Report: AT&T, Comcast, Disney will struggle with streaming

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Rethink TV, the TV research arm of Rethink Technology Research, has released a forecast of the video revenues for four of the world’s largest pay-TV and studio groupings, and finds that the only one that will have rock steady, uninterrupted growth is Netflix.

The other three, including AT&T which has just spent $85 billion buying Time Warner; Disney which has acquired 21st Century Fox for $71 billion (€62.9bn), and Comcast which has owned NBC-Universal for a while now and which has just acquired Sky for $39 billion in Europe – will all experience reversals as service cannibalisation affects their ability to build of streaming revenues .

The report predicts that AT&T will struggle to accelerate its belief in addressable advertising, while Comcast will do well outside of the US in both advertising and pay-TV, but come last in the race for SVoD subscribers. Disney, which holds wild cards in ESPN+ and a massive movie catalogue starts from a leading position, but will struggle to make inroads into SVoD globally, despite inheriting some key leading positions in places like India.

Come 2024 Netflix will remain the dominant force in streaming, earning more streaming revenue than the big three put together and it will have a growing influence on what is watched around the world. It’s market share will dilute from 63 per cent last year to 52 per cent by 2024, but our forecasts show that Netflix cannot be shifted from the number one spot.

The extraordinary success of Netflix has definitively affected the strategy of the big US Hollywood studios and forced their arms. The question investors have been asking is how can Netflix stand up to that assault on multiple fronts. The question they should be asking is how can the other three, and other companies like Apple and Facebook, keep enough of their existing content revenues to remain relevant.

The conclusion is that while many will survive to live on, few can thrive overnight and both AT&T and Comcast will continue to be reliant on their cellular and broadband revenues for all growth until beyond the forecast period.

The largest imponderable is AVoD, and whether or not this will take off in mature video markets like the US. It does well in India and China. We forecast partial success here only, and the Netflix strategy of not giving in to AVoD establishes the global norm. However sports streaming services will drive astonishing advertising revenues, pillaging this revenue from broadcasting markets.

But despite huge content reserves the big three will struggle to become significant streaming forces, with Disney likely to reach just 96.5 million subscribers at the end of this forecast, barely 12.5 per cent of the global total, by then.

Meanwhile across legacy pay-TV, AT&T revenues will decline by $16 billion by 2024, and Comcast’s will fall $5.8 billion. Even Disney which has no pay-TV offerings will lose $2.5 billion in channel licensing over this period and more through shrinkage in the global box office.


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