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Cheap streaming coming to an end

Walt Disney announced its direct-to-consumer growth plans. It expects to have up to 350m subscribers to its streaming services by 2024. It is also planning to double its content investment and is working on about 35 television series. Exclusive content is seen as the key differentiator in the streaming wars and cinema bosses are still reeling from Warner’s recent announcement that it will release all of its 17 new films next year on its streaming service HBO Max at the same time as in US cinemas.

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Mikko Tuomas Ripatti

Mikko joined DNB Asset Management in June 2015 and is responsible for DNB Asset Management´s activities in Spain and Portugal. Mikko also serves as an expert for DNB AM´s equity strategies and products working in close collaboration with the fund managers in Norway. He also oversees our Luxembourg-domiciled funds.

Between 2007 and 2015 Mikko worked in Helsinki as a fund manager at FIM Asset Management where, as part of the emerging markets team, he was responsible for investments in Latin America. Between 1999 and 2007 Mikko worked for Finland’s best-known company Nokia in different strategy, market analysis and business development related positions in Latin America and Finland.

Mikko has a master's degree in Economics and Business Administration from Turku School of Economics in Finland. He speaks Finnish, Swedish, English, Portuguese, Spanish and a little bit of French.

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Ampere Analysis' latest study of the US and European subscription video on demand (SVOD) market reveals that the average US streaming household now stacks an average of four different subscription video services. In the five largest Western European countries, streaming homes have an average of two services.

The pandemic, national lockdowns and the launch of new studio-backed subscription services have all accelerated the stacking trend, and there are now more than 400 million subscriptions to streaming services across the US and the big Western European markets. But the debut of services like HBO Max, Peacock and Disney+ and the associated studio pullback in the licensing of film and TV rights to third parties means that increasingly consumers will have to subscribe to multiple products in order to access all the TV and film that they want to watch. So, while the average household is now subscribing to more services in order to access more of the latest content, rights pullbacks mean that some catalogues are shrinking.

As competition intensifies and historic licensing deals end, this trend is likely to continue. This means that for consumers, the ability to pay for just one or two streaming services and access all the key TV shows and films, is steadily coming to an end. Alexios Dimitropoulos, Research Manager at Ampere Analysis, said: “2020 has been an incredible year for subscription video on demand. The pandemic drove a massive growth in the number of subscriptions, and the new services that launched this year have posted impressive customer numbers. Consumers will have access to more high-quality content than ever before as new and existing services complete to produce more original content. However, as studios continue with their direct-to-consumer strategy, the golden age of access to cheap content is coming to a close.”

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