{"id":4653,"date":"2019-10-31T21:13:01","date_gmt":"2019-10-31T21:13:01","guid":{"rendered":"https:\/\/www.visualon.com\/?p=4653"},"modified":"2019-12-12T18:35:26","modified_gmt":"2019-12-12T18:35:26","slug":"who-will-win-the-d2c-race","status":"publish","type":"post","link":"https:\/\/www.visualon.com\/index.php\/latest-news\/who-will-win-the-d2c-race\/","title":{"rendered":"Who Will Win the Direct-to-Consumer Race?"},"content":{"rendered":"<p><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"background-color: rgba(255,255,255,0);background-position: center center;background-repeat: no-repeat;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;margin-bottom: 0px;margin-top: 0px;border-width: 0px 0px 0px 0px;border-color:#edeef2;border-style:solid;\" ><div class=\"fusion-builder-row fusion-row\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_2_3 2_3 fusion-two-third fusion-column-first\" style=\"width:66.666666666667%;width:calc(66.666666666667% - ( ( 4% ) * 0.66666666666667 ) );margin-right: 4%;margin-top:0px;margin-bottom:0px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><style type=\"text\/css\"><\/style><div class=\"fusion-title title fusion-title-1 fusion-sep-none fusion-title-text fusion-title-size-one\" style=\"margin-top:30px;margin-bottom:31px;\"><h1 class=\"title-heading-left\" style=\"margin:0;\"><p class=\"epi-fontLg bwalignc\"><span style=\"font-size: 24pt;\">Who Will Win the Direct-to-Consumer Race?<\/span><\/p><\/h1><\/div><span class=\" fusion-imageframe imageframe-none imageframe-1 hover-type-none\"><img decoding=\"async\" width=\"800\" image_height=\"600\" image_id=\"4654\" title=\"blog D2C\" src=\"https:\/\/www.visualon.com\/wp-content\/uploads\/2019\/10\/blog-D2C.png\" class=\"img-responsive wp-image-4654\" srcset=\"https:\/\/www.visualon.com\/wp-content\/uploads\/2019\/10\/blog-D2C-200x150.png 200w, https:\/\/www.visualon.com\/wp-content\/uploads\/2019\/10\/blog-D2C-400x300.png 400w, https:\/\/www.visualon.com\/wp-content\/uploads\/2019\/10\/blog-D2C-600x450.png 600w, https:\/\/www.visualon.com\/wp-content\/uploads\/2019\/10\/blog-D2C.png 800w\" sizes=\"(max-width: 970px) 100vw, 800px\" \/><\/span><\/br>\n<\/br><div class=\"fusion-text fusion-text-1\"><p><span style=\"font-weight: 400;\">I had the opportunity to share my thoughts in the recent <\/span><a href=\"https:\/\/view.joomag.com\/sep-oct-euromedia-euro-sep\/0899697001567592658\/p18?short%22The\"><span style=\"font-weight: 400;\">\u201cDirect dealings\u201d article from Euromedia<\/span><\/a><span style=\"font-weight: 400;\"> that looked at how direct-to-consumer (D2C) services are transforming the media and entertainment industry.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Alongside other thought leaders, including Rory McVicar of CenturyLink, Seth Shafter of Kagan, Simon Murray of Digital TV Research, David Sidebottom of Futuresource, Ivan Verbesselt of Nagra, Paolo Pescatore of PP Foresight, and among others, we examined the positive, and potentially negative, effects that D2C services will have on the industry.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Below are some excerpts of my observations from the article. We\u2019d love to hear your thoughts, as this will be an ongoing conversation. <\/span><a href=\"https:\/\/www.visualon.com\/index.php\/contact\/\"><span style=\"font-weight: 400;\">Drop us a line<\/span><\/a><span style=\"font-weight: 400;\"> to let us know where you agree or disagree.<\/span><\/p>\n<p><span style=\"color: #3366ff;\"><b>Q: What are the benefits to broadcasters and studios of adopting a D2C strategy?<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A: The main value of a direct service is owning the customer relationship. D2C service operators will have contact and billing information, allowing for cross selling and access to analytics data to understand user behavior, which can help better inform content development and aid in monetization.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, owning the entire video chain means that security is easier and content owners are incentivized to be diligent about piracy.<\/span><\/p>\n<p><span style=\"color: #3366ff;\"><b>Q: Does the rise of D2C signal the demise of the channel and the pay-TV platform?<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A: D2C is already disrupting traditional pay TV business models \u2013 cord cutting is accelerating. This has led many traditional pay-TV providers to focus on broadband internet, which is a higher margin business than pay-TV, so it&#8217;s not all bad news. Furthermore, as data consumption rises, broadband providers have the opportunity to upsell faster connections and higher data caps.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, customers will reach a saturation level of D2C services, which means there will likely be a need for aggregation. This is the streaming equivalent of cable bundles.<\/span><\/p>\n<p><span style=\"color: #3366ff;\"><b>Q: If premium content fragments across many D2Cs, will viewers be forced into unwanted purchase choices?<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A: Absolutely. There will need for aggregation, as well as ad-based services, rather than subscription. Also, most D2C services have disparate content portfolios. For example, in the case of Warner Media, Turner Sports and CNN have different viewer demographics. Some consumers will want to mix and match content from different providers without subscribing to everything.\u00a0 While content owners may initially refuse to allow this, business models may have to adapt once consumers get \u201csubscription fatigue.\u201d<\/span><\/p>\n<p><span style=\"color: #3366ff;\"><b>Q: How close can a D2C strategy come to realising studios\u2019 \u2018glass to glass\u2019 Holy Grail, where they retain control of the content from production through to customer monetisation?\u00a0<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A: This is the Holy Grail, which is why Disney spent $2.5B to purchase a controlling interest in BAMTech, gave up billions of dollars per year in content licensing and is investing heavily in infrastructure and marketing for Disney+. However, my view is that only a few can survive alone and there will be losers to go with the winners.<\/span><\/p>\n<p><span style=\"color: #3366ff;\"><b>Q: How can content owners balance the subscriber potential of new D2C services compared to existing revenue streams for the same content, with exclusive deals with SVoD operators likely to end?\u00a0<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A: Revenue cannibalization is a given; it will happen. The ARPU in streaming video is lower than traditional pay TV and this will likely disrupt content production. With less revenue, there will be less money to develop content, especially niche or risky (i.e. experimental and innovative) content.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The D2C dream means, by definition, there will be fewer opportunities for third-party services. Netflix saw this coming, which is why they are transitioning to a content company. There may be areas where someone like Apple or Google can aggregate, but SVOD operators, without their own content, will largely suffer.\u00a0<\/span><\/p>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-1 fusion_builder_column_1_3 1_3 fusion-one-third fusion-column-last\" style=\"width:33.333333333333%;width:calc(33.333333333333% - ( ( 4% ) * 0.33333333333333 ) );margin-top:0px;margin-bottom:0px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 50px;\"><\/br>\n<\/br><div class=\"fusion-text fusion-text-2\"><p><span style=\"color: #000000;\">Written by:\u00a0<\/span><\/p>\n<p><span style=\"font-size: 14pt;\">Michael Jones<\/span><br \/>\nSVP and Head of Business Development<\/p>\n<\/div><div class=\"wpforms-container wpforms-container-full\" id=\"wpforms-3707\"><form id=\"wpforms-form-3707\" class=\"wpforms-validate wpforms-form\" data-formid=\"3707\" method=\"post\" enctype=\"multipart\/form-data\" action=\"\/index.php\/wp-json\/wp\/v2\/posts\/4653\" data-token=\"ebe10fa049326fb0235d66fc70b2d9d6\"><noscript class=\"wpforms-error-noscript\">Please enable JavaScript in your browser to complete this form.<\/noscript><div class=\"wpforms-field-container\"><div id=\"wpforms-3707-field_1-container\" class=\"wpforms-field wpforms-field-email\" data-field-id=\"1\"><label class=\"wpforms-field-label\" for=\"wpforms-3707-field_1\">Subscribe to get the latest news <span class=\"wpforms-required-label\">*<\/span><\/label><input type=\"email\" id=\"wpforms-3707-field_1\" class=\"wpforms-field-medium wpforms-field-required\" name=\"wpforms[fields][1]\" placeholder=\"Email Address\" required><\/div><\/div><div class=\"wpforms-field wpforms-field-hp\"><label for=\"wpforms-3707-field-hp\" class=\"wpforms-field-label\">Phone<\/label><input type=\"text\" name=\"wpforms[hp]\" id=\"wpforms-3707-field-hp\" class=\"wpforms-field-medium\"><\/div><div class=\"wpforms-submit-container\" ><input type=\"hidden\" name=\"wpforms[id]\" value=\"3707\"><input type=\"hidden\" name=\"wpforms[author]\" value=\"11\"><button type=\"submit\" name=\"wpforms[submit]\" class=\"wpforms-submit \" id=\"wpforms-submit-3707\" value=\"wpforms-submit\" aria-live=\"assertive\" data-alt-text=\"Sending...\" data-submit-text=\"Subscribe\">Subscribe<\/button><\/div><\/form><\/div>  <!-- .wpforms-container --><div class=\"fusion-clearfix\"><\/div><\/div><\/div><\/div><\/div><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-2 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"background-color: rgba(255,255,255,0);background-position: center center;background-repeat: no-repeat;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;margin-bottom: 0px;margin-top: 0px;border-width: 0px 0px 0px 0px;border-color:#edeef2;border-style:solid;\" ><div class=\"fusion-builder-row fusion-row\"><\/div><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":11,"featured_media":4654,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[63],"tags":[141,135,137,138,140,139,136,91],"class_list":["post-4653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-appletv","tag-d2c","tag-direct-to-consumer","tag-disney","tag-hbomax","tag-netflix","tag-streamingwar","tag-videostreaming"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v15.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Who Will Win the Direct-to-Consumer Race?<\/title>\n<meta name=\"description\" content=\"D2C \u2013 in a sector that loves its initials, will these ones - more even than OTT \u2013 transform broadcasting for ever? 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