News and Insights
Streaming – splinter then consolidate?
March 15, 2019
If you have a Spotify or Netflix subscription, you’re likely streaming music and video on a daily basis. The very idea of accessing content via physical media seems not only archaic but also impractical, as many of us now no longer have the hardware to actually play them. The companies which drove this revolution – Netflix, Spotify, Apple and Amazon – have reshaped both how we consume media and our expectations of it. They also made a tidy profit in the process.
This has not been lost on companies late to the subscription model party, and we’re now seeing many trying to carve out their own niche. The BBC and ITV recently announced that BritBox, a streaming service already offered in North America, will begin service in Britain by the end of this year, featuring shows from both companies. Both Disney and WarnerMedia are planning to remove properties from Netflix as they prepare to launch their own competing services, weakening Netflix’s offering in the process. There’s a streaming service gold rush, and everyone’s got a pickaxe in hand.
A step too far?
There is, however, a wrinkle in these developments. With so much of the music/TV streaming appeal being convenience (and perceived value for money), will pushing the consumer into having multiple subscriptions with multiple logins be a step too far? After all, there are plenty of unscrupulous methods of obtaining content online. Game of Thrones was the most torrented show six years running, only recently knocked off the top spot by The Walking Dead. Draining Netflix’s content pool won’t necessarily translate into greater value for intellectual property owners.
There’s another variable to consider – video games. In the UK, the video games sector now accounts for more than half of the entire entertainment market, according to Entertainment Retailers Association (ERA) figures.
Gaming prepares to enter the streaming market
There’s a revolution currently taking place in the video games sector. Many big players are moving towards subscription models. Microsoft’s Xbox Game Pass allows access to first and third party games for a monthly fee. Ditto EA for its EA Access scheme. Whilst both these services still require full game downloads, they’re a sign that the games sector is moving to a subscription model.
Alongside this, there have been some encouraging developments in effective video game streaming. This essentially means graphics processing would take place in the Cloud rather than locally, effectively ending the need for a console or PC.
Microsoft’s Phil Spencer and Ubisoft’s Yves Guillemot were trumpeting the potential for game streaming at E3 last summer, and the latter recently partnered with Google to test the potential for streaming Assassin’s Creed Odyssey – a big title from last year. Reports on the game’s performance have been favourable. Microsoft is planning its own xCloud game streaming service, with public trials scheduled for later this year.
If the technology for game streaming develops sufficiently to reduce input lag, the only constrictive factor would be the end users’ broadband connection speed, and if the hype around 5G proves to be true, eventually that would not even be a factor.
All of which raises a whole host of questions. Will consumers want subscriptions with multiple companies for various media? With games completing the holy trinity for streaming digital entertainment, will a splintering of the landscape and the install base actually be a wise move? Will platforms with weaker content offerings even survive?
Are we, in fact, gradually moving to a world where a few large players stream all of our media, with tiered subscriptions based on our tastes? If so, you’d need a pretty robust cloud infrastructure, and that puts Google, Amazon and Microsoft right in the frame.