M&E Journal: Servicing D2C Services

By Chris Tribbey, Editorial Director, MESA –

During April’s NAB Show in Las Vegas, members of the Media & Entertainment Services Alliance (MESA) spent plenty of time discussing the needs behind content owners’ new direct-to-consumer (D2C) offerings, and for good reason: Disney’s investor day during the week of NAB was going to be full of long-awaited details around Disney+, the most ambitious D2C endeavor to date.

Launching Nov. 12, Disney+ will have a $6.99 price point, offer titles from Pixar, Marvel, Star Wars and National Geographic; newly acquired Fox properties including The Simpsons and Malcolm in the Middle; and new original series. All told, more than 7,500 television episodes and 500 films will be available at launch.

This will be the third D2C move by Disney (after Hulu and ESPN+), and the sheer amount of exclusive content Disney has to throw at it — along with the low initial subscriber fee — points to it being a success. But what about others thinking about D2C?

What are the main concerns going in?

“How do you prepare a catalog of content that’s differentiated from everyone else? There’s an expectation that it has to be ready on day one,” said one executive with a video distribution and creation provider. Original content means both initial and ongoing investments. Another basic fundamental pain point, one media asset management (MAM) system service provider said, was the need within D2C content companies for better scale and capacity, which means more automation in workflows. A D2C service will need to determine windowing, devices, region usage, formats, exclusivity and more, and do it quickly with the right rights management systems, they said.

One OTT solutions provider added that going D2C requires a sizeable number of subscribers in order to remain viable. If you begin charging too much, subscriber churn becomes a problem, they added. CBS All Access ($5.99 a month), ESPN+ ($4.99 a month) and Hulu (as low as $5.99 a month) have all done just that and survived (and thrived).

And just because you’ve gone D2C doesn’t mean you aren’t just as susceptible to the piracy pains live TV and theatrical releases experience. Anyone with a cell phone can steal your stuff, one cybersecurity and anti-piracy specialist noted. That’s where aggressive watermarking techniques can come in handy, experts said.

Additionally, if you’re intent on bringing your content D2C, search and discovery has also become a crucial component, according to one artificial intelligence and machine learning tech provider. Content owners are still struggling with how to repurpose their content and allow viewers to find what they want (and anticipate what they want). Hyper-personalization of content platforms could be the key to keeping subscribers from jumping ship.

Competition for cord-cutters

David Sidebottom, principal analyst with Futuresource Consulting, wrote that Disney+ and WarnerMedia’s announced D2C offerings will both “shape the SVOD landscape in the USA and, in the longer term, worldwide,” and that if either service is to be successful, low prices, high-quality original content and ease of functionality will all be crucial components.

It’s really starting to get crowded out there. NBCUniversal is out with its own D2C offering in early 2020. Apple TV+ will beat them to it with a launch by the end of this year. Amazon has already fired a shot across the bows of Netflix and Hulu with its ad-supported IMDb Freedive streaming service (movies and TV shows).

Consumers began cord-cutting and moved to streaming to get away from the all-or-nothing world of cable and satellite. But with more and more services appearing to appeal to those cord-cutters, the winners — especially the D2C players — will be determined not just on price, and not just on content, but how well they deliver what they offer to the living room, and wherever else consumers want to watch.


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