The past decade was the story of Netflix.
Prior to Netflix, the TV viewers weren’t the customer - instead TV networks would sell audiences to media buyers looking to advertise. But Netflix changed the system. It went direct to the consumer and changed the dynamics of the industry.
It turns out that audiences want a service that keeps them front of mind and isn’t designed for the likes of Harry Crane with his spreadsheets. What more - international audiences liked that shows would debut on Netflix globally at the same time, eliminating the months/years-long wait for shows to be distributed to international territories.
Netflix’s share price rose, viewers flocked to the service, and Hollywood went chasing the new paradigm. After initial resistance to disrupting existing business models, in the past 18 months Hollywood got serious about streaming.
2021 is where this all starts locking into place.
It’s going to be a wild year ahead and what better time than to kick off the new year with a look at what we can likely expect from 2021 - new streaming services, the impact of those on the rest of the industry, and what we’re going to be watching.
[Note: I’m keeping this list more TV-focused than movie-focused. Obviously the theatrical model is in a lot of flux, but honestly, I think it’s too early to really get a handle on how that industry is changing and what it will even look like 6 months from now]
The launch of Star (on Disney+) and Paramount+
Probably the biggest thing to watch in 2021 is the reboot that both Disney and ViacomCBS are making in their streaming strategies. It’s a reboot that will see the birth of two new streaming services - Disney’s Star and ViacomCBS’ Paramount+.
Disney has a wildly successful product with its family-focused Disney+ streamer, but it has a Hulu problem: Make it too successful and it’s going to cost them billions of dollars. Disney needs to keep the value of Hulu down to minimise the money it’ll be paying to Comcast to buy out the remaining stake in the streaming service (they share ownership until 2024 when Disney will own Hulu in full, but Disney will have to fork out at least $27 billion for it. That cost rises the more popular Hulu gets).
This puts Disney in a sticky spot. It needs to go to market with a streamer that targets adult viewers, utilising the extensive Fox library it owns, but it can’t supercharge Hulu with too much value. So Hulu will just lumber along in the US as Disney takes on the international market with an entirely new streaming service.
Star will launch outside the US. It’ll be a library of shows and movies for grown-ups (think Die Hard, Planet of The Apes, The X-Files, etc) and will most likely include Hulu originals and new shows from FX.
Depending which country you’re in, Star will look and feel a bit different. In countries like Australia, it’ll be built into Disney+ where subscribers will see a small price rise. Subscribers will be asked if they want to access Star and once clicked yes, it’ll populate Disney+ with the new additional content. Elsewhere it’ll also include live sports and other more broadcast-like content.
The question for me (and this is likely a 2024 and beyond question) is what Disney will do to eventually merge the Star and Hulu platforms. Does Hulu become Star in the US? It might be a good way to rebrand itself as being something more than a destination US broadcast TV shows.
And then there’s Paramount+
Back before the ViacomCBS merger, CBS launched its own streaming service - CBS All Access. The strategy was to make viewers pay to stream the shows they could otherwise watch on linear TV for free, but to sweeten the deal with a handful of originals (such as The Good Fight and Star Trek: Discovery). All Access launched in a few other countries too, such as in Australia where the CBS-owned Ten network launched its streamer 10 All Access.
The problems with All Access: a limited library and it was expensive. Netflix was a way better deal and that streamer set expectations for the value that subscribers expect.
When CBS merged with Viacom, it gained access to the extensive content library owned by the traditional cable TV powerhouse. The cheaper, more disposable content is being used on Pluto TV (The free ViacomCBS-owned linear channel streaming service), while scripted dramas and comedies will be available on Paramount+.
ViacomCBS will rebrand All Access as Paramount+ and go to market with a much stronger content offer that will only get better as the company reconfigures itself as it goes streaming-first, broadcast second.
What’s interesting outside the US is that Paramount+ will also include new TV shows from Showtime. This gives it a constant flow of buzzy premium TV shows. Paramount+ will actually prove to be better value outside the US than in the US with the addition of this Showtime content.
(Here in Australia, streamer Stan was the exclusive home of Showtime. That deal comes to an end within the coming weeks. My understanding is that existing Showtime series will continue on Stan - ie new episodes of Billions will go to Stan, while new series will launch on Paramount+).
A paradigm shift
For first time ever, international audiences might be getting a better deal than in the US. Obviously, we don't know what the content offer will look like, but with Paramount+ streaming Showtime content internationally and Star streaming titles from the Fox library (with movies and shows not available on Hulu), it starts to look pretty promising for an audience segment often considered an after-thought.
Unplugging the COVID-19 TV pipes
The impact of COVID-19 was especially felt on television in the final quarter of 2020. Putting aside the massive hit broadcast TV networks felt as a result of lower ad spends by companies impacted by the down-turn (that was felt almost immediately), it was at the back-end of the year that production delays stopped most new shows from debuting in the US in the normal Sept-Oct timeframe.
Netflix was fine - it had a bunch of shows already in the can, but a lot of other streamers were impacted. In the US Peacock was supposed to launch with the Olympics (which didn’t happen). And then there was HBO Max which was set to launch with a huge Friends reunion show.
So now we have 2021 and networks have production ramping up again. There’s not only a whole lot of returning and new TV shows, but there’s also a newly rescheduled Olympics (probably), and cinemas which have a backlog of major 2020 product will now be debuting that in 2021.
You are not going to be short of big ticket viewing options.
The international squeeze
With the big name US media content powerhouses going direct to consumers internationally as they take streaming platforms globally, it adds pressure on local broadcasters and streamers as they’re now not only competing with these giants - but also there’s set to be far fewer shows and movies available to buy from the US.
Consider here in Australia (current location of the Always Be Watching head office) - in 2021 we’ll have Disney+ (now with Star), Netflix, Paramount+, Amazon Prime Video, Apple TV+, and Britbox. That’s before you start getting to the second tier and niche streamers like Tubi, Kanopy, Accorn TV, Crunchyroll, Hayu, etc etc. That’s a lot of content on offer with deep libraries and a constant flow of big-budget buzzy titles. And there’s only so many hours in the day/money consumers want to be spending on multiple services.
Where does this leave subscription services like Foxtel/Binge and Stan? What about commercial broadcasters like SBS, Ten, Nine, and Seven?
And this is just Australia - the exact same issue will be faced in every other global territory. My assumption is that we’ll see a rise in bigger budget independent international productions as the content holes get larger, needing to be plugged by networks seeking attractive content.
The irony is that wile Netflix interrupted the existing global market, it was also Netflix that taught global audiences how to watch foreign language content from across the world, which opens the door for a TV market less reliant on US product.
Mergers and acquisitions
The challenge for media companies is settling on a scale to operate at. Either you keep operations tight and lean to operate at the lower-end of the market, or you scale right up to compete head-on with Netflix. Many companies can’t scale up to that size, so it becomes an issue of downsizing and/or looking to sell-out. Rupert Murdoch did this with his Fox assets, selling the bulk to Disney while scaling down to focus on his ‘news’ business.
It’s said that ViacomCBS still need to build scale, so they may be looking to buy. Good news for the likes of AMC Networks, Lionsgate, and MGM which each have attractive libraries of content, but are feeling the squeeze. There were reports in December that MGM will be taken out to market in 2021, but I wouldn’t expect to see that as the only big sale this year.
Blue sky TV
It may be a new year and vaccines are starting to roll out, but the COVID-19 pandemic rages on. The common thread from a lot of end-of-year wraps has been that people spent their year looking for TV that would cheer them up and distract them from the all-too-real misery currently facing us all.
Expect TV to deliver on that front. Dark and gritty isn’t what viewers are looking for - expect brighter, more peppy television. Think less The Handmaid’s Tale and more Magnum PI. History has shown that at times of existential dread, viewers tend to flock more to lighter fare. We saw it happen in the 60s as Vietnam War pressures intensified, in the 80s with cold war nuclear fears, and in the early 00s post Sept 11.
This isn’t to say that viewers won’t embrace darker series (good TV is good TV), but it’s likely that fewer of these types of shows will find an audience. This isn’t necessarily a call to see more Tom Selleck-like moustaches on screen again.
But would that be such a bad thing?
Throughout 2021, Always Be Watching will continue to update you daily with news and commentary about all things TV, movies, and streaming. If you find value in the newsletter, consider supporting it financially with a few bucks a month.
It’s going to be an exciting year ahead. Let’s see where it takes us.