BY CHRIS MORRIS
If the only constant is change, then there is no more consistent business of late than the distribution of entertainment content.
What, just a decade ago, was a fairly established system has witnessed a staggering amount of innovation and upheaval in recent years. The cable, satellite and broadcast fields have seen a seemingly endless number of new competitors—from subscription streaming services to over-the-top service providers.
Make no mistake: legacy distributors—broadcast cable, telecom and satellite companies—still provide the lion's share when it comes to in-home televised entertainment.
But as upstart competitors surge, that position could be threatened.
Before we dive deeper into the rapidly evolving landscape, let's start with the basics—a current snapshot of the many different ways the content DGA members create is distributed today.
Free Over-the-Air/ Antenna
Broadcast Channels:
MAJOR PLAYERS:
ABC, NBC, CBS, Fox, CW
REACH:
119.6 million homes
PRICE:
Free
ADVANTAGES:
Programming is free to watch, and the HD picture quality can be better than cable.
LOOMING IMPROVEMENTS:
A new tech standard, called ATSC 3.0, will soon let broadcasters send 4K signals over the air.
HURDLES:
Reception quality varies by geography. And today's TVs may not be compatible with ATSC 3.0 broadcasts (though the rollout will be prolonged, and there's no immediate fear of obsolescence).
MVPD (Multichannel Video Programming Distributors)
Cable/
Telecom:
MAJOR PLAYERS:
Comcast, Charter, Spectrum Cable, AT&T
REACH:
62.7 million subscribers
PRICE:
Varies by selected package. Can range from $30 per month to over $150, depending on the number of channels and premium options.
ADVANTAGES:
Cable is reliable, offers a dependable selection of hundreds of popular Basic Cable channels, Premium Pay Cable channels and Broadcast Networks. All of which can easily be bundled with phone and internet, often at a discounted price. Authenticated viewing allows subscribers remote access to programming anywhere there is an internet connection.
LOOMING IMPROVEMENTS:
To fight subscription losses, cable companies are continuing to explore different bundling options, which strip lesser-watched channels and lower the package price.
HURDLES:
Perceived high cable prices. Subscription streaming services are offering new original programming in addition to legacy programming options which are drawing viewers away.
Satellite:
MAJOR PLAYERS:
DirecTV, Dish Network
REACH:
32.1 million subscribers
PRICE:
Like cable, varies by package and extras, but prices typically range from $50 to $150 per month.
ADVANTAGES:
Satellite companies also include a variety of Premium Pay, Basic Cable and Broadcast Network offerings. With merger and consolidation increasing opportunities to bundle services at a discount. Authenticated viewing allows subscribers remote access to programming anywhere there is an internet connection.
HURDLES:
Subscriber numbers are declining. In addition, severe weather can interfere with reception and most satellite companies lack sufficiently fast internet options to offer competitive bundles in urban areas.
SVOD (Subscription Video On Demand)
SVOD Platforms:
MAJOR PLAYERS:
Netflix, Hulu, Amazon
REACH:
More than 80 million combined domestic (based on Netflix and estimated Hulu and Amazon subscriber numbers)
PRICE:
Typically $8-$10 per month
ADVANTAGES:
Viewers can watch on demand and binge-watch programs they like. Programming can also be viewed anywhere there's an internet connection—including television sets, mobile devices and computers. Programming can also be downloaded for offline viewing.
LOOMING IMPROVEMENTS:
More original content is being developed for all three platforms and in the case of Amazon, live sports.
HURDLES:
Subscription prices may increase, which could affect subscriber numbers. Majority of viewing is licensed content, not originals and as competitors launch their own single-channel streaming services, deals for licensing additional programming may become scarcer or more expensive.
SVOD Single-Channel Services:
MAJOR PLAYERS:
HBO Now, Showtime, CBS All Access, Starz
REACH:
More than 8.4 million (major players)
PRICE:
Typically ranges from $6 to $15 per month
ADVANTAGES:
Consumers can watch premium content without a cable/satellite subscription for a lower monthly cost. Programming can be viewed anywhere with an internet connection, making it more appealing to millennials. Increasing options to download content for offline viewing.
LOOMING IMPROVEMENTS:
Shows that were originally blacked out on some of the single-channel streaming options, such as live sports, have become more readily available, possibly opening the door for additional viewing options. And some providers, like CBS, are creating original content that airs only on their proprietary streaming service.
HURDLES:
Attracting viewers for what can be perceived as relatively limited content libraries. Services that offer a wide variety of programming (i.e., the major subscription streaming services) or overwhelmingly popular programs (Disney's forthcoming venture) could have an advantage.
Transactional Video on Demand
Download To Rent (DTR)/ Electronic Sell Through (EST):
MAJOR PLAYERS:
iTunes, Vudu, Google, Amazon
REACH:
Broadband Households
PRICE:
$1 to $20 per episode or title.
ADVANTAGES:
Allows viewers to sample/purchase individual episodes or series without any further commitment to a channel or service.
LOOMING IMPROVEMENTS:
Vendors are regularly adding new content partners to better compete with larger subscription streaming services.
HURDLES:
Can be more expensive to buy or rent individual series than subscribe to a service.
vMVPD (Virtual Multichannel Video Programming Distributors)
Over-the-Top Channel Bundles:
MAJOR PLAYERS:
Sling TV, PlayStation Vue, YouTube TV, Hulu w/Live TV, DirecTV Now
REACH:
More than 3.5 million subscribers
PRICE:
$20 and up
ADVANTAGES:
Lower monthly bills, with several tiers allowing consumers to receive smaller channel bundles they may prefer to hundreds of cable channels they don't watch.
LOOMING IMPROVEMENTS:
Each of the growing number of services is adding new features and channel combinations as they mature.
HURDLES:
Offerings are limited and packages often need to be supplemented with other separate streaming options, which increases costs to the consumer. Depending on which service is selected, viewers will likely miss out on one or more of the channels they watch at least occasionally. For example, DirecTV Now and Sling TV lack CBS, while Vue has lost access to Viacom channels (Comedy Central, MTV, etc.). And YouTube TV is available only in limited markets.