Streaming entertainment is replacing linear TV
People love movies and TV shows, but they don’t love the linear TV experience, where channels present programs only at particular times on non-portable screens with complicated remote controls. Now streaming entertainment – which is on-demand, personalized, and available on any screen – is replacing linear TV.
Changes of this magnitude are rare. Radio was the dominant home entertainment media for nearly 50 years until linear TV took over in the 1950’s and 1960’s. Linear video in the home was a huge advance over radio, and very large firms emerged to meet consumer desires over the last 60 years. The new era of streaming entertainment, which began in the mid – 2000’s, is likely to be very big and enduring also, given the flexibility and ubiquity of the internet around the world. We hope to continue being one of the leading firms of creation and streaming in the entertainment era.
Streaming Entertainment Apps
The world’s leading linear TV networks now offer their programming on-demand through apps that run on phones and smart TVs. These apps, such as HBO Max, Paramount+, and BBC iPlayer enable binge viewing and catch-up viewing. Existing linear networks that offer compelling internet apps will generate more viewing and become more valuable. Those networks that fail to develop first-class apps will lose viewing and revenue.
Streaming entertainment is expanding rapidly because of:
- Ecosystem Growth: The internet is getting faster and more reliable, while penetration of connected devices, like smart TVs and smart phones is also rising
- Freedom and Flexibility: Consumers can watch content on demand, on any screen, and the experience is personalized to individual tastes
- Rapid Innovation: streaming entertainment apps have frequent improvement updates and streaming is the primary source of UHD 4K video content.
Content People Love
People’s tastes are very broad, even in a single market. The internet allows us to offer a wide variety, and to have our user interface quickly learn and make recommendations based upon individual users’ tastes.
We’ve been at a scale where we can economically create original content and our offering has improved as we grow further and gain greater confidence. With each original, we learn more about what our members want, about how to produce and promote effectively, and about the positive impact of originals on our brand.
We believe we have a major advantage over our linear competitors when it comes to launching a series or a film. Linear networks need to attract an audience on a given night at a given time and movie theaters need to maximize attendance for a finite number of screens. We can be much more flexible. Because each show is not competing for scarce prime-time slots like on linear TV, a show that is taking a long time to find its audience is one we can keep nurturing. This allows us to prudently commit to a whole season, rather than just a pilot episode. In addition, we are able to provide a home for more creative storytelling (varying run times per episode based on storyline, no need for week-to-week recaps, no fixed notion of what constitutes a “season”). We believe this makes it easier for us to attract creative talent.
By personalizing promotion of the right content to the right member, we have a large opportunity to promote our original content, one that’s effectively unlimited in duration. Long after the premieres.
We are making great headway, which is a rapidly growing proportion of our spending. Any linear network would be proud to show them. Our success is due in part to great creative execution as well as the power of on-demand service.
Focus
A global media entertainment service offering movies to be made, TV series and games to advance growth, with unlimited viewing on any internet-connected screen for affordably, with no-commitment monthly fee. The Company is a focused passion brand, not a do – everything brand.
We are not a generic “video” company that streams all types of video such as news, user-generated, live sports, and music videos. We are a movie, TV series and game development entertainment asset based business.
We are a relief from the complexity and frustration that embody most MVPD relationships with their customers. We strive to be extremely straightforward. There is no better example of this than our no-hassle online cancellation. Members can leave when they want and come back when they want.
We are about the freedom of on-demand and the fun of binge viewing. We are about the flexibility of any screen at any time. We are about a personal experience that finds for each person the most pleasing experiences from talent around the globe.
Competition
* Although not truly in competition with anyone. We do compete for a share of time and spending for relaxation and stimulation, against linear networks, pay-per-view content, DVD watching, other internet networks, video gaming, web browsing, magazine reading, video piracy, and much more. Over the coming years, most of these forms of entertainment will improve.
If you think of your own behavior any evening or weekend in the last month when you did not watch programing, you will understand how broad and vigorous our competition is.
We strive to win more of our “moments of truth”. Those decision points are, say, at 7:15 pm when you want to relax, enjoy a shared experience with friends and family, or is bored. The individual could choose #HAPPYLANDStation TV – A Stage of Mind© TM, or a multitude of other options.
Because the entertainment market is so broad, multiple firms can be successful. For example, ABC and NBC have historically competed for viewers, attention and content but have also successfully co-existed for many decades. Similarly, in the streaming entertainment world, HBO is now growing faster than in years past, while our business is also expanding. The transition to streaming entertainment, with its greater consumer satisfaction, will mean growth for many services.
Margin structure
Our operating margin structure is set mostly top down. For any given future period, we estimate revenue, and decide what we want to spend, and how much margin we want in that period. Competitive pressures in bidding for content would lead us to have slightly less content than we would otherwise, rather than overspending. The same is true for our marketing budget. With our rapid increase in content spending, and our growing emphasis on owned original productions. We amortize content as quickly as justified, given industry norms and viewing history.
Global
We are available virtually everywhere except in China, Russia, and the Ukraine. Our growth internationally will unfold over many years as we improve our service. We started by primarily targeting outward – looking, affluent consumers with international credit cards and smartphones. As with every market we’ve launched, our approach is to listen, learn and improve rapidly, adding more content, languages and a better experiences over time to delight viewers.
We understand that awareness of in these new markets is mixed and that there are cultural differences and some variances in content tastes around the world. There are also challenges with the broadband and payment infrastructures in certain countries. But we also believe in the growing ubiquity of the internet and rapid technological progress and that great, high-quality storytelling has universal appeal that transcends borders.
That’s why we are increasingly licensing and producing content all across the globe and everywhere in the world can increasingly enjoy the same movies and TV series at the same time, free of legacy business models and outdated restrictions. In addition, we are developing a growing number of non-English language originals from places such as Mexico, France, Italy, Japan and Brazil, to name just a few. With our global distribution well positioned to bring engaging stories from many cultures to people all across the globe.
As we expands globally, we understand that consumers and governments’ expectations will rise. We expect to meet those expectations and work with policymakers to ensure that the old policies that applied to linear TV are not reflexively applied to our streaming entertainment.
Respectfully,
William D. Armijo
Willafter LLC.
Media Solutions
Newport Beach, Ca.