Scale and reach
S08E01: Game of Streams (Scale and reach)
Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you do not want to miss an episode.
When WWE launched a 24/7 streaming service in February 2014 it was one of the pioneers going direct to consumer. The service reached one million subscribers in less than one year of its launch.
In a major shift in strategy, WWE announced in January 2021 that it had sold the distribution rights of the WWE Network to NBCUniversal Television and the Peacock streaming service. By that time WWE had an average paid subscriber base of 1.6 million.
After WWE’s move to Peacock, the viewing figures for WWE content experienced a significant increase. According to WWE President Nick Khan, the pay-per-view viewership on Peacock showed notable growth compared to the previous year. Data provided by Peacock to WWE showed that over 3.5 million fully paid Peacock subscribers watched WWE content since they moved over in March 2021
Just recently, a deal was struck between Netflix and WWE, where Netflix would become the exclusive home of WWE’s flagship weekly wrestling program, Raw, starting in January 2025. This 10-year deal, valued at more than $5 billion, marked another step for WWE from its D2C streaming approach, through NBCUniversal and Peacock to now partnering with the leading global streaming service.
Scale and reach
This is yet another sign that scale and reach are important. And Netflix can provide that. In the last earnings report (Q4 2023) Netflix reported that they added 13.1M paid subscribers to a global total of 260.2M.
The advertising tier now accounts for 40% of all Netflix sign-ups in their ad markets and as Netflix looking to retire its Basic plan in some of its ad countries, starting with Canada and the UK, it says that the advertising tier is profitable. It hints that scale and reach are important also for advertisers.
This is also something that Amazon Prime Video can offer, when they now introduce advertisements into its service in the U.S., U.K., Germany, and Canada, with plans to expand this to France, Italy, Spain, Mexico, and Australia later in the year.
The introduction of advertising on Amazon Prime Video is expected to generate significant revenue and represent a significant portion of the global television advertising market (still constitutes a relatively small portion of the overall digital advertising market).
User-centric curation for viewers and advertisers
These latest deals and introductions present a significant challenge to traditional broadcasters. Amazon’s vast resources and data-driven approach to advertising make it a very strong competitor, reshaping the streaming market by implementing “shoppable ads” that direct viewers to its e-commerce platform, attracting major brands and their agencies to invest in Prime Video.
So, for local broadcasters that don’t have the scale and reach of Netflix and Amazon Prime Video, it is important to find their competitive edge. This can be done by cooperation among broadcasters, streamlining production and distribution, and focusing on local content. It is also important to keep up with new ad formats such as “shoppable ads” to attract advertisers.
Broadcasters have their strength in curation of content, and they need to utilize this with new technologies to provide user-centric curation both for the viewers and the advertisers. Curate local content and put the user in focus.
To watch out for the coming months…
The month of January has passed, and the television and video industry are as dynamic as ever. Talks of mergers and acquisitions both on a global level and on a more local level intensify. Cost saving measures continue in order to stay competitive and meet the market expectations. Or to quote Steve Jobs, “The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament.”
Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.
Follow me on LinkedIn and X (@svensson00) for regular updates and news.
