How else could you spend your TV Licence fee? (from SVODs to AVODs, a look at the current OTT market)
The BARB UK Television Landscape Report found that the proportion of UK homes with a subscription to at least one of Netflix, Amazon Prime Video or Now TV passed 50% for the first time in Q4 2019 (14.27 million, 50.5% of homes) with 21% (6.03 million) of homes subscribing to two or more over-the-top (OTT) services.
With more and more of the UK public seemingly willing to pay for content, this has been cited as support for the suggestion to scrap the TV Licence fee and move the BBC to a subscription model during a period where it finds itself under scrutiny from both sides of the political divide and with a government seemingly intent on “pruning back” its activities.
So, we take a look at what your £12.88 per month (£154.50 pa, including those over 75 from the 1st June) would get you elsewhere as the major entertainment groups launch their new subscription services.
The services can be classified by four main acronyms, although many now spread across more than one of these categories:
- SVOD – Subscription Video-On-Demand – users pay a fee to access the content (usually monthly or annually) and these services are often ad free, but some do now supplement the subscription with ads;
- AVOD – Ad-supported Video-On-Demand – rather than paying a fee to access the content, ads are shown to users between the content. Usually free but sometimes also combined with a subscription;
- TVOD – Transactional Video-On-Demand – users pay a fee for each title they watch, with some services giving users digital ownership of that content;
vMVPD – Virtual Multichannel Video Programming Distributor – these services act much like a traditional cable or satellite package, offering users access to a number of live channels (free and paid) with most also offering on-demand content.
We start with the three that have the highest existing subscriber numbers (and hence feature in the BARB report):
Pricing: £5.99/£8.99/£11.99pm (SD/HD/Ultra HD + 1/2/4 simultaneous devices)
The best known of the streamers, now in over 12 million UK homes, and one which has cited sleep as its biggest competitor. With some of the major entertainment groups pulling their flagship content from the service (like Friends and The Office), there was concern that this may hurt Netflix but the numerous Oscar nominations this year suggests that the quality of its own content will attract subscribers on its own. Netflix has also taken control of its supply chain, establishing its own production hub to reduce content costs, guarantee ever scarcer production resources and reliance on producers that may now be under the control of the other entertainment groups with their own competing services.
Amazon Prime Video
Pricing: £7.99pm (reduced to £6.58 equivalent if paying annually in advance) including free next day delivery, Amazon Prime Music and free eBooks
Many will see this as a free service given it is bundled into the Amazon Prime membership required to get free next day delivery, as a result it is now in 7 million UK homes. Amazon has its own Original content alongside a huge library of other content (the largest when including additional paid content). It has also been moving into live sport, acquiring the rights to most of the ATP and WTA tennis tournaments and twenty Premier League football games. Users can also add subscriptions to third-party networks and streaming channels, offering a similar service to satellite and cable providers whilst only paying for the channels they want.
Pricing: £8.99pm (Entertainment Pass) + £11.99 (Cinema Pass) + £3.99 (Kids Pass) + £3 pm for Boost (HD, multiple devices)
Sky’s streaming service for those who want access to most of the premium content but without a long term commitment. This has proved popular and it is now in just under 2 million homes. Channels are bundled together and sold as a ‘Pass’ focusing on specific types of content. Much like a Sky satellite package, the price looks significantly higher than other providers but bundles with broadband and phone can make the cost much more competitive than it first appears.
These three are being joined by:
Pricing: £4.99pm (currently 1 year free when you buy various Apple products)
Launched in November 2019, and accessible via the Apple TV app, this is the home for Apple original TV and films. The offering is still fairly limited given it is only for original content, but the app allows you to Buy, Rent and Watch content from the iTunes store as well as consolidating other services into one place – Amazon Prime Video, BBC iPlayer, ITV Hub, All4, My5, MUBI.
Pricing: £5.99pm (6 months free through EE contracts)
Launched in the UK in November 2019, two years after the US launch, BritBox is focused on British TV series and films from the main UK Public Service Broadcaster’s (PSB’s) – BBC, ITV, Channel 4 and Channel 5. The service does not have access to their current or recently aired content (at least at the moment) but once the initial viewing window ends on those broadcasters catch up services, programmes will move to BritBox and no TV licence is required to watch. There will be exclusives and Film4 content will appear later this year.
Pricing: £5.99pm (reduced to £5.00pm equivalent if paying annually in advance, with a special offer equivalent to £4.17pm if you sign up ahead of the launch)
Launching on 24th March in the UK, nearly 5 months after the US, in which time it has amassed 28 million subscribers. UK viewers will finally get to watch the Mandalorian legally along with Disney’s back catalogue and content from the Marvel and Star Wars franchises, Pixar, Fox and National Geographic. Disney has been quietly pulling its content from Sky and the service is likely to be a favourite for families so looks set to shake up the BARB list.
If none of those are to your taste, you could also look to:
Pricing: Free (entirely ad supported)
Part of ViacomCBS following Viacom’s acquisition of the service in 2019 ahead of the CBS and Viacom merger later that year. Pluto offers a diverse line-up of live TV channels along with a selection of VOD films and TV box sets but lacks a download function.
Pricing: Roku Channel – Free (ad supported), Roku – Free
The Roku Channel is a free ad supported channel but Roku also acts as a vMVPD through Roku streaming devices (RRP £29.99 upwards) with a wide range of live tv channels (both free and pay), including those from the UK PSB’s as well as their catch up services. Users can also pay to watch Netflix, Amazon Prime Video, Apple TV+, NOW TV, Rakuten TV, and purchase content from the Sky Store and Google Play through the service.
Pricing: Free / £6.99pm
Users can get a free basic subscription giving access to free to air channels, including those from the PSB’s along with a Premium subscription which gives access to a number of premium channels, which include the Discovery and History channels, along with catch-up and on-demand.
Pricing: Free (ad supported)
Born from the 2012 acquisition by Rakuten (one of the world's largest e-commerce companies, which also owns Viber, Viki, Lyft and the website formerly known as Play.com) of Wuaki.tv, subsequently changing its name in 2017. It also took over the user base from TalkTalk TV Store (previously Blinkbox) in 2018. The service provides free ad supported content along with pay VOD from a wide range of the large studios along with HBO TV series.
Pricing: £9.99pm/£14.99pm with one hand-picked cinema ticket per week
Mubi started as a social network for cinephiles and shows a continually rotating line-up of thirty curated films at once, with one joining and one leaving every day. This model allows content costs to be more constrained than other services given it requires just 365 films per year to operate. A niche offering with handpicked content that you won’t find elsewhere and a dedicated following.
BFI Player Plus
Having launched in the UK in 2013, The British Film Institute’s streaming service launched in the US in 2019. The subscription gives you access to classic and cult films on demand, and there is also free access to a huge archive of shorts and features from the BFI national and regional archives along with the option to rent new (sometimes concurrently with the cinema release) and acclaimed films which you may not find elsewhere.
Pricing: Free (ad supported) / Basic £2.79pm (£2.33pm if paying annually in advance) / Standard £3.99pm (£3.33pm if paying annually in advance)
Another Rakuten owned service following its acquisition in 2013, this one offers global Film and TV series, primarily East Asian content from Korea, China, Taiwan and Japan) which are subtitled into up to two hundred languages. The subtitling is done by a community of volunteers globally (“fansubbers”), with the top contributors getting rewards of branded clothing and accessories. Not just an entertainment investment for Rakuten since it also gave it access to translation software with a large collection of data to use for its e-commerce and other services.
Pricing: Free (ad supported) or £4.99pm with no adverts (£4.17pm if paying annually in advance)
A majority Sony owned service which specialises in anime. This mixes a free ad supported service with a pay service that removes adverts and allows multiple streams and downloads. It had previously partnered with Crunchyroll, with both services sharing content until 2019 when Funimation terminated the partnership.
Pricing: Free (ad supported) / £6.50pm (£5.41pm if paying annually in advance)
A specialist service which focuses on anime, manga and dorama (Japanese TV drama that is often aired daily). It is owned by AT&T’s WarnerMedia so expected to share content with their upcoming HBO Max service.
A service that offers reality TV on demand, giving subscribers access to US content the same day it airs in the US. Owned by NBCUniversal, it is currently unclear whether this will be incorporated into Peacock if that service launches internationally.
Owned by Lionsgate, this service recently launched as a standalone service in the UK (previously available through Amazon) offering Starz cable content and has also acquired the exclusive rights to DC Universe’s Doom Patrol in the UK.
The other UK Public Service Broadcasters have also started incorporating a subscription model into their strategies, providing catch up services along with OTT delivery of their channels live (but if you watch live you would still require a TV Licence under the current rules):
ITV Hub/ITV Hub+ – Free (ad supported)/£3.99pm (ad free)
All4/All 4+ – Free (ad supported)/£3.99pm (ad free)
My5 – Free (ad supported)
If that is not enough content for you, we still have some other huge offerings to come in the future as the other major entertainment groups services roll out. As in the UK, there has also been significant growth in the vMVPD offerings in the US. It remains to be seen which of these services attempt to disrupt the UK market in the future:
The new streaming service from AT&T’s WarnerMedia will launch in the US in May 2020 with 10,000 hours of content, including Friends. HBO Max will include everything that HBO Go and HBO Now have but will also include exclusive shows and movies along with WarnerMedia properties. It is priced above Netflix in the US and looks unlikely to come to the UK soon following a 5 year deal with Sky for its content.
Not due to launch fully in the US until July 2020 (available to Comcast subscribers from April), this is the new service from NBCUniversal. As a subsidiary of Comcast, this service will tie in with Comcast’s cable and broadband offerings. It will offer a free slimmed down AVOD version as well as a premium version at a reduced price with ads (SAVOD?) on top of the standard SVOD offering. It will also offer live sports alongside original programming and will primarily house the NBC and Universal Pictures back catalogue.
ViacomCBS/CBS All Access
Details are scarce but it is expected to build on the foundations of CBS All Access leveraging content from Viacom’s Paramount Pictures and pay TV channels which include MTV, Nickelodeon, Comedy Central and BET, along with CBS’s own channels and Showtime. This service is expected to act as their ‘Broad Pay’ option, with ViacomCBS splitting their services much like cable TV and using their other platforms to cover the ‘Free’ (Pluto TV) and ‘Premium Pay’ (Showtime Now) ends of the market.
Now under Disney ownership and they recently cited 2021 as the year to roll out internationally. Bundling with Disney+ as in the US seems likely and it gives Disney a controlled outlet to place less brand aligned content from the Fox acquisition. It is expected that NBCUniversal content will be pulled from the service by 2024. Hulu + Live TV transforms the service into a vMVPD offering access to 60 live channels on top of its own content.
Founded by Jeffrey Katzenberg, the former CEO of Disney who co-founded DreamWorks, with investment from BBC Studios, ITV, Disney, Fox, NBCUniversal, WarnerMedia, Sony Pictures, Liberty Global, Alibaba and ViacomCBS. Quibi will be a mobile-only streamer which offers programmes in short-form (4-10 minute episodes). Launching in the US at the start of April with an international release expected at a later point.
Sony Crackle - Sony has pulled the plug on PlayStation Vue, which was a vMVPD available through the PlayStation games consoles and looks to be focusing on Crackle which is a joint venture with Chicken Soup for the Soul Entertainment (a self-help, consumer good and media company). Crackle is an AVOD which shut down in the UK in 2014 but has nearly 10 million active users in the US.
Walmart’s VUDU – a pay VOD service that also offers free ad supported content. As the name suggests, it is owned by the well-known American retail company having acquired VUDU in 2010. NBCUniversal are in advanced talks to acquire the service to complement its own upcoming Peacock service.
Amazons IMDB TV – launching in UK & Europe shortly, this is Amazon’s free AVOD service.
Xumo – a free AVOD/vMVPD service that has just been acquired by Comcast ahead of the launch of its NBCUniversal Peacock streaming service.
Tubi – a free AVOD service that now has over 20 million users and plans to launch in the UK shortly. Unlike other services, the company does not plan to create its own content, instead focusing on providing a large library of content for free. However it’s strategy may change in the future with the Fox Corporation interested in acquiring the service having recently sold off a lot of its other entertainment assets.
VRV – another AT&T WarnerMedia owned service, this vMVPD focuses on anime, animation, gaming, comedy, fantasy and technology channels. Offering a free ad supported service alongside a premium paid subscription, it also incorporates access to AT&T’s WarnerMedia standalone Crunchyroll service.
Showtime Now – the ‘Premium’ offering from ViacomCBS, allowing users to watch the content from the Showtime premium cable channels without a cable subscription. Its content is currently shown in the UK through Sky Atlantic.
FilmRise – an AVOD service offering a wide range of film and TV content.
Acorn TV – an SVOD service that initially focused on providing UK drama and mystery content to the US and Canada, it is now available in Europe (and is eyeing a UK launch) and includes content from Australia, New Zealand, Ireland, Canada and other European countries.
fuboTV – an American vMVPD that is sports focused but now also offers more traditional channels as well. It offers a cloud DVR service and has linked up with FanDuel to integrate live sports betting data (but not the ability to place bets).
ESPN+ – majority owned by Disney, available separately or bundled with Disney+ and Hulu, it is a well known American sports channel covering a wide range of sports and has the exclusive rights to UFC Pay-Per-View events.
Sling TV – a vMVPD that focuses on live TV streaming in the US owned by the DISH Network.
YouTube TV – in the US, YouTube also offers a vMVPD service alongside its Premium service.
Kocowa – a Korean drama focused service that hopes to launch in UK and Europe in the future, it will have to fight Rakuten Viki for market share.
This list is by no means exhaustive, but hopefully it gives you an overview of some of the many available services and the strategies the largest entertainment groups are taking. Some are trying to replicate the existing satellite/cable services in a cheaper OTT form, whilst others look to move their content to their own SVOD service, and at the same time get into the rapidly growing AVOD market.
So, with all of the above services, how could your £12.88pm TV Licence fee be spent elsewhere?
A £12.88pm subscription would be at the top end of subscription pricing so you could undoubtedly get enough content to occupy all your waking hours through a combination of the SVOD/AVOD/vMVPD services covered but you would have to forgo live TV (under current rules).
However with no TV Licence fee you would expect to be able to watch live TV without a separate charge, but I imagine commercial services would quickly look to charge you for that functionality themselves. So it should be remembered that the BBC is not a commercial entity and its remit is therefore much wider than that of the other services whose decisions can be solely profit focused.
The BBC finds itself in a very difficult position, competing against groups and companies that are throwing ever increasing amounts of money at combining and evolving rapidly, so it will also need to change to keep up whilst still serving the needs of those who are unable or just don’t want to access these new services. Those users are likely to be the ones to whom which content delivery would not profitable or even possible (in some cases) for a commercial entity, like those areas that do not have a fast or reliable internet connection and users who cannot afford it. Really these are issues that should be tackled by the Government but for which currently the BBC and TV Licence fee provide a simple fix.
Pricing correct as of 24th February 2020.
The views expressed are the author’s and not ICAEW’s.