What's next for streamers after Hollywood strikes wrap up?
Hollywood studios and streaming platforms are entering comeback mode from the Hollywood strikes that halted major productions and slowed down fresh content output.
Brightcove (BCOV) CEO Marc DeBevoise sits down in-studio with Yahoo Finance Live to highlight how streaming bundling strategies and ad-tier subscription prices may bring business back to streaming services like Netflix (NFLX), Amazon (AMZN), Warner Bros. Discovery (WBD), Disney+ (DIS), and Paramount (PARA).
"The free ad-supported streaming television revolution... has really ramped up the opportunity for advertising on these services. You'll see each subscription service also have an ad-supported with lower priced tier over time," DeBevoise says, adding: "The winner there is streaming overall."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
- And Marc, when it comes to the fact that so many of these companies overspent, to put in your words, when it comes to content, we've seen those losses really be a theme here over the last several quarters. We also started to see more bundling. And we're seeing more and more companies, it seems by the month, that are trying everything they can to lower those churn rates. Do you think that's going to work? And I guess what does that signal just in terms of is this the first step to broader consolidation?
MARC DEBEVOISE: Yeah. So look, I think they are certainly looking at bundling as a way to reduce churn or a way to impact, you know, how they can retain those customers longer-- longer term. But at the end of the day, you're going to see those ARPPUs come down as you do those bundles, right? That ARPPU being Average Revenue Per User. So I think at the end of the day, they're going to give consumers a lot of different choices over the next few years. You're seeing Max and Netflix come together on Verizon's +play. You see the rumor about my old job Paramount Plus and-- and-- and Apple coming together.
I think ultimately the long term those-- those channel storefronts that you see on Amazon and Apple and others and I think many other technology platforms will start to bring together a lot of consumer options. Right? You'll have multiple choices of where to go. And you'll have multiple choices of what bundle to create on your own. And I think that's going to be a really great opportunity for consumers. Hopefully, it reduces that churn. But at the end of the day, these services are going to need to find a way to be more efficient with the spend that they're doing.
- Yeah. Marc, how much pricing power do you think a lot of these streamers still have? The fact that they need to rely maybe a little bit more heavily on some of these bundles, trying to lower the costs, are we almost near that maxing out point when it comes to pricing, at least for now?
MARC DEBEVOISE: I think it's going to depend on the content and what you put in each service. Right? You've seen Netflix have meaningful power to go to almost $20 on an average subscriber. And you're seeing others go the other way with lower priced ad supported services. So I think you're going to see a spectrum. It's not a one size fits all.
Ultimately though, the idea that they all do need to save money on creating these services, and that's both in content and in technology-- and you know, I took the job as the CEO of Brightcove 18 months ago, with the idea that we could help these companies save some money on their infrastructure. They didn't all need to create the service bespoke on-- you know, on their own platforms. And it's not just the big six. There are hundreds of these companies around the world in each territory and in each area.
BRAD SMITH: It's also been the year of the advertising tier too over these past 12 months too. Is it clear whether there's a-- a clear winner in that-- in this early onset that's being able to woo marketers and advertisers and get some of those dollars to kind of offset where some of the users perhaps are saying, you know what, we don't-- we don't even want to see the ad, so we'll either pay up, or we'll pay into that advertising tier and pay less?
MARC DEBEVOISE: Look, I love that that's happened. I think the fast revolution, the free ad supported streaming television revolution with Roku channel and the likes of Samsung TV and others has really ramped up the opportunity for advertising on these services. So you'll see each subscription service also have an ad supported with lower priced tier over time. I think each one will do it. I think the idea there is by the way the winner is streaming overall. Right? You see it ticking up in terms of market share overall in terms of consumption.
And I think we almost incorrectly look at it as like, well, broadcast is, you know, flat, and cable is down, and streaming is up. But just this is the new form of distribution and what is going to be the future globally. And so you're going to see every type of business model laid into that distribution format. And so having a strong ad supported service and a capability to be able to deliver that to users is going to be key. And you're seeing it in the ad dollar shift. Right? You're seeing ad dollars shift to that CTV platform now in a meaningful way over the past few years.
