Streaming Services At The Breaking Point

Some major media properties might not realize it but they are too late. What are they too late for? They’re too late to compete as direct-to-consumer streaming services. EPIX jumped into the fray this week with a new service that will deliver its programming via an app, like HBO, Showtime and Starz before it, the service will not require a customer to be a cable subscriber in order to use it. Instead users will subscribe directly to EPIX. But I honestly think that EPIX and those that will inevitably follow have already missed the boat.

Not that EPIX doesn’t have a whole lot of really great content offer, but does it have content to offer that will hook people instead of HBO and Showtime? Will it be able to pick up a kind of viewership that Netflix has? Probably not. EPIX is not a brand that people flock to in the way they do the icons of the business. Maybe it does not have to be in order for it all to work out. But if it hopes to compete with HBO Now, much less Netflix, it has a lot of headwinds to overcome.

Netflix is probably only in the position that it is in because it established itself as a standard far before anybody else could. Saying that they wanted to be HBO before HBO became Netflix with a very prescient strategy as HBO has tried to become Netflix with programming like HBO now. But since Netflix established its beachhead followed by Amazon and the conglomeration that became a Hulu nobody has been able to get into this market with the kind of success seen by the big three. And that even includes HBO. Even with the show of shows, HBO’s Game of Thrones, HBO now has not come close to the subscriber base that Netflix has. Further complicating things for EPIX, Stars has already been on the market for a couple of years with its own streaming service. The two networks have different catalogs of course and different programming but as we have discussed in the past there has to be a point where people just don’t care to add anything else.

What’s more likely to happen as the market continues to grow our two things. One scenario that people drop and add programming since it has no contract depending on what show is coming out. Somebody may add HBO now because of Game of Thrones then drop it and add stars because of American Gods but then drop it and follow that pattern as must-see TV comes along. Services may well count on people being to busy or lazy to cancel after that period and keep it anyway. The other scenario is that people will pick a service or two that they like that gives them a good overall value and find other ways to watch the content that they want to see through piracy. That is the unfortunate reality.

The big problem for most of these channels is there are not all that many must see programs on any given platform. For HBO right Now the hot shows are Game of Thrones, West World (sort of) and Real Time with Bill Maher. Can anybody rattle off their top five shows on Starz right now? Maybe so. But you would have to be a real hardcore fan of their programming to do so. And what programming can you not live without?

The thing that a lot of these companies don’t seem to understand is that in order to compete with Netflix you have to present a package that appeals to whole families not the fans of a show. In my home my daughter watches a lot of anime my wife loves documentaries. I like weird conspiratorial things and the gritty original programming like The Punisher or the frontier. We all like a lot of the general movies though we know some of them (like the Disney Marvel movies) aren’t going to be available once Disney gets in on the game. Hardly ever do I feel like I’ve seen everything worth watching on Netflix because there’s always the comedy specials and other original programming to go along with more esoteric things they pull in from other places. Plus they are always releasing something new.

But when it comes to HBO, it’s Game of Thrones. The other programming is good but I don’t think that 30 million people or more are waiting for the next season of anything else. Much less what EPIX has to offer. If people say that losing Disney programming is going to hurt Netflix what do you think it’s going to do to EPIX. I am beginning more and more to think that we are going to see a rash of mergers and acquisitions over the next year or two when it comes to the streaming properties. Other companies are going to need the kind of ammunition it takes to take on things like a Disney/Hulu/ESPN small streaming bundle. Starz on its own or EPIX on its own even a Warner properties on its own probably can’t pick up enough momentum 10 years in to make it last.

The only other way to look at this is that the companies behind these services do not envision them as one day having hundreds of millions of subscribers. The WWE Network has thrived with close to 2 million subscribers. Maybe these fledgling operations are hoping to find a way into this type of level. If so, just maybe they will find a dedicated enough or even “lazy” enough, audience to hold on to multiple services no matter how little they actually watch on a given day.