The media consumption wars are heating up.
The big picture: After decades in which media consumption was dominated by domestic TV, we're entering a much more fragmented and international world. Services like Netflix and TikTok (the mobile video clip app that aspires to be the next Netflix) are global in scope and ambition. That sets them apart from forthcoming rival subscription services being planned by Disney, Comcast and AT&T.
- Artificial intelligence has already proved its value with the success of TikTok, which was released internationally in 2017 by the Chinese AI giant ByteDance and has racked up 950 million downloads. The app curates unique individualized content streams by choosing from millions of 15-second videos uploaded by its users, and the effect is mesmerizing — even more addictive than precursors like Twitter.
- Some new platforms will blur the lines between social media, video games and professionally produced video entertainment. The video game Fortnite is a form of social media, for instance, while the forthcoming Quibi video platform is likely to include many interactive elements.
Much of the battle between services will be fought over what executives think of as "intellectual property" and everybody else thinks of as "shows."
- One possible loser: The two most popular shows on Netflix are "Friends" and "The Office." Both are now being pulled from Netflix to anchor new services. "The Office" is going to Comcast's new NBCUniversal platform in 2021 for $500 million, while AT&T's WarnerMedia is paying $425 million to bring "Friends" to HBO Max.
- One possible winner: Disney owns the most valuable franchises in the world, including not only Mickey Mouse and "Toy Story" but also "Star Wars," "Avatar" and the Marvel Cinematic Universe.
- What we don’t know: As analyst and REDEF columnist Matthew Ball notes, none of these services wants to be in the business of "selling individual shows to a given TV watcher from time to time." They want to build brand loyalty in their own right, and it's unclear whether having a well-known anchor tenant will get them there.
The shrinking picture: Netflix and Amazon became giants in this space by delivering unlimited video content on demand, uninterrupted by ads, all for much less than even an HBO subscription, let alone a typical cable-TV bundle. On mobile, however, where games and social-media apps are only a tap away, the most popular and addictive content looks very different and often isn't professionally produced at all.