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June 08
2021

ISSUE

Summer 2021

STREAMING IS RESHAPING GLOBAL ENTERTAINMENT

By CHRIS McGOWAN

The Falcon and the Winter Soldier (Image courtesy of Marvel Studios)

 At the start of 2020, Netflix, Amazon Prime Video and other streamers were already reshaping the movie and television-watching experience. Then came the pandemic. As home entertainment demand soared, movie theaters shut down and film and TV suffered a slump in production. Studios postponed premieres and tinkered with movie release strategies. Streaming services benefited from the increased demand and grew across the board. Due to all the disruptions that followed – either because of or accelerated by COVID-19 – the new decade seems set to become “the Streaming ’20s.” 

HBO Max is one of several streaming success stories. Launched on May 27, 2020 during the pandemic, it has been growing rapidly. HBO and HBO Max together grew from 33.1 million to 44.2 million U.S. subscribers in the twelve months ending on March 31, 2021, according to the firm (HBO consumers and new subscribers are being directed now just to HBO Max.). HBO hopes to further accelerate growth with an ad-supported tier, which launched on June 2.

“So far, HBO Max has exceeded expectations and we have seen some exciting momentum over the last several months. [Last] fall, hits like The Undoing and The Flight Attendant drove record usage on the platform, says Andy Forssell (EVP & General Manager, HBO Max). “We also completed our distribution footprint striking deals with Amazon and Roku, and Wonder Woman 1984 arrived on HBO Max on Christmas Day to record viewing. We’ve grown more subscribers this year [2020] than HBO did over all of the last ten years, so we’re very excited about the enthusiasm we’re seeing and hearing from fans.”

WandaVision (Image courtesy of Marvel Studios)

“We not only launched a streaming platform during the pandemic, but our programming teams under Casey Bloys also created standout content born out of the stay-at-home period, including Selena + Chef and Coastal Elites. Both were developed, produced and shot remotely.” 

—Andy Forssell, Executive Vice President and General Manager, HBO Max 

Netflix continued its remarkable rise in 2020 and dominated Nielsen’s top 10 lists of most-streamed titles, with both old and new titles. The streamer continues to pump out original programming. It will launch 70-plus original movies this year, 10 of them in languages other than English. Netflix added 37 million paid subscribers in 2020, to stand at 203.7 million worldwide at the end of the year, according to the company. 

“If you take the U.S. being our most penetrated market, we’re still under 10% of television viewing time… We’ve got a lot of subscribers here in the U.S., but we still have a lot more viewing time that we would like to earn,” said Reed Hastings, Netflix Co-founder, Chairman, President and Co-CEO, in January’s “Netflix Fourth Quarter Earnings Report.” 

The Walt Disney Company reported that Disney+ had nearly 95 million subscribers worldwide as of its first quarter of 2021, according to research firm Statista, which reports a growth in the service’s subscriber base of almost 70 million since the start of the fiscal year of 2020. The service launched November 12, 2019. Meanwhile, Hulu (controlled by Disney) reached 39.4 million subscribers by year’s end. 

Disney+’s The Mandalorian grabbed the No. 1 spot in Nielsen’s top 10 streaming list for the week of Dec. 14–20, which was the first time that a non-Netflix show had accomplished that feat (the next nine places were taken by Netflix). In the following week, Pixar’s animated film Soul, which skipped theaters and went directly to Disney+, scored the No. 1 spot on Nielsen’s list for December 21-27. 

This didn’t include Wonder Woman 1984, however, as HBO Max wasn’t yet part of Nielsen’s rankings. Nielsen’s list, launched in August of 2020, initially included just content from Netflix, Disney+, Amazon Prime Video and Hulu. It measures minutes watched over the course of a week. For its year-end 2020 tally and subsequent weeks in 2021, Nielsen broke out the top 10 streaming titles in three categories: original series, acquired series and movies (both acquired and original). Disney immediately started gaining ground in the movie category. 

Amazon announced in January that it now has more than 150 million paid Prime members worldwide (Prime members get free shipping on Amazon products as well as access to Prime Video). Amazon’s Sony-produced series The Boys landed at No. 3 in Nielsen’s list of top streaming titles for the week ending Sept. 6. 

The Mandalorian (Image courtesy of Disney)

Luca (Image courtesy of Pixar/Disney) 

Loki (Image courtesy of Marvel Studios and Disney+)

That week, The Boys and Disney’s Mulan (No. 10) were the first titles to break Netflix’s monopoly of the list. Amazon is boosting its spending, and will lay out $1 billion for five seasons of an upcoming Lord of the Rings series. 

NBCUniversal’s Peacock streaming service launched nationally July 15 and has signed up 33 million subscribers, it was reported during the company’s earnings report for the fourth quarter of 2020. Apple TV+ is another growing streaming force. The number of Apple TV+ users will rise from 33.6 million users at the end of 2019 to a projected 40 million for 2020, forecasts Statista. And Paramount+, set to subsume CBS All Access on March 4, offers live news and sports content, plus an expanded library of movies and shows, including on-demand programming from MTV, BET, Comedy Central, CBS and other ViacomCBS channels, and movies from Paramount Pictures. 

Other players and platforms in the streaming mix are YouTube TV, the Roku Channel and set-top devices like Roku, Amazon Fire TV, Apple TV and Google Chromecast, along with Smart TVs. 

This year, some streamers are charging “premium” fees to access certain new films early, while others are offering tiered subscription pricing. Disney+ charged a $29.99 one-time “Premier Access” fee for Mulan last September and Raya and the Last Dragon in March of this year that offered exclusive access to the titles before they became free to regular subscribers.

Peacock will have three tiers for subscribers: a free, ad-supported subscription tier, as well as $4.99 and $9.99 subscription options that are ad-free and offer more content. HBO will offer an ad-supported HBO Max at a cheaper price point, probably by the 2nd quarter, according to AT&T CEO John Stankey during the company’s Q4 earnings report.

Gregory K. Peters, Netflix COO and Chief Product Officer, has a different view about tiers. “We really believe that from a consumer orientation the simplicity of our ad-free, no additional payments, one subscription [is] really powerful and really satisfying to the consumers around the world. And so, we want to keep emphasizing that.”

In December, Warner Bros. shocked the movie industry when it announced it would release all 2021 movies simultaneously in theaters and on HBO Max (Wonder Woman 1984 also launched that way on December 25 in the U.S.). Forssel explains, “This decision was a unique, consumer-focused hybrid distribution model created as a response to the impact of the ongoing pandemic. Films will continue to be released theatrically worldwide, while adding an exclusive one-month access period on HBO Max in the U.S. This model allows the consumer to have choice and the power to decide where and how they want to watch.”

Disney’s Onward was an example of a movie that had its theatrical window shortened early last year because of theater closures – in this case to two weeks. It became available for digital download on March 20, 2020 (and started streaming April 3). On Christmas Day, Soul skipped theaters entirely in the U.S. and debuted on Disney+. Meanwhile, this year, Disney debuted Raya and the Last Dragon March 5 simultaneously in theaters and on Disney+ (for those paying the Premier Access fee), and Loki begins streaming June 9 on Disney+ with the first of six episodes. 

Could Netflix one day regularly release movies simultaneously in theaters and streaming? Ted Sarandos, Netflix Co-CEO and Chief Content Officer, explains that if theatrical windows collapse and Netflix has easier access to showing films in theaters, “I’d love to have consumers be able to make the choice between seeing it out or seeing it at home. There’s a very different experience associated with going out and going to the theater with strangers and seeing a movie, and it’s fantastic. It’s just not core to our business.”

The Boys (Image courtesy of Amazon)

The Queen’s Gambit (Image courtesy of Netflix)

Ultimately, there may be room for a reduced or eliminated window. A study in South Korea that looked at theatrical windows reduced from three months to one month, from 2015 to 2018, showed that theatergoers there largely remained loyal to the theatrical experience, even with the option of viewing at home, according to a January 15 article in the Harvard Business Review.

“It’s not an either/or equation,” states HBO’s Forssell. “There is room for growth and innovation in both mediums, and uncertain times like the period we’re in now create prime conditions for both. At the end of the day, we are a customer-first company. Right now, we have customers who want to experience our films in theaters and customers who want to experience our films in the safety of their own homes.”

A Quiet Place Part II (Image courtesy of Paramount Pictures)

#Alive (Image courtesy of Netflix)

Raya and the Last Dragon (Image courtesy of Disney)

Army of the Dead (Image courtesy of Netflix)

Another change coming may be that we will see far more series produced, since they are often more economical to make and tend to keep audiences glued to the streamer longer than does a movie. Disney’s The Mandalorian is a good example – it cost about $15 million per episode its first season or about $120 million for its initial eight episodes, far less than the budget for many blockbuster films. 

Studios and streamers showed a great ability to change course last year. “We had to address the pandemic head on by being agile and flexible – two qualities that are fundamental to our workplace culture and critical for our success during these unpredictable times,” says Forssell. “We not only launched a streaming platform during the pandemic, but our programming teams under [Chief Content Officer, HBO and HBO Max] Casey Bloys also created standout content born out of the stay-at-home period, including Selena + Chef and Coastal Elites. Both were developed, produced and shot remotely.” 

Hollywood slowly returned to work as feature films, series and network programs resumed production. “The industry has introduced enhanced safety protocols and drastic new measures designed by guilds and unions, along with epidemiologists, to keep incidences of COVID-19 down on sets,” wrote Ahiza García-Hodges on November 20, 2020 for NBC News. 

WandaVision was a series that felt the impact of the shutdown. The production started in November 2019, was suspended from March to September of 2020 and then completed in November. Tara DeMarco, Visual Effects Supervisor for WandaVision, comments: “It’s been a long, strange road working on this show through the entire COVID-19 lockdown. All of the [visual effects] artists and teams have been working from their homes for the entirety of post, and we actually made it work.” Disney+ debuted Marvel Studios’ first two WandaVision episodes on January 15, 2021. 

Such hygienic measures may stay in place for a while, depending on vaccination numbers and new strains, but filmmakers now understand better how to move forward. 

The success of Netflix in the U.S. and overseas with foreign-language programming suggests that any company that hopes to truly compete globally needs to be able to both produce content for a U.S audience and source content from non-English-speaking countries. Netflix says 60% of its subscribers are located outside North America, according to a December 9, 2020 article by Ellen Gamerman in The Wall Street Journal. She adds, “Netflix reports more than doubling its investment in non-English original content over the last two years. The company has gone from commissioning roughly one in five foreign original TV and movie titles to nearly two in five since 2016.” 

For TV series on Netflix, 63% of new first-season originals currently in production or development are being made outside the U.S., according to Gamerman. Netflix currently dubs programming in 34 languages and adds subtitles to even more than that number. 

“[Netflix’s streaming] serves a global audience with incredibly diverse taste. Some of them [movies or series] are hugely impactful in the region that they’re created for, and some of them become very, very global, like we saw with #Alive last year from Korea, which became a very big hit for us around the world.” 

—Ted Sarandos, Co-CEO and Chief Content Officer, Netflix 

Soul (Image courtesy of Pixar/Disney)

Bridgerton (Image courtesy of Netflix)

Space Sweepers (Image courtesy of Netflix)

Wonder Woman 1984 (Image courtesy of Warner Bros. Pictures and HBO Max)

Onward (Image courtesy of Pixar/Disney)

In terms of the internationalization of streaming, Forssell says, “We have been clear about our global ambitions for HBO Max. Streaming services must be global in operation but local in appeal, so that means adding regional programming as well as very tailored marketing efforts that authentically reach audiences in each country. This is top of mind for us as we prepare to launch HBO Max in Latin America in June, and then in Europe later this year.” 

Sarandos thinks that the subscription model inspires consumers to be more adventurous about what they watch. “People say, ‘Hey, I don’t watch foreign language television, but I’ve heard of this show called Lupin, and I’m super excited to see it’… and 10 minutes later, all of a sudden, they like foreign-language television. So it’s a really incredible evolution. 

“[Netflix’s streaming] serves a global audience with incredibly diverse taste,” Sarandos continues. “Some of them [movies or series] are hugely impactful in the region that they’re created for, and some of them become very, very global, like we saw with #Alive last year from Korea, which became a very big hit for us around the world.” 

As the pandemic winds down, the new normal of viewing should favor streamers. Observes Lucas Hilderbrand, Professor of Film and Media Studies and Visual Studies at the University of California, Irvine, in the November 30, 2020 issue of UCI Review: “For decades, well before the coronavirus, there has been a trend toward home viewing. With streaming, that trend accelerated. Now, with the closure of theaters and many people staying home – voluntarily or by public orders – the pandemic has entrenched this. So, viewing habits have already changed in ways that will have long-term effects.” 

Adds Hilderbrand, “We’re witnessing what may be the irreversible turn from cinema being a theatrical mode to becoming a predominantly streaming medium.” 

Ultimately, believes Forssell, “The customer will decide what the future looks like.” 


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