Category Archives: Television

Subscription Model Redux: Loadsa Money for Uncertain Returns

Last week I wrote about subscription fatigue particularly as it applies to video. Ampere Analysis (I don’t yet have a link to the press release) have just released some data that looks at another angle of this.

Global spend on TV, film and sports content “expanded from $100 billion to $165 bln between 2008 and 2018 – a 65% increase. Nearly $50 billion of this growth was in the last five years alone.” But what’s interesting about this is that while Netflix and others have sunk a significant chunk into this — from $2 bln to $19 bln last year, the vast majority of spending is still done by the traditional networks and broadcasters, accounting for $111 billion in 2018. “It is their reaction to the entrance of the new OTT players,” Ampere concludes, “which has fuelled the global content boom.

This means that these broadcasters are having to dig deep to fend off these new players: in 2013, a typical broadcaster or network spent roughly 41% of its revenue on content rights. Ampere expects that by the end of 2019, this will have increased to 50%. Disney’s spending rose from $10 bln in 2013 to $13 bln in 2018. NBCUniversal’s content expenditure has risen by over $4 bln between 2013 and 2018.

Ampere sees this as a rising tide lifting all boats. As networks shift to what its calls a Direct to Consumer model (and I would call a subscription model) OTT platforms like Netflix will have to spend more on original content, as I mentioned in my blog. But Ampere argues it also represents an opportunity for producers and rights holders (read indie producers) that don’t have any interest in building their own subscription services to replace the content the likes of Disney withhold from Netflix.

I’m not so sure. For one thing the likes of Disney are going to face shrinking margins as they funnel more money into content, and a subscription model isn’t going to bridge the gap, at least for now. And are Netflix users going to be drawn to more indie content on Netflix, and are they going to be willing to pay the same fees as they did for the Hollywood stuff? The good thing, generally speaking, about Netflix-commissioned stuff is that the viewer feels a certain bar has been reached — not always true, but you’re willing to give it a few minutes based on the Netflix logo. Wading through lots of indie content looking for gems might not be quite the experience existing users are looking for.

Which brings me to another problem with video subscription services. It’s not like music, where if you’re a U2 fan you might be up for listening to something the algorithm reckons is similar. But you can only watch so many murder-set-in-rustbelt-town documentaries. The contradiction is simple: Quantity does not equal quality. But quantity is what brings the punter back to the service. Netflix and other streaming services are going to find it hard to maintain their position if their app starts slipping down the list of priorities the user reaches for when they want to watch something. Pretty soon they’re hitting the unsubscribe button.

Afghanistan’s TV Phone Users Offer a Lesson

By Jeremy Wagstaff

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There’s something I notice amid all the dust, drudgery and danger of Kabul life: the cellphone TVs.

No guard booth—and there are lots of them—is complete without a little cellphone sitting on its side, pumping out some surprisingly clear picture of a TV show.

This evening at one hostelry the guard, AK-47 absent-mindedly askew on the bench, had plugged his into a TV. I don’t know why. Maybe the phone gave better reception.

All I know is that guys who a couple of years ago had no means of communication now have a computer in their hand. Not only that, it’s a television, itself a desirable device. (There are 740 TVs per 1,000 people in the U.S. In Afghanistan there are 3.)

But it doesn’t stop there. I’ve long harped on about how cellphones are the developing world population’s first computer and first Internet device. Indeed, the poorer the country, the more revolutionary the cellphone is. But in places like Afghanistan you see how crucial the cellphone is as well.

Electricity is unreliable. There’s no Internet except in a few cafes, hotels and offices willing to pay thousands of dollars a month. But you can get a sort of 3G service over your phone. The phone is an invisible umbilical cord in a world where nothing seems to be tied down.

Folk like Jan Chipchase, a former researcher at Nokia, are researching how mobile banking is beginning to take hold in Afghanistan. I topped up my cellphone in Kabul via PayPal and a service based in Massachusetts. This in a place where you don’t bat an eyelid to see a donkey in a side street next to a shiny SUV, and a guy in a smart suit brushing shoulders with a crumpled old man riding a bike selling a rainbow of balloons.

Of course this set me thinking. For one thing, this place is totally unwired. There are no drains, no power infrastructure, no fiber optic cables. The cellphone is perfectly suited to this environment that flirts with chaos.

But there’s something else. The cellphone is a computer, and it’s on the cusp of being so much more than what it is. Our phones contain all the necessary tools to turn them into ways to measure our health—the iStethoscope, for example, which enables doctors to check their patients’ heartbeats, or the iStroke, an iPhone application developed in Singapore to give brain surgeons a portable atlas of the inside of someone’s skull.

But it’s obvious it doesn’t have to stop there. iPhone users are wont to say “There’s an app for that” and this will soon be the refrain, not of nerdy narcissists, but of real people with real problems.

When we can use our cellphone to monitor air pollution levels, test water before we drink it, point it at food to see whether it’s gone bad or contains meat, or use them as metal detectors or passports or as wallets or air purifiers, then I’ll feel like we’re beginning to exploit their potential.

In short, the cellphone will become, has become, a sort of Swiss Army penknife for our lives. In Afghanistan that means a degree of connectivity no other medium can provide. Not just to family and friends, but to the possibility of a better life via the web, or at least to the escapism of television.

For the rest of us in the pampered West, we use it as a productivity device and a distraction, but we should be viewing it as a doorway onto a vastly different future.

When crime committed is not just saved on film—from Rodney King to the catwoman of Coventry—but beamed live thro to services that scan activity for signs of danger, the individual may be protected in a way they are presently not.

We may need less medical training if, during the golden hour after an accident, we can use a portable device to measure and transmit vital signs and receive instruction. Point the camera at the wound and an overlay points out the problem and what needs to be done. Point and click triage, anyone?

Small steps. But I can’t help wondering why I’m more inspired by the imaginative and enterprising use of cellphones in places like Afghanistan, and why I’m less than impressed by the vapid self-absorption of the average smart phone user in our First World.

Now I’m heading back to the guard hut to watch the late soap.