Excerpts from an article by Janko Roettgers in Variety
Parks Associates estimates that there are now close to 100 video subscription services in the U.S. and Canada. Barely a week goes by without a network or a studio announcing the launch of another subscription service, with many betting on niche programming to establish themselves next to giants like Netflix. But do consumers really want that many standalone services? Or are we about to reach peak niche, with inevitable consolidation ahead?
Ellation CEO Tom Pickett believes that we haven’t seen the end of the niche subscription video boom yet. “We will see even more services launch,” he says, while also cautioning: “Not everyone will be successful. Some will struggle.”
Pickett’s Ellation is the subscription video arm of Otter Media, the joint venture between AT&T and the Chernin Group that’s all about monetizing the niche with paid services. Ellation’s Crunchyroll is leading the charge in this space with more than one million subscribers, which pay around $7 a month for ad-free access to anime shows, including some that aired on Japanese television the day before they debut on the service.
One of the key questions for niche players is how many services consumers are really willing to subscribe to at any given time — a question that also has implications for the ongoing discussion around cord cutting and unbundling. “If you don’t subscribe to cable, there is quite a big amount of money on the table,” believes Pickett.
He’s getting support for this argument from BTIG analyst Rich Greenfield, who has long been touting the end of the traditional TV bundle. “If you end up not spending $80 on live TV, it frees up a lot of meaningful wallet share to spend,” Greenfield believes. “There are lots of opportunities for new services to exist.”
Read the full article on Variety. And check out our interview with Crunchyroll’s Marketing Lead Reid DeRamus.