Hollywood’s traditional media players are facing an unprecedented challenge to their business model as “cord-cutters” opt to cancel their expensive cable subscriptions in favor of on-demand streaming services.
While pay-TV providers continue to charge well in excess of US$50 per month for the top packages, Netflix Inc, Hulu.com and Amazon.com Inc are serving up an ever-growing menu of acclaimed original content for the price of a cheap bottle of wine.
Cable may still be king when it comes to the breadth of choice, but streaming on-demand video (SVOD) hits like House of Cards and Orange is the New Black, with 49 Emmy nominations between them, are competing on quality.
Photo: Reuters
Earlier this month, California-based payment service provider Vindicia Inc published the results of a survey of 1,000 US adults who had at least one paid subscription service.
Forty-five percent of respondents cited “over-the-top” (OTT) video services such as HBO Now, Netflix and Hulu as most important to them.
Crucially, more than half of the key “millennial” generation — those in their 20s and 30s ardently courted by the advertisers — said they used SVOD.
Research by global media consultancy LEK published in January showed a similar pattern in Britain, where the majority of millennials expecting to get OTT in the next year were planning to cancel or reduce their pay-TV spending.
“In this increasingly on-demand world, the quality of content will be more important than ever before,” said Martin Pilkington, head of LEK’s European media, entertainment and technology division. “The race is already on, a good illustration of the new dynamic being the very high level of investment in original content by Netflix and Amazon.”
While Netflix remains the largest SVOD service, Amazon is staking its own claim, with Transparent and Mozart in the Jungle picking up multiple Emmys and Golden Globes.
Hulu has been slower to roll out original content, but recently premiered 11.22.63, a time-travel series produced by J.J. Abrams, with religious cult drama The Path due out on March 30 and already creating buzz.
“I could tell on the page there was no way we could do this on one of the networks,” said Jessica Goldberg, creator of The Path, which stars Aaron Paul of Breaking Bad fame. “Hulu came to the table in such a passionate way. They saw what we wanted to make, they let us push the envelope, they let us take time and breathe with stories. So it has been an amazing marriage.”
Streaming has emerged as a threat to cinemas, too, in the guise of the controversial start-up “Screening Room,” which is planning to offer movies in people’s homes on the date of their theatrical release.
At US$50 per rental plus US$150 for a set-top box, it remains to be seen whether the idea, led by social media impresario Sean Parker, will be of interest to anyone who is not a film buff, or rich.
However, it already lists among its shareholders such Tinseltown royalty as Martin Scorsese, Steven Spielberg and Peter Jackson, who said in a statement to Variety magazine he was satisfied the service was “very carefully designed to capture an audience that does not currently go to the cinema.”
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of