Streaming Wars: Formula 1, Falcon & Winter Soldier, The Snyder Cut
Buy the rumor, sell the news
F1 released its latest season of Drive to Survive on Netflix today:
Disney released its follow up to WandaVision, Falcon & the Winter Soldier, as well:
And, of course, yesterday, Warner Bros released the Snyder Cut:
The Streaming Wars are here, and they’re only going to get more intense. Hollywood has always competed for audience’s attention. But they face competitive threats from gaming, sports, social media, and the integration of all three of those things. Hollywood spends billions of dollars a year on producing and selling entertainment for your enjoyment, but you have the same amount of hours every year. You are spoiled for choice.
Whenever a business is faced with a relatively static audience, it has two choices: adapt the business model for slower growth, or go overseas to drum up more business. The NBA famously went to China in the early ‘90s when they realized that Michael Jordan and company had tapped out American demand for basketball sneakers. The Chinese proved to be ready, willing, and able to step into the breach, and two decades later, Yao Ming emerged.
Hollywood, too, has turned to China. And China has returned the favor.
The Wandering Earth has not proven to be as popular in the United States as Hollywood offerings have proven to be in China, but that could well change over time. IMDB’s ratings are a pretty good proxy for what mainstream America thinks of any given movie, and IMDB rates The Wandering Earth a 6.0. I’m not sure what the distribution of movie ratings is, but it’s probably not normal. So it’s hard to say where in the distribution a 6 out of 10 falls. But I’m also not sure that this really matters.
What does matter is this: there is an abundance of entertainment choice, and the numbers behind streaming’s growth bear consideration. Grand View Research, a market research firm, notes:
The global video streaming market size was valued at USD 50.11 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 21.0% from 2021 to 2028. Innovations, such as blockchain technology and artificial intelligence, to improve video quality are expected to boost the market growth.
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Moreover, the rapid adoption of mobile phones owing to the growing popularity of social media platforms and other digital mediums for branding and marketing is anticipated to fuel further growth.
Statista reports a different set of statistics, some of which conflict with those reported by Grand View Research, above.
Revenue in the Video Streaming (SVoD) segment is projected to reach US$71,237m in 2021.
Revenue is expected to show an annual growth rate (CAGR 2021-2025) of 11.04%, resulting in a projected market volume of US$108,306m by 2025.
User penetration will be 14.3% in 2021 and is expected to hit 18.2% by 2025.
The average revenue per user (ARPU) is expected to amount to US$66.29.
In global comparison, most revenue will be generated in the United States (US$32,082m in 2021).
Quibi’s ignominious failure notwithstanding, the Streaming Wars are here. Now, if you’ll excuse me, I have to go catch up on The Falcon and The Winter Soldier.