With a number of direct-to-consumer (DTC) services set to hit the US during 2019, their success will largely depend upon how well they deploy initially rather than on untapped consumer demand according to a report by MIDiA Research.
The Direct to Consumer Big Bang Moment for Video report takes a closer look at how the big three services launching in 2019 — Disney+, Apple TV+ and the as-yet-unnamed Warner Media service —will fare in the current US domestic streaming market before their staggered international rollout.
The research notes that each new player has very different strategic motivations for going direct, as well as significantly different attributes which they can bring to bear.
MIDiA regards Disney’s nascent streaming service as a key part of the media giant’s international brand equity play and that its launch will come to define what DTC success means for the company. It adds that Apple will benefit from the network effect of combining content into a wider ecosystem engagement strategy in a way that Amazon currently benefits from, marking fruition of its desire to pivot into services, having peaked in smartphone shipments at the end of 2018. Interestingly, MIDiA observed that Apple+ does not have to be intrinsically revenue positive.
The forthcoming Warner Media service is described as likely to be a formidable full-stack competitor, offering ecosystem-wide integration opportunities for parent company AT&T, from both customer acquisition and retention perspectives as well as a synergetic ad deployment aspect. Yet the Direct to Consumer Big Bang Moment for Video reportDirect to Consumer Big Bang Moment for Video report notes that for Warner Media, the key challenge will be the potential brand impact of creating non-aligned brands (HBO, Warner Bros, Turner Networks) and the potential brand equity dilution of having all the assets on the same service.
The research notes that each new player has very different strategic motivations for going direct, as well as significantly different attributes which they can bring to bear.
MIDiA regards Disney’s nascent streaming service as a key part of the media giant’s international brand equity play and that its launch will come to define what DTC success means for the company. It adds that Apple will benefit from the network effect of combining content into a wider ecosystem engagement strategy in a way that Amazon currently benefits from, marking fruition of its desire to pivot into services, having peaked in smartphone shipments at the end of 2018. Interestingly, MIDiA observed that Apple+ does not have to be intrinsically revenue positive.
The forthcoming Warner Media service is described as likely to be a formidable full-stack competitor, offering ecosystem-wide integration opportunities for parent company AT&T, from both customer acquisition and retention perspectives as well as a synergetic ad deployment aspect. Yet the Direct to Consumer Big Bang Moment for Video reportDirect to Consumer Big Bang Moment for Video report notes that for Warner Media, the key challenge will be the potential brand impact of creating non-aligned brands (HBO, Warner Bros, Turner Networks) and the potential brand equity dilution of having all the assets on the same service.
