An examination of the top multichannel distributors' TV Everywhere catalogs compared to their online subscription rivals underscores a high level of exclusivity versus aggregators Amazon.com Inc.'s Amazon Prime and Netflix Inc.But the overlap with Hulu LLC, a platform co-owned by high-profile programmers, remains significant. Time Warner Inc.'s interest in buying into the popular streaming platform could change these dynamics.
Analyzing the expansive list of unique movies at the end of January indicates that, on average, roughly 81% of the operator group's movie catalog was not available on Amazon Prime; 76% was not available on Hulu. The exclusivity is even greater in relation to Netflix, at 92%.
On the TV series side, our analysis reveals varying degrees of average overlap between unique titles — each TV show is counted once, regardless on the number of episodes offered — and the top three OTT platforms. Only 0.5% of our group's catalog can be found in the Amazon Prime library. This figure jumps to 8.6% when looking at Netflix; it skyrockets to nearly 34% when performing the analysis with Hulu.This is to be expected, however, given Hulu's relationship with major TV networks (Hulu is co-owned by Walt Disney Co., Comcast/NBCUniversal Media LLC and 21st Century Fox Inc.)
Hulu's primary value proposition — and what sets it apart from Netflix — revolves around offering episodes of current seasons of TV shows, with the bulk of them becoming available on a next-day basis. This could soon change, however, as Time Warner Inc., which is contemplating acquiring a 25% stake in the OTT service, believes the model does more harm than good to the content's owners. Hulu's appeal with consumers could quickly turn, were other programmers to follow suit.Such a shift would put the depth of the top MVPDs' TV Everywhere libraries in perspective, potentially reinvigorating the value of a multichannel video subscription at a time when TV Everywhere services are gaining traction.
In the last few years, popular OTT aggregators have contributed to cord-cutting/shaving, eroding the multichannel subscriber base to which programmers, broadcasters and cable nets alike, can charge retrans and licensing fees. On the multichannel front, it has put distributors between a rock and hard place. MSOs, telcos and DBS operators have had to contend with declining video subscribers while paying quickly rising programming expenses for content with elusive exclusivity.
But the growing number of programmers jumping on the direct-to-consumer bandwagon is changing the historical relationship between content providers and multichannel distributors, particularly leverage at the negotiation table. That said, no significant reduction in programming costs appears to be in sight. While the proliferation of direct-to-consumer services such as Time Warner's HBO NOW or CBS Corp.'s CBS All Access in theory provides more negotiating leverage, it is counterbalanced by MVPDs' desire to increase their multiscreen footprint — a strategy that entails additional content fees.