One analyst predicts 2020 may herald the ”return of the bundle“
There’s never a dull moment in tech, media and entertainment. Change moves at breakneck speed — be it Roku’s stock price or the latest Facebook controversy.
TheWrap asked a handful of industry analysts and insiders to share their best bets for 2020. Some of the predictions, such as Apple buying a major studio or Spotify getting acquired, are pretty juicy.
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Below is a roundup of what they had to say. (Italics represent a comment from yours truly.)
Paul Hardart, former Warner Bros. executive and current head of the Entertainment, Media and Technology Program at NYU
I have [plenty of predictions] related to film and independent film, but rather than play it safe let’s go with something a bit more provocative. In the race for companies to move to direct-to-consumer relationships and having recurring, predictable cash flow from subscribers and more consumer data, I’ll predict that Spotify is acquired in 2020.
And which company will be the one buying it?
Let’s go with one of the FAANG’D companies — Facebook, Apple, Amazon, Netflix, Google or Disney.
Mike Shehan, founder and CEO of SpotX, a digital video ad platform
Next year will be exciting for a number of reasons. Fragmentation across the media landscape will continue to be a challenge for both viewers and advertisers, with more media owners building direct-to-consumer apps for connected TV and beyond. This will allow publishers to further develop their audiences while harnessing invaluable data.
Device manufacturers like Roku, Samsung, TiVo and Vizio will become even more important players within the advertising ecosystem than they are today. As more consumers purchase their devices, they will continue to “own the glass,” which means they can control the ad inventory and its dividends. Advertisers will lean on these device manufacturers more because they harness a ton of proprietary audience data
Peter Csathy, Chairman of CREATV Media, a Los Angeles-based media and tech advisory firm
“The Great Streaming Wars” and global subscription video on demand (SVOD) land grab are finally fully “on” after years of anticipation. Disney+ exceeds expectations, Apple TV+ underperforms, and Netflix faces new headwinds as it plows forward with its Herculean content budget that ballooned to $15 Billion-plus in 2019 (and its rising debt load to support it).
Meanwhile, AT&T’s “all in” HBO Max bet, NBCUniversal’s Peacock and Jeffrey Katzenberg’s mobile-first Quibi find it hard to take off in those same headwinds due to consumer confusion and “subscription fatigue.” Advertising video on demand services (AVODs) like Viacom’s PlutoTV — an anticipated antidote to that SVOD fatigue — are also lost amidst the noise. Relentless SVOD pricing and exclusive content battles continue unabated in this new “golden age” of movies and television in which the line between the two increasingly blurs (and where the phenomenon of “Peak TV” is nowhere yet to be found). Apart from consumers, Hollywood creative talent is the great beneficiary of the sheer volume of big budgeted stories being told.
In a bold and audacious $1 billion-plus fueled counter-programming move, Katzenberg’s and Meg Whitman’s “Hollywood-meets-Silicon Valley” mobile-first SVOD marriage, Quibi, launches. With industry expectations generally low, Quibi surprises in its early months in terms of subscriber numbers bolstered by bundling with T-Mobile. SVOD behemoths take notice and scramble to define their own mobile-first strategies, even as Quibi attempts to prove out its business model.
You can find 9 more forecasts from Csathy in his recent predictions newsletter.
Jon Giegengack, principal analyst at Hub Research Group, a digital entertainment research firm
2020 may herald the “return of the bundle”: As the number of shows and platforms continues to grow, so will consumer desire for a simpler way to access and use them. So in 2020, we’ll see more aggregation — including traditional cable and satellite providers integrating content from SVOD providers, or platforms being bundled together (like the Disney+ bundle.)
Andy Shenkler, Chief Product Officer of Deluxe Entertainment
As the proliferation of additional services enter the market, the significant increase in both original and catalog content in hundreds of regions will continue unabated. Working to simplify the complexity of global day-and-date releases across all parties in the content ecosystem will be paramount. Achieving this will force further accelerated adoption of cloud-based workflows and the consolidation of those bespoke activities integrated into native cloud media supply chains will finally become the standard across the industry.
Toby Holleran, senior analyst at Ampere Analysis, a London-based research firm covering Hollywood and media
While our recent survey waves have pointed at the amount of streaming services U.S. consumers are willing to take is flat (2.6 services per US SVOD household has been fairly consistent in our recent consumer waves), I expect this to jump to around 3.5 in 2020. While these may not all necessarily be direct paying relationships, such as consumers who are receiving Disney+ for free through Verizon contracts, or those getting Apple TV+ for free with new devices, it will continue to drive subscription OTT growth in the US throughout 2020.
Neil Landau, screenwriter and UCLA lecturer
I predict Netflix will continue to thrive… but eventually be acquired by Alphabet/Google.
Why is that?
It’s a [nearly] trillion dollar company buying a multi-billion dollar company. Digital Darwinism.
AppleTV will fail. HBO Max will eventually downsize and become the boutique, highly discerning, premium network again called simply HBO. And Disney+ will conquer the world, including China. [Lastly,] broadcast networks will all become AVOD.
Alex Malafeev, co-founder of SensorTower, which offers metrics and data on the global app economy
Close to 80% of the top 100 mobile apps in 2019 generated revenue via subscriptions. We see this fundamental shift in the market expanding to encompass a wider array of apps throughout 2020, as more categories of apps beyond entertainment, fitness, and dating transition their business models to capitalize on this trend. We further expect mobile games to adopt subscription monetization at an increased rate, spurred by the success of season passes in high-profile titles from heavyweights including Tencent and Supercell.
Brian Frons, former president of ABC Daytime and current lecturer at UCLA’s Anderson School of Management
Apple buys Lionsgate, MGM or Paramount (from ViacomCBS) — or all three. Netflix activates an app feature that allows viewers to stream their entire library in short form–the week before Quibi begins.
Baby Yoda is the number one meme of 2020. And “The Mandalorian” will turn out to be Brienne of Tarth.