A major consolidation of America’s streaming video services market occurred on March 18, but most people probably did not notice.
World Wrestling Entertainment (WWE) and NBCUniversal selected that date to begin moving the former’s content to the latter’s new platform, Peacock. The deal offers huge benefits for the two corporations but presents headaches for over a million consumers.
Why? Because WWE is closing the United States version of its subscription video-on-demand (SVOD) service – the WWE Network – on April 5. In addition, Peacock’s absorption of the WWE’s media does not include account migration. That means over 1.1 million U.S.-based WWE fans will have to subscribe to a new platform to continue accessing exclusive content from the world’s top pro wrestling promotion.
WWE Network is a niche platform, so its closure will not affect a lot of people. But the factors that led to its U.S. exit are going to affect other, more popular SVODs. And as with the WWE-NBCUniversal agreement, consumers stand to lose out as the streaming video space inevitably becomes more consolidated.
Why the WWE Network-NBCUniversal Deal is Not Ideal for Consumers
In fairness, WWE has been proactive about providing solutions for U.S. WWE Network subscribers. The corporation created an FAQ that provides many answers about the changeover, and it is compensating users who prepaid for its SVOD. It is also offering a very generous discount promotion to motivate its fans to make the switch.
Plus, there is no price difference between the WWE Network and Peacock’s ad-free tier.
But the wrestling company cannot help people who want to watch its programming on their Amazon Fire or Samsung TVs. The Peacock app is not available on those devices because their parent companies have not made arrangements with NBCUniversal.
The corporation cannot do much for people who liked WWE Network’s user interface, search functionality, or content makers. The SVOD’s signature features are not making the move to Peacock, neither is the majority of WWE’s back catalog, like older episodes of its TV shows and classic pay-per-views, at least not right away.
NBCUniversal told The Verge all of the WWE’s video content would come to Peacock this summer. But in the meantime, U.S. consumers will lose a platform they like and be forced onto a new one with less content to keep up with their hobby.
Given the state of the SVOD landscape, the problems WWE Network subscribers are dealing with could soon be more widespread.
It Is All About Content
WWE decided to wind down its SVOD in its primary market because the platform was not growing. After seven years, it only attracted 1.6 million users worldwide. Rather than watch its service stagnate, the corporation is licensing its content to NBCUniversal for a reported $200 million per year for the next five years.
Since the U.S streaming video sphere features many underperforming U.S.-based services, more consolidation is inevitable.
In the late 2000s, Hulu and Netflix dominated what was then an emerging sector. But the societal embrace of digital content made the latter provider a big enough player in the wider media industry to displace broadcast television. The SVOD’s success inspired Disney, WarnerMedia, NBCUniversal, Apple, Paramount, WWE, and other providers to launch their own platforms. As the field became more crowded, the competing services drove up the value of classic movies and TV shows.
The streaming wars created intense demand for media that made recognizable but niche content like WWE programming worth $1 billion.
The market competition also pushed companies to invest in material unsuitable for typical films and TV distribution channels.
For instance, Apple TV+’s “Dickenson” probably would not have been greenlit by a more established service. Its anarchic examination of societal norms, art, and ambition is too intimate and idiomatic to be broadly appealing. But Apple was willing to give it a chance because it has no set brand identity as a video producer.
But the field’s consolidation will leave less space for long bets like “Dickenson.”
Only the Strong Survive
The coronavirus pandemic and its attendant lockdowns cemented some SVODs as a crucial part of the entertainment landscape.
This year, Netflix reached 200 million subscribers worldwide, and Disney+ crossed the 100 million-member mark. Warner’s HBO Max is on pace to pull in 67 million to 70 million paying customers by year’s end. However, the paradigm shift that boosted those platforms did not drive the growth of every streaming service.
As an example, COVID-19 did not help the WWE Network go mainstream last year. Going forward, its programming will help grow Peacock beyond its current user base of 33 million people.
The global health crisis also could make the heavily prompted and well-funded Quibi appealing to viewers. It folded six months after its launch, and Roku snapped up its library for its SVOD, which reaches 61.8 million people. The owners of those services licensed their content once they realized it had more value than its distribution system.
Yahoo! made a similar determination years ago when it shut down its Yahoo! Screen service after losing $42 million on the project.
There is strong demand for video content in the United States. But smaller platforms cannot establish themselves in a space where a few expansion-hungry giants hold dominion. For consumers, that is bad news on several fronts. The sector’s consolidation means its biggest players will have less incentive to prioritize user interface quality and pricing accessibility. It also means fewer difficult to quantify projects will be funded.
For both economic and entertainment reasons, the U.S. video streaming service market’s consolidation is a negative development for consumers.