Part Three: On Demand versus Live Streaming or, As You Like It

Note: Again this blog is wholly my personal opinion. But I assure you, it is grown from Grade A, free range organic market realities. If you are in the media world you'll find the end result a bit bland to your liking. But we will be getting to ZE HEAT. Eventually.

In 2005 YouTube demonstrated to the world the viability of broadband internet to deliver on demand consumer-grade audio / video content to the masses. Simply upload a video file to a cloud network and other users could select and view that content whenever they desired. Huzzah! Both Silicon Valley and the studios took note. A year later in 2006, YouTube had been purchased by Google and YouTube rival Grouper had been purchased by Sony Pictures. With this the age of mass media internet streaming and Direct to Consumer industries had begun. But it was not until the pivot of Netflix from DVD mail delivery service to video platform service did the studio industry realize the financial potential in this model.

Grouper, renamed Crackle by Sony Pictures, slowly shedded its user-created content that was (and is!) the staple of YouTube and instead became solely a platform for Sony Pictures' vast library of film and television series. Google, with no wealth of professional content, could not follow suit. Crackle adopted an Advertising-based Video On Demand (AVOD) financial model where much like traditional over-the-air broadcast television, entertainment content was free but interspersed with commercial content. NBC (and later ABC and Fox buying in) followed suit the next year with hulu also parroting the classic AVOD model. Crackle and hulu thought 2007 would be their banner years.

Now remember how I had mentioned Netflix? Like c'mon it was just over one paragraph ago. Go get a cup of coffee and come back. OK? We good. Good. In 2007 Netflix launched their streaming option but unlike the established studios, Netflix retained their Subscription-based model, operating under a Subscription-based Video On Demand (SVOD). This simple basic concept, much like a cable or satellite distributor's monthly bill, turned out to be industry-shaking revolutionary.

From 2006 to 2011, Amazon Video dealt solely in the final version of VOD: Transaction-based Video On Demand (TVOD) aka another legacy model aka the Blockbuster model where each "rental" or "purchase" was a one time cost to the consumer. But Netflix's subscription service model's monthly dollar stream was too alluring. In November 2010 hulu began offering hulu+, their SVOD service. Three months later in February 2011 Amazon also adopted a Netflix-style SVOD model by presenting a library of licensed content to Prime subscribers as an additional service for their membership.

For the next (almost) decade Netflix, hulu, and Prime Video ruled the mass media internet streaming video world. But two major events would shake apart this uneasy truce bringing us to THE PRESENT DAY. Yes. FINALLY. I know right?

In 2007 Echostar-Dish TV bought once-thorn-in-their-side SlingTV and began developing better ways to distribute satellite / cable style channels across the internet. For eight years, Sling TV operated as a long distance TiVO-style DVR, a personal Video On Demand service.

So our first major event hits in 2012 as Dish TV experimented with the live streaming service DishWorld. Following its success, Dish TV re-launched Sling as an official virtual cable package in 2015. No more video on demand! It was live TV! With channels! Just like cable! BUT OVER THE INTERNET ACCESSIBLE ANYWHERE. Other distributors and studios followed suit. The same year Sony launched PlayStation Vue and the following year DirecTV launched DirecTV Now.

These services gave the consumer the same content as a cable or satellite subscription but still had a monthly bill. Following DishWorld's early success, some companies and individuals foresaw a virtual internet distributed "cable" style channel lineup service that would be wholly paid for by advertising. PlutoTV, Xumo, tubi began a two step process: licensing deep library content and branding them as single channels on their services (a 24/7 Dr. Who channel! a 24/7 Law & Order Channel! a 24/7 action movies channel!) as well as signing live-streaming internet distribution contracts with everyone from the smallest one-person companies to the largest corporations. The model: acquire super-low cost content and offset every cost with advertising. Since Live Streaming is modeled after cable television, the theory is that cable-style viewing habits like leaving the channel constantly running (unlike video-on-demand and it's ARE YOU STILL WATCHING popups) would follow, giving extra exposure to the commercial content.

Our second major event is shorter. YES. YOU'RE WELCOME. Upon its launch, hulu was seen as a risky venture so multiple companies invested money (and content) to mitigate the risk. Once Netflix (and their internal hulu+ numbers) showed how profitable the SVOD model could be, each involved studio began drumming up their own SVOD services. Viacom CBS launched CBS All Access. Through the purchase of Fox and a buyout of NBC's shares, Disney wholly acquired hulu (for their adult audience) and began launching Disney+ (for their children and teen audience) and making the wise decision to bundle these packages (see previous post!). Warner Bros is on the cusp of debuting HBOMax. And NBC is tentatively dipping in with AVOD peacock (but has made noises of converting it into a SVOD service, following its old hulu to hulu+ playbook).

So for those cable cutters who could afford a "new" monthly bill, the Direct-to-Consumer SVOD landscape has been charted for this upcoming decade. But what about the people who cannot or do not want to pay for content? AVOD has shown its limitations. Commercials flow better in Live Streaming than On Demand.

Within this past year, a race to acquire Live Streaming companies and "freemium" viewers has begun. ViacomCBS who offers the premium CBS All Access scooped up PlutoTV. NBCUniversal's parent company Comcast just scooped up Xumo. Expect at&t's Warner Bros and, possibly, Disney to follow suit. Below is a chart of monthly viewers for NBCUniversal's peacock and Xumo as well as ViacomCBS's Pluto TV and CBS All Access. Forgiving NBC's bold predictions of peacock (their eventual SVOD service should be closer to CBS All Access' numbers), you can see why ViacomCBS would want to supplement CBS All Access with Pluto TV viewers.

Dollars upon dollars. Eyeballs upon eyeballs.
Good times.

Stay tuned for

• No really local n00z is coming up!
• The Verizon Service ALSO had Ben Affleck!
• Wait, why did you stop talking about Crackle halfway through this post? REASONS!
• Fox bought freemium live streaming Tubi! Talk about THAT. Oh will WILL y'all!
• And (still) so, so much more!