TDG: all major US Networks to go DTC by 2022
Joseph O'Halloran
| 15 March 2018

Taking their lead from Disney’s stated ambition to pivot to DTC, all major TV networks will likely launch standalone direct-to-consumer (DTC) streaming services over the next five years, according to a new report from The Diffusion Group.

Examining not only the growth of DTC subscription services but also what it calls the emerging 'media tribalism', the Future of Direct-to-Consumer Video Services - Analysis & Forecasts, 2018-2028 report notes that industry first flirted with DTC models three years ago when HBO and CBS launched the industry's first standalone subscription services. TDG believes that today both brands enjoy five million paying DTC subscribers and are well placed in a market where the unbundling of cable TV packages is set to accelerate over the next five years.

Leading the charge will be Disney, which is set to launch its much-anticipated ESPN Plus DTC product, and plans to roll out a branded DTC service in early 2019 featuring animated films and Marvel and Star Wars titles, among other high-value content.

“Big media companies are reacting more boldly to changes in TV viewing behaviour,” observed Mike Berkley, TDG senior advisor and author of the Future of Direct-to-Consumer Video Services - Analysis & Forecasts, 2018-2028 report. “Consolidating, bulking up on originals, and marketing directly to consumers are driving their strategic direction. These are early signs of an emerging media tribalism,” argues Berkley. "Major networks will increasingly reserve their best titles for their own direct-to-consumer services, which will help drive total network DTC subscriptions close to 50 million by 2022.”

Yet despite the general optimism, Berkley cautioned that DTC strategies come with great risk, especially for TV networks. “The legacy model is built upon decades of comfortable relationships between networks and operators,” he noted. “If networks extract too much high-value content too quickly, channel conflicts are inevitable.”