Is the market for streaming services cooling?

Mark Douglas, CEO at MNTN, considers whether there might be room in consumer pocketbooks for yet another service, or if the streaming wars are shifting focus to exclusive content.

Video Transcript

- We want to talk about what's going on in the streaming wars, because you may have noticed, if you subscribe to YouTube or different kind of streaming services, you're getting a teaser right now. For $0.99, you can pick an additional premium service like a showtime or something else for two months, and then, of course, you get hit with the usual fee.

But so what's going on here? And who's going to win the streaming wars? Let's bring in Mark Douglas. He is the CEO and President of MNTN. And very simply put, I think most people have now done the math, whether they have cable or whether they have streaming, nobody's really saving any money by cutting the cord. But those of us who've cut the cord, what's the message we're sending to streaming services? And what should we prepare for?

MARK DOUGLAS: Well, I think you're saving a little money. Cable, like in Los Angeles where I just live, cable's $180 a month. But putting that aside, the way to think about it is most households basically poll that they want three streaming services. One of them, "Netflix" just locked in as one of them. They generally want some form of live sports. So "Hulu" or "YouTube TV". They get that live programming. And then number 3 is a rotation.

So what's happening is people are canceling subscriptions, but they often just replacing them with others. So whoever has the current hit show is going to get the money. And that's kind of the way things have shaped up.

- And then typically, how long does a consumer hold on to a particular platform? Like, for me, I got Peacock over the summer because I wanted to watch the Olympics in real-time, and then I really don't watch it too much for anything else. So how many do people typically have? And then how long do they hold on to them?

MARK DOUGLAS: Yeah, I mean, I don't think there's any good data on that right now, but I think what you said is generally the behavior. There's a new season, "The Mandalorian", on Disney Plus, which I subscribed to, and then I suspended my "Disney" subscription and replaced it with "Handmaid's Tale" on Hulu, and things like that.

So it's just, like, follow the premium content. And it's generally 10 episodes, 10 weeks. And "Netflix" has the luxury of-- they can give you all 10 shows at once, because, basically, no one ever cancels their "Netflix" subscription.

SEANA SMITH: Yeah, right. Speaking of the fact that content is key and that's why people or that is the D-thing that people care about, who do you think is leading this race? Is it still "Netflix"? Or one of these other offerings, really, coming up and challenging "Netflix"?

MARK DOUGLAS: Yeah, I mean, Netflix, I think everyone was surprised at how much content they had in the early part of the pandemic. It just kind of showed the kind of the unreleased content they had. And I think things thinned out. But they're releasing a lot of content right now. So I think they remain king.

"HBO Max", "HBO" has always been right up there with premium content. There's a new season-- I sound like an entertainment reporter right now. There's a new season, I think, of "Game of Thrones", like, they're extending the series. So I think, it's a Netflix game, "HBO Max", and then "Disney" with all that content. "Star Wars" will just always draw viewers. And so those are the names I think most people have in their head.

- Want to get your comments on what's going on in this fight with "Hulu" and "Disney" and what's really at stake here. For the record, I like "Disney Plus Go" and it was no longer free. No children in this household so it was an easy one. Seana, get ready for singing along with "Disney" for the next 18 years. But what's really going on with the threats of "Hulu"?

MARK DOUGLAS: Well, you know, Comcast owns NBC and they have content on "Hulu". They want to bolster Peacock, their service. The problem is that "Hulu" has premium content. We talked about "Handmaid's Tale" and other shows. And so they're in some way competing with NBC.

That being said, I don't think people are buying Peacock subscriptions to watch reruns of "30 Rock". So I think it's a negotiation tactic. If NBC and Peacock want to draw more viewers, they have to put money on the table to build that premium content, that content that draws viewers. Just bringing back "30 Rock" and "SNL" is not going to cut it.

So to me, it looks like a negotiating tactic with "Hulu" in terms of the pricing agreement they have and the other aspects of the agreement and that. And I don't think that agreement is going to end.

- Is the next phase of this revolution going to be-- I understand you need lots of money, seed money to create content. But if I'm like the producers of "Ted Lasso", why do I need a "Netflix" to distribute? I can create an app and I can undercut the pricing. And couldn't I just go that route? Is that what's going to come down the pike eventually?

MARK DOUGLAS: Well, I don't think it's highly likely because I think there can definitely be some breakouts. Just like their indie films and the film industry, that break out. But if you put money down, you need to know that someone's going to buy that show. And the economic model there is that you need a "Netflix", a "Disney". You need these players to basically guarantee they're going to buy that content.

And so I think there may be a few more independent, we can call them television producers, but for the most part, you're still going to have big distributors who can Finance and guarantee that money invested in these shows is going to produce a return. And so I think things will largely stay the way they are now.

- And so, I'm going to ask you really quickly, In a landscape where content is king, how does a latecomer like "ViacomCBS", "Paramoun Plus" compete with "Netflix" and "Disney Plus"? I know they've got great shows. But are they too late into the game to catch up?

MARK DOUGLAS: Yeah, at this point, being a subscription service, I think is pretty much off the table. It has to be ad-supported. It has to be content that viewers find compelling. You're not going to get a subscription. And I think, even for subscription services-- I was surprised when "Disney" did not have an ad-supported option, where you could pay even less or possibly even zero.

To get "Disney Plus", I think that may be coming. I don't think it's out of the question that "Netflix" eventually has an ad-supported option and that is at a lower price point, possibly even free in some countries, maybe even the US.

So I think these big players can enter the game, but they have to answer the game. They did with cable ad-supported options. They're getting very little in the way of subscription fees. And just draw viewers.

- Well, next time you're on, I want to talk about what you just said, because I think "Pluto" is a "CBS" property and it's ad-supported. And you can watch all the reruns you don't want to watch, but you can get some other stuff-- "Smithsonian, "MotorTrend TV". And it's all free, as long as you want to watch the ads.

Mark Douglas, have a wonderful Thanksgiving. Thank you very much for joining us. Mark is the CEO of MNTN. He's the CEO and president.