it isn’t worth investing in a new show if the stories are going to finish halfway through with no satisfying conclusion.

Disney, apart from its back catalogue, can only answer the resubscription question with the Mandalorian so far. It needs a broader slate with content being delivered at the same monthly rate as the subscription bill.

The digital delivery success story risks souring next year without some inspired commissioning. With an audience that is no longer literally captive, content will be key to retain customers and avoid a crippling exodus of subscribers that leads another channel down the same path that Quibi has already trod.

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