Direct to Consumer Video’s Big Bang Moment

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The 20,000 Foot View: 2019 marks the biggest shift in the US video market since Netflix’s pivot into streaming in 2007. Apple, Disney and AT&T-owned Warner Media are preparing for their direct-to-consumer        launches into the US market in        2019. How they fare will have a significant impact on the global evolution of video subscriptions. They will also provide the first serious domestic competition to Netflix, Amazon and the rising fortunes of Hulu’s blended subscription and ad-supported model. However, streaming video on demand (SVOD) weekly active user (WAU) penetration is flat – an early indicator of a peaking attention economy, so the new challengers need to maximise their unique selling propositions (USPs) to gain traction in a congested market.

Key Findings

• Disney+ launches on November        with a strong international, ad-free, originals-focused growth strategy 
• Warner Media launches its own        proposition beta in        2019, followed by a full launch in 2020 with a focus on library and original content
• Apple TV+ launches in fall 2019 with a show-maker led originals strategy leveraged by its iOS ecosystem
• Warner Media has the highest share of the most popular shows with        of the top ten shows in        2018
       of US consumers have multiple video subscriptions 
• SVOD penetration is highest among        year olds at       
• Cord cutters have the highest fandom for Friends, the most popular US Show in        2019
       of US Netflix subscribers have multiple SVOD subscriptions        of US Amazon Prime bill payers have a Netflix account, down from        in        2018, compared to        of Hulu subscribers, also down from        in        2018
• Netflix’s subscriber hours declined between        despite a        increase in annual content expenditure in 2018 from 2015
• Success for Apple and Warner Media will depend upon their ability to leverage their ecosystem advantages
• Disney needs to use its brand equity to leverage its mainstream family appeal for Disney+

Companies and brands mentioned in this report:  Amazon Music, Amazon Prime Video, Apple Music, Apple, Apple TV+, AT&T, CBS, CBS All Access, Comcast, Disney, Disney+, ESPN+, HBO Now, Netflix, Spotify, Warner Media