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The Future Of Streaming

Will more traditional broadcasters go digital?

26Aug

You can stream pretty much anything now.

From the deplorable to the lighthearted, the illegal to the legal, there isn’t much you can’t either listen to or watch online.

Netflix’s rise has arguably been the digital success story of the decade. Having transformed the sluggish DVD rental industry, it’s since created its own shows and attracted somewhere in the region of 40 million subscribers. Its success has since inspired a number of media companies to change their business models as well, with Amazon responding with its own ‘Prime’ service.

World Wrestling Entertainment (WWE) are also one of the companies which have looked to change their business model. Instead of relying on hefty pay-per-view fees - which often cost viewers somewhere between $45 and $60 for a single event - a new subscriber model has been incorporated, which sees users pay $10 per month, allowing them full access to all of the entertainment channel’s broadcasts.

Initial feedback on the service was poor, with WWE registering a drop in revenue and a fall in stock valuation. But as time’s progressed, success has slowly come along. More subscribers have joined the service, with Vince McMahon - WWE’s chairman and majority owner - telling investors that web subscribers brought in more capital than pay-per-view customers ever did in a single quarter. This caused the entertainment brand’s shares to surge by 20%, bringing in $5.1 million in profit in the process.

To add to this, Disney’s CEO, Bob Igler, claimed that it was inevitable that ESPN - one of the US’s longstanding sports broadcasters - would eventually look to move away from traditional TV bundles and move to a full-subscription service. ESPN’s contract with the NBA, for example, necessitates that they lay plans to incorporate a video streaming service so that people can watch games online. Moving all its broadcasts to a subscription service would be a bold move, however, although Nielsen data shows that it’s been experiencing a considerable drop off recently. It could be, then, a good time to experiment and move head-on into a subscription based model.

Whether it’s people complaining about internet connection speeds or the lack of picture quality, there will always be those who have their doubts when it comes to online streaming. The success that WWE experienced is a good sign, yet the company’s business model is still in its infancy and needs time to develop before we can truly judge it.

Netflix and Amazon Prime have proved that online streaming can be a viable way of making money. It’s now just up to traditional broadcasters to pluck up the courage to try it out.

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