Netflix reports surge in subscriptions and revenues thanks to COVID-19

As expected, Netflix has experienced a material benefit from many societies being placed under lockdown thanks to the on-going coronavirus pandemic.

Revenues for the three months ending March 31 stood at $5.768 billion, a 27% year-on-year increase for the quarter, while the number of subscriptions globally was up 22.8% to 182 million. With many societies forcing citizens to stay at home for the vast majority of the day, it is unsurprising Netflix is benefitting from the current situation.

Interestingly enough, Netflix also spent far less over this three-month period on marketing activities than it had before, year-on-year 18% less in fact, though any gains here were partly offset by the additional $81 million which was allocated to technology and development.

“At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term,” Netflix said in the letter to shareholders. “Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth.

“In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”

The issue which Netflix faces in the long-term is one of production, though this is a challenge which the entire segment is coming to terms with. All filming has effectively stopped globally, and while Netflix will have content ready to launch over the coming months, the severity of the impact to new content launches will depend on how quickly normality can return to society.

This is a risk for the industry, but it is one which can be managed to a degree. Writing can still continue, as can production of animated content, though there will certainly be an impact. However, this should be balanced by the gains which Netflix is seeing through this period of societal lock-down.

“A surge in subs is notable which will have a positive impact on revenue over subsequent quarters,” said Paolo Pescatore of PP Foresight. “Unsurprisingly, engagement is going through the roof and will proliferate over coming months.

“You should expect to see users think twice about how much they spend with their current TV provider and may cut back/substitute in preference for online video streaming services. For now the future of SVOD remains rosy.”

Europe asks Netflix to save networks by restricting HD streams

European Commissioner for the Internal Market Thierry Breton has been on the phone to Netflix CEO Reed Hastings to officially request the streaming service slow down downloads.

Under the hashtag #SwitchToStandard, Breton has asked Netflix to enforce a slow down on customers who might be tempted by HD standard content. With HD content requiring 4-5X more data than SD, the threat to networks is quite apparent as more of the population are forced to stay inside and binge watch any new recommendations.

The issue being faced by the telecommunications industry is the perfect storm for network congestion.

Firstly, video consumption places much more of a strain on networks than any other type of internet traffic. These applications are incredibly data intensive, and while Netflix only requires a consistent 5 Mbps connection to function properly, the consistent streaming over sustained periods of time by millions of customers starts to add up.

Over the first half of 2019, video accounted for 58% of the total downstream volume of traffic on the internet, according to network management firm Sandvine, with Netflix accounting for 15%. Another issue which home broadband networks might face is more people connecting devices to routers.

“People are watching a bit more YouTube than normal (because it is a great source of information from a wide variety of sources) to try and figure out what is actually going on and to learn about what they should be doing,” Cam Cullen, VP of Global Marketing at Sandvine said in a blog post.

“And unlike normal, where their usage is divided between mobile networks, work, or school networks, and random wifi hotspots, it is all centred on home networks.”

With more people working from home, more devices are going to be connected to the home broadband networks as opposed to mobile, public wifi or more powerful work networks. Video conferencing will become much more popular, people skiving will have something on the TV, while kids needs to be kept busy as well. With parents attempting to work, whacking an episode of Paw Patrol or Pepper Pig on Netflix might have to suffice.

Another element to consider is the rise of online gaming, both on consoles and mobile devices, which will also be running off home broadband networks. Telecom Italia has attributed a material proportion of the 70% surge of internet traffic on its networks to increased use of games such as Fortnite and Call of Duty.

Italy, France and Spain are all countries which have gone into full lockdown mode, while it seems it will only be a matter of time before the same happens in the UK. Without the pub, clubs, cinemas, theatres or gigs to distract consumers, more will turn to the endless treasure trove of harmless comedies and rabbit hole documentaries to fill time in the evenings.

BT has already said it builds networks to deal with peak time traffic, therefore it does not foresee a problem, but what could be about to be unleashed is a monstrous amount of internet traffic as children are no-longer distracted by education or adults by alcohol.

All of the telcos are furiously working to increase capacity on networks which are potentially under threat, though whether the work can be done quick enough to mitigate the rise in traffic remains to be seen. It might not seem like a significant change but considering the popularity and increased use of streaming services over the coming weeks and months, downgrading to SD might have an impact if everyone makes an effort.

NBCUniversal writes another line in the cinema’s obituary

The streaming revolution has changed our content consumption habits on multiple fronts, and now NBCUniversal could add further pain to the cinema by offering theatrical releases as in-home rentals.

Coronavirus has started to threaten businesses in the entertainment and retail segments, as more of us are compelled to stay at home for extended periods of time, but this move from NBCUniversal could further threaten the cinema’s place in society. Starting with DreamWorks Animation’s Trolls World Tour, new theatrical releases will be available for a 48-Hour rental period from NBCUniversal sister companies Comcast and Sky, as well as a range of on-demand partners.

For the moment, this is a temporary measure to ensure NBCUniversal can recapture some of the investments made in these titles, but should it prove to be popular, this could be another line added to the cinema’s obituary. Why shouldn’t direct-to-streaming be considered a valid distribution strategy?

“Universal Pictures has a broad and diverse range of movies with 2020 being no exception,” said Jeff Shell, NBCUniversal CEO. “Rather than delaying these films or releasing them into a challenged distribution landscape, we wanted to provide an option for people to view these titles in the home that is both accessible and affordable.

“We hope and believe that people will still go to the movies in theatres where available, but we understand that for people in different areas of the world that is increasingly becoming less possible.”

This is not a cheap alternative for customers, however. The 48-hour rental period will cost $19.99, or the equivalent in international markets. It is slightly more cost effective than going to the cinema, but whether this proves to be an adequate replacement from an experience perspective is unknown. But then again, who says the digital natives of tomorrow demand this cinema experience.

Looking at the statistics, annual admissions over the course of the last decade have remained relatively stagnant.

Year Annual admissions Year Annual admissions
2010 169.2 million
2011 171.6 million 1936 917 million
2012 172.5 million 1946 1.63 billion
2013 165.5 million 1956 1.11 billion
2014 157.5 million 1966 288.8 million
2015 171.5 million 1976 103.9 million
2016 168.3 million 1986 75.5 million
2017 170.6 million 1996 123.8 million
2018 177 million 2006 156.6 million
2019 176.1 million 2016 168.3 million

The numbers are steady, as you can see from the column on the right, the cinema does not command the same status as it has done for previous generations. Digital natives have demonstrated they are open to new experiences, perhaps explaining why the upward trend of cinema admissions from the 80s onwards has flattened; the new generations are perhaps not as interested.

Looking at an EY report on changing consumer behaviour, 54% of households spend more time on the internet than traditional TV, while 64% of 18-24 year olds state that streaming via the internet is the primary way they watch TV programs and films. This number declines to 30% for older demographics.

Like linear TV, the cinema segment could come under threat from new consumption habits and accessibility of content.

Ultimately, companies like NBCUniversal will not care about how the content is distributed, as long as the company grows revenues year-on-year. If there are greater profits, while also keeping the customer happy, in going directly to the living room like it is here, why would it bother including the cinema?

What you have to consider today is how accessible content is becoming. Some streaming services are coming bundled into existing content offerings or pre-installed on smart TVs, while data tariffs are becoming cheaper each year. Accessing streaming services wherever, whenever is becoming almost second nature.

There will be those who suggest the death of the cinema is a preposterous idea, but once upon a time there were those who questioned whether there would be a future for mobile phones and personal computers or believed banks would be a permanent of the high street. Netflix killed Blockbuster and now with its streaming cronies, it could be squaring up to the cinema.

Another interesting chapter to this story is the acceptance of Netflix in the entertainment clique. In 2019, Netflix movie Roma caused quite a stir as it received several nominations for the 91st Academy Awards after an incredibly short run in the cinema. The traditionalists in Hollywood criticised the decision, which almost led to rule changes, though the Department of Justice intervened with the threat of an anti-trust investigation should streaming companies be treated differently to other content creators.

As it stands, to be eligible for an Oscar nomination a film only has to include a seven-day run in a commercial Los Angeles County theatre with at least three screenings a day. This is a minor box to tick and may not have a significant impact on the decision-making process for distribution strategies.

This is a very interesting development as it adds credibility to films which don’t have an extended run in the cinema. In years gone, straight-to-video was a dirty concept, but with Netflix collecting 24 nominations for the 92nd edition of the Oscars, has the idea of skipping cinema been validated?

The cinema industry looks to be one which is prime for disruption from those who think further ahead than tomorrow. The experience of the cinema cannot be easily replicated, but it is an industry which has not really changed over the last few decades and is becoming more and more expensive. It is losing its status in society, opening the door for new ideas. Skipping the cinema in launching new content might soon become a more attractive idea the digital era of tomorrow.

Some reading this article might not be convinced by the idea, but a more relevant question is how receptive digital natives, the primary audience of tomorrow, would be?

Netflix is winning the streaming war – Nielsen

There might be a lot of pretenders to the video streaming crown but data from the US demonstrates one thing; no-one comes near Netflix.

Hulu, HBO and Amazon Prime might boast and posture about success, but the true measure of victory for a content giant is eyeballs on the screen. According to data from entertainment data firm Nielsen, streaming services now account for 19% of the total TV usage across the final quarter of 2019, with Netflix taking a considerable chunk of the audience.

Perhaps one of the most interesting statistics to emerge from this data is the consumers increased appetite for data.

As it stands, 60% of US consumers subscribe to more than one paid video streaming service. As more options have emerged, 93% of the survey respondents suggest they will either increase or keep their existing streaming services.

One of the big questions which has been circulating the industry for the last few months is how tolerant will consumers wallets be to the increased number of service providers? The market is already fragmented, with more launches on the horizon, though a household will subscribe to more than one service which will offer encouragement to those dreading the prospect of a head-to-head battle with Netflix.

Looking at the reasons behind the purchase, it is not particularly surprising. Cost, ease of use, availability of content and streaming quality are the top reasons anyone would purchase a service.

While it might seem obvious to state, some have clearly not got the memo; user experience is just as important as the content and pricing strategies which have been employed. Sky has ruled the linear TV market in large blocks of Europe for decades because the user experience has been the highest quality, and few can compete with the simplistic and functional set-up which Netflix has created.

Interestingly enough, with the aggressive volume of content which will be available to consumers, the discovery function is going to be important. This will drastically impact the user’s ability to locate relevant content and perhaps the appetite to trial new services. If user experience is completely satisfactory, then why would they look elsewhere, the opposite can also be said to be true.

There might well be a tsunami of new services hitting the streaming market over 2020, including the wave making Disney+, but realistically for the moment, no-one is challenging Netflix for the content crown.

Netflix reports solid Q4 but braces for a challenging 2020

Video streaming giant Netflix reported revenue growth of 31% on the back of 21% subscriber growth, but it will face a lot more competition this year.

These numbers were a bit better than forecast and were rewarded with a small share price bump. Perhaps investor exuberance was tempered by the need for Netflix to invest ever greater amounts of cash on content in the face of relentless competition. With the ramping of a bunch of fresh rivals from the US in the form of Disney, HBO and Apple, this pressure to invest will only increase, but the cash has to come from somewhere.

“Worryingly, the company is burning through a lot of cash,” said Paolo Pescatore, Analyst at PP Foresight. “It needs to recoup this by adding customers more quickly, increasing prices or taking on more debt. Therefore, expect price rises in all key markets during 2020.”

“There’s a fine juggling act by raising revenue through price increases vs. retaining subscribers. This could backfire as many of the new and forthcoming video streaming services are cheaper than Netflix. This makes Netflix vulnerable in its home market where it stands to lose out, quite considerably as underlined by these latest results.”

“Let the streaming video wars commence. Netflix has a huge head start and remains in pole position given its broad content catalogue and extensive relationships with telcos and pay TV providers. It should be able to weather the streaming battles over the short to medium term. All the future subscriber growth will come from its overseas operations. EMEA is and will continue to be a key region of growth for coming quarters.”

Of all the new competitors Netflix seems to be most wary of Disney+, with its massive back catalogue of family blockbusters. You can hear in the earnings chat below that the Netflix leadership reckon most of the growth for Disney+ will be taken from linear TV rather than Netflix, but there is presumably an absolute ceiling on the amount a typical household is willing to pay for video content of all types. Faced with all these new offerings some people are bound to reconsider their Netflix membership in 2020.

 

2019 app economy: TikTok ran riot as Disney got off to a flier

The older characters in the room might not get the appeal of small(est) screen entertainment, but the app economy is real and generating some serious revenues today.

Although gaming is the most obvious segment of the app economy to act as the poster boy, apps are now spanning the breadth and depths of our daily lives. From healthcare to banking and messaging to shopping, if you can think of it, there is probably an app for it.

With 2019 now firmly in the rear-view mirror, Sensor Tower has completed its analysis of the final quarter and the biggest stories over the course of the 12 months. And starting with the top-line figures, the app economy is booming.

Across the 12 months, Sensor Tower estimates there were a total of 114.9 billion app downloads, a 9.1% year-on-year increase, with Apple’s App Store collecting 30.6 billion at 2.7% growth and the Google Play Store at 84.3 billion with growth rate of 11.7%.

Looking at the breakdown of where users are most interested, three areas dominate as most would have expected. Social media, in which we are going to include the messaging applications, video and gaming.

WhatsApp once again claims the title of most downloaded application throughout the year, though TikTok has completed a whirlwind year by claiming second place. While it is undoubtedly a popular application, there has been plenty of negative press to dissuade people from downloading.

In October, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer requested a national security investigation into the app, while the US Army and Navy both banned the use of the device on government-owned devices. To make matters worse, TikTok then had to announce it had fixed a vulnerability which allowed hackers to manipulate user data and reveal personal information.

While all of these incidents tarnish the reputation of the app, it wasn’t enough to stop users downloading. Even for the final quarter, the period where TikTok’s credibility came under the spotlight, it was the second-most downloaded application on the App Store and the third most popular on the Google Play Store.

Another remarkable statistic is India accounted for 45% of the total downloads, while Brazil was the second largest market for TikTok. Revenues for the app are already on the increase, there was a 700% sequential increase for the final quarter, but the remarkable popularity in two of the worlds most attractive developing markets will make this app a very interesting proposition for marketers moving forward.

Looking at the gaming section, Call of Duty publisher Activision demonstrated it is possible to successful take a game from traditional gaming consoles onto mobile. The game led downloads during the final quarter worldwide with 30 million downloads in the US and almost 50 million in Europe.

Gaming will always be the poster boy of the app economy, perhaps because it is the most obvious way revenues are generated through apps. What will be interesting to see over the next couple of months is how many of the traditional gaming titles, those which were designed for gaming consoles, are buoyed by the success of Call of Duty and attempt to crossover.

The final area worth noting from the report is the continued success of video content on mobile, most notably, Disney+.

While there are still questions about the depth of the content library, it cannot compete with the Netflix breadth and depth, the Disney brand and the current assets have produced excellent results after the launch in the fourth quarter. The Disney brand is one of the strongest worldwide therefore there was always going to be good uptake, though it needs to capitalise on this momentum, investing heavily in diversified content, if it is to be a genuine threat to Netflix.

Looking at the downloads, it was the most popular app to be downloaded in the US with 30 million, taking in more than $50 million in revenue in the first 30 days. In Q4, Disney+ accounted for 34% of video content downloads, with Netflix and YouTube tied for second on 11%.

This success was also translated into the revenue share. Sensor Tower estimates Disney claimed 16% of the total revenues across the quarter, just leading Netflix which claimed a 15% share. What should be noted however, Netflix has shifted payment from the app stores and onto online channels.

However, one swallow does not a summer make. We suspect numerous subscribers were downloading the app out of curiosity, therefore a much more telling picture of Disney will be in 12 months’ time. Unless the current content assets are supported by new, and varied, titles, we suspect churn might be considerable. Netflix is still content king for the moment, but Disney could not have gotten off to a better start in its challenge.

SVoD claims 66% of UK home entertainment market revenues

The entertainment landscape is shifting at remarkable speed, but it might surprise a few to see the internet giants are hording such a monstrous proportion of the wealth.

According to the latest statistics from the British Association for Screen Entertainment (BASE), the home entertainment sector grew by 9.5% in 2019, bringing the total market value to £2.6 billion. Subscription video on demand (SVoD) accounted for 65.9% of this total, with Amazon and Netflix leading the charge in the UK.

“The UK’s creative industries make a significant contribution to both GDP and the broader employment landscape, something likely to be further enhanced by the success of emerging SVoD platforms and by the response to that from other quarters,” said Kevin Dersley, Co-Vice Chair of BASE.

“All of this change endorses the buoyancy of film and TV content but as a category we must ensure we’re fleet of foot and part of the ongoing digital revolution mentioned earlier. We know that audiences find enormous value in our content and the first half of 2020, packed with diverse new IP as well as must-see franchise titles, should serve as the perfect reminder that in a market of consumers hungry for content, there’s plenty of room for those able to adapt.”

As Dersley points out, while this is an impressive number, there is plenty of room for growth as the concept of SVoD is adopted by more demographics and additional platforms are launched.

Looking at the current UK market, Netflix and Amazon are clear market leaders, 9.9 million and 7.7 million subscriptions respectively, though Now TV, Sky’s answer to the OTT trends, also has a notable presence. Perhaps one of the more interesting developments over the course of 2020 will be the emergence of new competition.

BritBox and Apple TV+ have already launched in the market, while Disney+ will enter the fray on March 31. The marketing assault has not been felt in the UK just yet, but analysts are predicting with some venom these three services will aggressively attempt to carve a slice of the incredibly profitable pie being selfishly horded by Netflix and Amazon currently.

While these figures are of course noteworthy, because the most interesting development tied to these services is the shift towards mobile consumption of content.

Although traditional broadcasters are creating more VoD services and answering the mobility demands of consumers, the hand is generally being forced. The likes of YouTube and Netflix are driving the shift towards mobile consumption of content, and trends are accelerating.

Twitter has said that 90% of the videos viewed on its platform are from mobile devices, while more than 50% of all YouTube’s content is consumer via mobile. Cisco predicts that 82% of all mobile internet traffic will be video by 2022. Consumers are ditching the laptops and consuming more content via mobile.

SVoD is already making a considerable dent in the wallet, but with more services to be launched and more consumers intrigued by mobile consumption, there is still plenty of room for growth.

Italy challenges Netflix tax strategy

The Italian Government is investigating Netflix after the streaming giant failed to file a tax return in the country.

According to Bloomberg, an investigation has been opened to ascertain whether Netflix is liable to pay tax in the country. Although Netflix does not have offices or staff in the country, it does own fibre-optic cables and servers. The probe will aim to determine whether this is deemed a presence which makes it liable for tax.

Italy is currently in the process of cracking down on multi-nationals which it deems does not contribute a reasonable and fair amount of tax to the national coffers. Gucci owner Kering SA has already agreed to pay $1.37 billion to settle an investigation, while Mastercard is also facing scrutiny. With such a wide-ranging remit, it was only going to be a matter of time before Silicon Valley was brought into the picture.

While it might be causing political friction with the US, the residents of Silicon Valley are facing more scrutiny when it comes to creative taxation strategies. Owing to the nature of the internet and there being no need to maintain a ‘physical’ presence in some countries, many of the Big Tech fraternity have been employing creative tax strategies for years, paying what some would consider miserly in comparison to the profits made.

Europe has had enough of Big Tech seemingly avoiding paying fair and reasonable tax back to the societies they benefit so richly from, and Italy is just one of the cogs in the machine. The UK and France are two other countries taking a more strident approach, though a bloc-wide approach from the European Commission has been scuppered to date by self-serving members such as Ireland and Luxembourg.

What this does have the potential to cause is greater conflict between Italy and the US.

The relationship between the two is increasingly fraught. Yesterday, the US threatened Italy over any potential relationship with Huawei, while it is also on the verge of imposing new tariffs which would threaten the export of Italian wine and cheese. President Trump has already suggested ‘digital taxes’ are a way of Europe bleeding US success, and we suspect few will be happy with Netflix being targeted here.

What is worth noting is that these are very early days in the probe, though there could be some interesting precedent set. If the government argue correctly that hardware counts as a physical, and taxable, presence in a market, it could open the door for more probes into other internet companies who maintain they do not have a physical presence in a market.

What we are unsure about is why Italy is going down this route instead of taking a similar path to the UK and France. Netflix can be forced to declare how many subscribers it has in the Italian market, and therefore how much revenue it is realising. It seems a much simpler means to success to simply apply a sales tax on the revenue which is being taken from Italian subscribers.

Third-parties are next battleground in video streaming war

Securing a partnership with the likes of Netflix and Amazon might be the golden-ticket for the telcos, but no-one should forget they have as much negotiating power as the OTTs.

For the telcos, convergence is an oasis of profit in the barren desert of the connectivity industry. As traditional means of generating cash are either destroyed (SMS and voice tariffs) or increasingly squeezed (CAPEX investments for 5G), many telcos are searching for differentiation to charge more and prove they can add value beyond the utilitised connectivity column. Content is a very popular route for many to take.

Aside from attempting to create content platforms, more telcos are seeking third-party relationships to move into the aggregator business model. This is a very sensible approach to business, the telcos can add a lot of value to the OTTs and securing a partnership with one of the more prominent streaming players is a key cog to their own ambitions. However, despite the desperation of the telcos, they should consider themselves on equal terms to the OTTs.

“Every telco is fighting to become an aggregator, but there is also a battle between the streaming OTTs to gain visibility,” said Paolo Pescatore of PP Foresight.

As Pescatore notes, outside of the two major players in the streaming world (Amazon Prime and Netflix), achieving visibility and scale can be very difficult. This is and will continue to be an incredibly congested field, therefore the relationship between telcos and OTTs could add an edge for any challenger.

Looking at the growth opportunities for the OTTs, there is plenty of cheddar left on the table, though in the developed markets, there are only crumbs left. Take the US for example, here Netflix subscriber growth has slowed, suggesting the glass ceiling for direct customer acquisition has been reached, or will be in the near future. The question is how these final customers can be engaged? Third-party relationships are key here.

At IBC last year, Maria Ferreras, VP of EMEA Business Development at Netflix highlighted that partnerships with telcos were an important cog as the streaming giant continues to evolve. At the time, the discussion was primarily from a billing relationship, though there are plenty of other opportunities.

Partners with their own content platform offer Netflix and Amazon something incredibly important; real-estate. Whoever can secure the most prominent position on the content platform will gain additional visibility and engagement with customers. It is evidence the OTTs are buying into the convergence strategies employed by the telcos, but also the value of the telco relationship with the customer.

Looking around the world, these partnerships are becoming much more common. Netflix has been embedded in the Sky platform in the UK, while Amazon Prime has been integrated into the Virgin Media platform. Mexico’s Totalplay has become the first operator in LATAM to add Amazon Prime to its TV service, while Vodafone Spain has secured partnerships with Netflix, HBO Spain and Amazon Prime.

There are of course numerous ways in which these partnerships can develop. Some are simply billing relationships, allowing the streaming service to be added onto the monthly bill, while some can have the OTT experience embedded into the content platform offered by the partner. What is clear, however, is this is an arms race from the OTTs.

The more partnerships which are in place, the more opportunity there is to engage potential customers and increase subscriptions. These partnerships are not only about securing visibility or accessing billing systems, but also leaning on another brands credibility to engage customers who wouldn’t have been previously accessible.

Interestingly enough, there aren’t many telcos or content providers who have relationships with more than one of the streaming giants. This might be a coincidence, or there might well be a desire from the OTTs to secure exclusivity through the platform of choice, even if it is not made official or public.

The challenge which many will face is going toe-to-toe with Amazon and Netflix. If these partners are securing the best relationships with the telcos, they will gain the most eyeballs on their services. Disney is company which will certainly want to lean on relationships with third-parties, but it will have to move sharpish to ensure it is not shut out.

Although Disney is one of the most prominent brands on the planet, it is almost unknown in the content world. This will present a challenge in two ways. Firstly, cutting through the background noise to educate the user on its offering, and secondly, the billing relationship.

For both of these challenges, third-party relationships with telcos and content platform owners can help. A direct line of communication is already in place, visibility can be offered through apps, billing relationships already exist, and third-parties are looking for partners to help build bundling options.

If Disney is going to be successful in its pursuit of streaming fortunes, it will need more than engaging content. It already has the content, and the ambitions for original content creation do look promising. The challenges will be in terms of securing visibility and credibility in the eyes of the consumer.

Telcos should realise sooner rather than later that they are an equal partner to the OTTs in this context, as they are just as desperate to secure favourable partnerships as the telcos. This is the next battleground in the streaming race; partners mean prizes.