Streaming Services Can Use Creative Windowing to Succeed
By Joseph Williams
CBS Corp.’s Les Moonves and Time Warner Inc.’s Jeffrey Bewkes barely rang in the new year before attempting to make more over-the-top television history, it seems.
Already, Moonves surprised industry observers by launching CBS All Access, the first big-four network to release a dedicated streaming version of its television presence, and Bewkes has been setting precedents for streaming success with HBO GO and HBO NOW, showing the traditional TV world the kind of traction premium content can get on the Internet.
Now the duo is looking to take their shared broadcast asset, The CW (US), and deliver it OTT with a CW Internet streaming service, according to various media reports. The service may look similar to CBS All Access, including both current and past seasons of network television shows as well as a live streaming feed from the on-air network. The network is considering a digital subscription fee of $2 to $4 for the service, Bloomberg reports, undercutting All Access, which collects a $6 subscription fee.
CW fans already access much of the content online through their current website, which offers recent episodes of the network’s content, and through Hulu LLC. Netflix Inc. also carries CW series.
“If this does go through, this in a lot of ways is perhaps the role model for the smaller broadcasters and cable nets coming into the future. You’re going to have to make some kind of consideration for traditional media … and at the same time go out and get an audience that just isn’t turning the TV on,” Ooyala principal analyst Jim O’Neill told SNL Kagan.
He went on to suggest that this kind of hybrid linear-digital distribution could be a key component to the future of television in general, a position supported by Moonves himself. Increasingly, content providers will have to work with both traditional and digital distributors to create cooperative business models that guarantee content is available to consumers, however they are tuning in.
“It’s not like it was anymore. There’s no exclusivity,” O’Neill said. “Every bit of content out there is up for grabs at some point.”
President of FanTrust Catherine Warren agreed, adding that there really will not be much of a choice for networks and distributors going forward. They must be willing to negotiate cooperative, hybrid models.
“If you’re in the broadcasting world at all, you also need to have a streaming service. You can no longer get away with just TV. So 2016 will be the year that people make that decision,” she said. “To not have a streaming service in 2016 is like not having a website in the year 2000.”
Warren said that there is not any pressure for The CW to drop agreements with streaming services like Netflix or Hulu altogether or look at either service as a direct threat to a CW OTT product. As the network’s content flows from broadcast television through the Internet, it can implement some creative windowing for each service on which it appears. The company can even release shows first on its OTT service, then on broadcast, then on Hulu and Netflix and other streaming services so that each distribution channel, including broadcast, serves as a marketing engine for the OTT service. Netflix and the other “competition” then provide a way for viewers to find their way to CW content before signing up with the network itself.
If the network manages this flow-through with some savvy, it can also protect its brand identity, a proposition many networks have struggled with in the face of digital fragmentation.
“[OTT] services and then some of the companies that are big on YouTube really are exploring windowing in a lot of different ways. So it’s really fluid right now what things are going to look like, and it’s not necessarily a world in which one platform wins,” SNL Kagan analyst Seth Shafer said.
These kinds of business options are the critical decisions that will be made in 2016, Warren said. The technology to launch an OTT service is already exceedingly accessible, so 2016 will be the year for business solutions, the analysts suggested.
And The CW is well positioned to leverage that kind of decision-making, sources agreed.
“They do have a young, engaged audience — that’s good — a social media savvy audience — that’s good. All of that would fit [an OTT offering],” Shafer said.
There is little risk for The CW, Shafer argued. With the affordability and flexibility of OTT technology, especially considering the parent companies’ existing investments in solutions for All Access and HBO NOW, launching a CW service would require very little overhead. Then it is just a matter of adding subscriptions. Considering that niche streaming services like anime site Crunchyroll are considered a success at just 750,000 users, The CW may be able to justify an offering for less than 1 million customers as well, Shafer said.
Due to its young audience and niche content, The CW is uniquely positioned to experiment with its OTT product and provide a new standard from a business-model perspective, Warren said. Specifically, she would like to see a more socially focused OTT service. Netflix and Hulu are not integrating social content on their platforms in a substantial way, and she said that while her company is not working with The CW, it is working with other networks and broadcasters launching OTT products in 2016, and none of them so far are looking for a particularly social OTT platform.
“That’s something I would like to see from The CW because it’s so perfect for their demographic,” she said. “Broadcasters and networks that are going in this direction feel like it’s a big win to launch a Netflix competitor, but the really big win is to launch a social Netflix competitor.”
This is an excerpt from the original article titled “The CW’s rumored OTT service could use creative windowing to succeed” written by Joseph Williams for SNL Financial. Click here to read the full article.