Streaming Era’s 2nd Wave: Will ‘Shelter-at-Home’ Orders Give New Services a Leg Up?

The November debuts of Apple TV+ and Disney+ were the first wave of the new streaming era, which is seeing every major media company jostle for superiority in Hollywood’s digital age. The second wave is not far offshore. In the next two months, three new streaming services — Quibi, Peacock and HBO Max — are set to enter an arena that is quickly filling up. With the coronavirus pandemic forcing everyone to stay inside their own homes, there’s arguably never been a more opportune time to give viewers even more content to watch. “I think it’s actually good for most of these streaming companies,” said eMarketer analyst Ross Benes. “If you’re stuck at home, I think more people are going to give them a chance.” The numbers back that up too: Nielsen reported that over the first three weeks of March, the amount of minutes streamed was up 85% compared to last year. “It isn’t a zero-sum game,” Kevin Reilly, chief content officer of HBO Max and president if TNT, TBS and TruTV, told TheWrap. “Research shows that today consumers are willing to subscribe between 4-6 services.” Including the established players Netflix, Hulu, Amazon, as well as the forthcoming beefed up version of CBS All Access, that still leaves around 9 different streamers. Quibi, the mobile-only experiment led by Jeffrey Katzenburg and Meg Whitman, is scheduled to make its debut on Monday. On April 15, NBCUniversal’s advertiser-supported streaming service is slated to become available for Comcast subscribers (ahead of nationwide rollout this summer). Next month, HBO Max is expected to make its long-awaited, and pricey, debut. But while the shutdown of everyday life caused by the global health crisis means that more people are looking for new ways to pass the time, the impact of COVID-19 has affected each of the newcomers in various ways. Quibi, short of “Quick Bites,” was aimed at getting people to watch while they’re on the go — nothing is more than 10 minutes in length. But these days, “on the go” means walking from the living room couch to the bedroom. Quibi was already a risky investment, trying to succeed where other mobile-only services have failed.

Katzenberg told TheWrap back in January that he was taking the long view: “We’re in a marathon, not a sprint. Disney+ is a 100-year brand with the most valued and important generational IP on earth, ever. We’re a different use case, and we don’t have the same brand recognition. So we don’t think we’ll take off like a rocketship. We think it’s something we build over the course of several years.” Quibi certainly has star power. To attract subscribers, Quibi has greenlit shows from a who’s who of A-listers, including: Steven Spielberg, Lorne Michaels, Justin Timberlake, Bill Murray, Reese Witherspoon, Jennifer Lopez, John Travolta, Kris and Kendall Jenner and Stephen Curry, among others. The service plans to launch with more than 50 shows on its app and by the end of the year should have debuted 175 shows. “They have so much more money and name recognition than other mobile services have had,” argues Benes, but adds it may still not be enough: “People aren’t used to paying for short-form video. People watch mobile video for sure, but the biggest mobile platforms tend to be social media.” NBCU’s Peacock, already the least-talked about of the streaming newcomers, has been the most overtly affected by the pandemic. It’s nationwide rollout was scheduled to coincide with the Tokyo Summer Olympics, which would have given it a massive (and free) promotional platform as well as a programming peg. But the Olympics were shelved until next summer, forcing NBCU to re-think its marketing strategy. “They’ll have to rely on their original programming. They’ll have to come in with a whole new plan,” said Alan Wolk, co-founder and lead analyst at TV[R]EV. “That throws a pretty big wrench in it,” adds Benes. “I don’t know how they’re going to pivot their marketing plan for it.” Despite “changing our entire personal and professional rhythms and process,” HBO Max has not been slowed down by having everyone work remotely, Reilly said. “Making the launch date hasn’t really been in jeopardy as all teams have been scaling the business for the last 18+ months.” One analyst argued that HBO Max should be taking advantage of the shelter-in-place orders that many state governors have ordered by moving their launch date up, even if it means an unfinished product. “The shelter-in-place from the pandemic is a once-in-a-lifetime opportunity, where there are no sports on TV and consumers are craving content,” wrote Rich Greenfield of LightShed. “Can you imagine how much ‘Friends’ you would be watching right now if HBO Max was live?” Reilly said that Disney+’s launch “reinforced the value of brand recognition… we’re glad that the brand promise of HBO and history of Warner Brothers is tied to our Max offering.” WarnerMedia (which just named a new CEO in former Hulu chief Jason Kilar on Wednesday) is banking on using HBO’s prestige reputation as the lure for subscribers. HBO Max will cost the same amount as HBO, though the $14.99-a-month price tag still makes it among the most expensive. But that will at least make it more enticing to HBO’s 35 million subscriber-base. The challenge will be convincing those who aren’t already fans of “Game of Thrones” and “Westworld.”

HBO Max’s biggest show available at launch is arguably one that last aired during George W. Bush’s presidency — “Friends,” which the company paid $425 million to steal away from Netflix. HBO Max was eyeing a “Friends” reunion special to help celebrate its launch day, but production on that was halted due to the coronavirus. When it comes to original content, HBO Max will have a “Green Lantern” series from Greg Berlanti, a new “Gossip Girl” and dramas from Kaley Cuoco and Ridley Scott. Peacock meanwhile is going back into its history books with updates to “Punky Brewster” and “Saved by the Bell,” along with an adaptation of Aldous Huxley’s “Brave New World.” But with coronavirus bringing Hollywood productions to a screeching halt, it’s unclear when any of those would be ready for subscribers. In the U.S., Netflix has a 60 million subscriber head start, with more than 160 million around the world. To put that in perspective, Disney+’s first handful of months captured nearly 30 million and was lauded for having such a strong launch. New challengers are coming up with ways to get their product in front of the most people as possible, even if it means forgoing payment. Quibi is offering a 90-day free trial. AT&T is giving its customers who already subscribe to HBO free access to Max. Peacock has a free version. An undefined number of Disney+’s early subscribers got the service for free by being a Verizon customer or at a reduced rate by subscribing to a bundle offer that included Hulu and ESPN+. Apple TV+ gave away the whole store for free for those who actually went into an Apple store and bought a new iPhone, iPad or computer. “There are so many of these bundles, if [people] have 4 or 5 of these streaming services they’re probably only paying directly for 2 or 3 of them,” said Benes. Wolk argues they should go even further and give away their products for the entire month of April. “It would be an incredible PR win for the industry and build a ton of goodwill,” he said. “They could probably convert enough of those people after the fact.” It will be some time before we figure out who are the winners and losers in this new Hollywood gold rush, and the coronavirus pandemic has only added another layer of uncertainty, as many of these streaming services’ owners could find themselves in financial peril. “I think they all will survive. They would have to do something egregiously wrong,” argues Wolk. “If anybody fails it might be Quibi, just because nobody knows what to do with it. The others will all find space somewhere.”