Streaming Markets Explode

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My guess wasn’t too far off. In fact, I’d say that given the industries’ lack of experience in this area, I was close enough to satisfy any statistician. After all, streaming is new to everyone and taking the world by storm. The speed at which new channels are releasing is faster than most expected. Netflix is no longer the sole player in the sandbox.

The day before Disney+ released, I estimated that at the end of its first three months the number of subscribers would hit 30 million. Disney’s analysts estimated 20 million. The final count was 28.6 million. Disney was happy that they came in higher than was estimated and I was thrilled that my number crunching landed me close to reality.

Disney+ will obviously cross the billion-dollar mark this year and will continue to give Netflix a run for its money. Walmart is next in line to release its new streaming channel followed by Quibi and Peacock, with HBO Max and Discovery/BBC right on their tails.

Many independent filmmakers are excited about the prospects of more venues for the potential release of their films, while others wonder how many current streamers will lose ground to AppleTV+, Amazon Prime, Disney+ and NetFlix battling for viewers.

Industry experts have suggested that any company with a niche audience and 500,000 subscribers will be able to withstand the storm. Small companies like PureFlix who bounce between 125,000 and 250,000 subscribers will have to figure out how to cross the 500,000-subscriber barrier before it’s too late.

Solidifying a customer base is always more difficult than most think in the streaming world because it is product-centric. There are two kinds of viewers that need to be appeased: the moviegoers, and the binge TV watchers.

The audience that tunes in to watch long-form stories like movies and mini-series look for a title that shows them something they’ve never seen before or takes them to a place that they’ve never been. Those who like to watch serialized programming and binge-worthy titles look for character development that is done so well they can relate to them as a second family. Both types of programming are needed to capture and maintain a solid subscriber base to keep the company afloat regardless of shifting market trends.

Disney+ knows there audience very well and had no problem launching new shows to grab their attention. The Mandalorian was the biggest hit with viewers splashing millions of comments on social media about Baby Yoda. Other titles perfectly aimed at that same audience are already in production.

PureFlix is in a more precarious position. They are too tightly focused on what they perceive their niche market to be that few quality production companies create the type of content their audience needs. In other words, as the market currently stands, PureFlix is not in a position to produce enough new niche-focused content to grow their subscriber base, especially since acquisitions are light in their niche due to outside companies selling titles to NetFlix.

Disney+ will rack up a debt of $4.9 billion this year, in spite of its fast growth, on new and current programming to solidify their current subscribers and draw in new ones. NetFlix has budgeted $17.3 billion for new programming in 2020.

I estimate that PureFlix can only afford to spend about $20 million, outside of donations or investors, on new products this year since their theatrical releases have waned over the past couple of years. Their niche market is too small and extremely hard to please. However, many of their subscribers are okay with PureFlix loosening their focus a bit, since they are also willing to spend money on NetFlix and Disney+. Time will only tell if PureFlix expands its new content.

The world of streaming has changed the entertainment and edutainment industries. It won’t be too long before you’ll see micro studios pop up to produce niche programming for specific markets including Magnolia TV network that is poised to take HGTV head-on in battle this fall with Chip and Joanna Gaines at the helm.

Copyright © 2020 by CJ Powers


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