While the rise of digital video platforms has resulted in lower advertising revenues for media networks, popular shows have found their way to streaming services, thereby boosting content licensing revenues. However, the media companies are now giving a second thought on this arrangement. Time Warner as well as 21st Century Fox recently stated that they would be licensing more content to their in-house VOD services rather than through third-party platforms. This would be a step in the right direction as licensing revenues are cannibalizing more important income sources – advertising and subscription – for the media companies.
We believe that the future will hold place for both – television as well as streaming – for viewing content. While several media networks have seen lower viewer-ship on traditional television in the recent few quarters, it doesn’t necessarily mean that overall viewer-ship for those networks has fallen. It could be that some of the programming was accessed via other platforms which formerly were not measured. Note that it’s only recently that Nielsen has started measuring viewer-ship trends on Netflix, among other digital platforms.
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