The past two years have featured a massive transition in the way that viewers access media content. The proliferation of Netflix and its extended library of streamable content has thoroughly changed the industry as the service has ballooned to one of the most used brands in television viewership. Given that information, it might be reasonable to assume that when given an option of cable plus commercials versus internet and no commercials the latter will always win with audiences.
There is a new report out this week by Bernstein Research suggesting just that. More specifically, there is a threat to the likes of Nickelodeon and Disney Channel as a new favored method of consuming repeat content has deepened its roots into society. This ongoing threat is a bit reminiscent of the problems that MTV faced when an entire generation discovered YouTube was a better platform for music videos, implying that these two kiddie conglomerates will have to similarly evolve in order to maintain relevancy.
Now, many will be quick to point out that kids love their specific shows. If they do not get them, then they are unhappy, so the easy solution would be to strip the most popular programs from the Netflix library in order to draw eyes back to the actual channel. That is not going to happen. Nickelodeon and Disney both make millions of dollars from streaming deals, and there are competitive forces between the two encouraging both to play ball because if one drops out it would be like they are ceding an entire market to the competition even if it is at a bargain basement price.
This problem prompts even more concerns due to set subscriber fees with cable companies that are dictated by television ratings. While Nickelodeon makes around 25% of its revenue through commercials and Disney Channel generally promotes itself, the majority of revenue comes from monthly rates that cable providers pay on a per subscriber basis.
With that being said, solutions need to come in short order and there are a few available. An increased digital and on-demand presence could prove crucial for validating high network fees in the long-run. It may be difficult to measure, but what has been seen in the past is that people actually use these options. Building a specific digital platform to give an alternative to Netflix would ensure that the method of access still goes through the most profitable method of distribution, and it also goes a long way in enhancing the brand.