Interview, Other
"The Battle For Our Screens," Part 1: The Race to Entertain Us
- Pay TV subscriber losses accelerated to 2 million households in Q2 (22,000 daily), while streaming usage surged 100% year-on-year during lockdown, with households increasing their average subscriptions from three to four services (a 25% rise).
- Broadcast primetime ratings remain down 26% in Q2 and non-sports programming is stalled 15% below the prior year, indicating a sustained shift away from traditional television.
- Universal Pictures and AMC have established a 17-day theatrical exclusivity window, a significant reduction from the historical 70 to 90 days, which is expected to become the new industry standard.
- Premium video-on-demand (PVOD) is emerging as a primary monetization strategy, with studios like Disney pricing Mulan at $29.99 and Universal retaining approximately $75 million of the $100 million generated by Trolls World Tour.
- 90% of consumers who paid for PVOD during the pandemic intend to do so again, and 74% of Disney+ downloads for Hamilton occurred prior to release, suggesting strong consumer acceptance of direct-to-consumer models.
- Over three dozen streaming options now exist, ranging from free ad-supported tiers to bundles costing $85 monthly, creating a fragmented market where only Netflix and Disney are projected to achieve scale.
- Verizon recorded a 100% increase in gaming traffic in April, with $19 billion spent on mobile games in Q2 and casual gaming expected to remain up 40% year-on-year through the first half of the year.
- Twitch viewership hours increased by over 100% globally during the pandemic, with live content consumption nearly doubling from December to May, and gaming platforms increasingly hosting non-gaming events like the 12 million concurrent player Travis Scott concert.
- Approximately $90 billion annually in subscription fees and $60 billion in TV advertising spend are expected to reallocate to digital entertainment services.
- Traditional media companies face high barriers to entry due to production and distribution costs, with ViacomCBS potentially holding a competitive advantage while others struggle without Disney-level scale.
- Theme parks are expected to recover to full operation with packed lines post-pandemic, while Disney and Universal plan to increase synergy between streaming content and physical park experiences.
- Ticket sale volumes have declined 20% since 2002 and 5% in 2019, forcing the industry to rely on price increases, while studio profitability pressures are rising due to heavy streaming content investment.
- Theaters face survival risks from shortened windows and lost concession revenue unless they secure shares of streaming revenue, though the DOJ's motion to end the 1940 Paramount Consent Decree could enable future vertical integration.
- New streaming services like HBO Max and Peacock expanded to 4 million and 10 million signups respectively by Q2, with a 70% conversion rate from free trial to paid subscription.
- Film production is expected to resume with added complexity and cost due to safety protocols, while major franchise releases like Bond and Fast and Furious are delayed to 2021 or shifted to streaming.
- International expansion remains a key growth vector, with Netflix adding over 20 million net subscribers in the first half of 2020, and streaming viewership doubled from 10 billion to over 20 billion hours between late March and mid-May.