In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about the new Hollywood metric (Average Revenue Per User (ARPU)) that studios and ratings services are using to measure the success of streaming services.
You can read the full column below.
The streaming wars are about to embark upon another battle. Average Revenue Per User (ARPU) is the new metric that studios and ratings services are using to measure success of streaming services. ARPU is much easier to measure as it is based on pricing versus the elusive minutes watched, viewers, or the seemingly-decreasing body of subscriber numbers.
One of the likely results of measuring success in streaming by ARPU, essentially money made per subscriber, is that the pricing of streaming platforms will increase. There is already some evidence of this via Disney+ and their ad-based streaming platform. Amazon is also increasing its pricing overseas. Netflix is also introducing an ad-based platform, which seemed unlikely if not an impossible business strategy for the company just a few years ago. The ad-based platforms offer consumers a less expensive option from the more expensive premium options that are becoming more expensive as content and competition is getting tougher.
Spotify, the music and podcast streamer, is even considering selling concert tickets as a complimentary business to compete and add more revenue. Streamers are likely to play a huge role in sports content as well considering the potential of the College Football Playoff (CFP) becoming free of NCAA regulations (although the CFP is already an independent entity) and knowing that NBC, Fox, and CBS just paid $7-8 billion dollars to broadcast and stream Big Ten sports. Content is still king and it is expensive to license, especially live sports.
When streaming options passed cable for the first time history in July 2022 as the number one consumer preferred way to watch content, it marked a significant point in film and television. Streaming is here to stay and continues to grow. It is also no surprise that as competition among streamers increases, there is less focus on subscribers and more on revenue and in-person experiential.
One interesting aspect of the competition among streamers and social media platforms is that the battle for content is also a battle for the hearts and minds of people. So much so that social media platforms have been sued for their alleged inability to regulate content consumption among minors preferring to amplify engagement over protection from harmful content. What happens next in the streaming wars is going to be interesting. For one, Amazon’s ad integration for the NFL’s Thursday Night Football is likely to change how we watch content or at least how advertisements are included in content. Amazon is also teaming up with Nielsen to measure viewership. The partnership between Amazon and Nielsen will hopefully bring the type of transparency and collaboration that has eluded much of Hollywood and sports networks in the streaming age. Data needs to be an essential part of the business to help make even more informed decisions.
About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.