Weekly Column: Change of the Corporate Heart towards DTC Subscribers

In his capacity as a Columnist for California Sports Lawyer®, Founder and Managing Attorney Jeremy Evans has written a column about the strategy and implications behind Netflix and Roku deciding not to share total subscriber data.

You can read the full column below.

Total subscriber numbers on streaming platforms was once the cattle call for success in entertainment film and television. Times have changed. There are several reasons for the change of the corporate heart.

First, subscribers like the people and households they represent are finite. Meaning, eventually a business reaches a point where subscribers or customers are maintained, not gained in mass. The product is enhanced to keep existing customers engaged and wanting more.

Second, people have grown weary and tired of too many platforms. It is difficult to navigate between streaming platforms and paying for those services because there are at least five to seven really good ones to choose. Centralizing platforms like Roku, Prime, and AppleTV do help to create ease in navigating. Google also helps with finding where films, television, and live sports will appear. Streamers have also brokered deals with cable providers so that a live sport can be watched through a streaming channel.

Third, the streaming platforms have matured as a business model where the technology and content is no longer exploratory. The future of content is streaming. As a business matures, the finances must make sense or the business fails to succeed and dies or changes.

To the last point, what this means is that the business must be profitable. Business must move beyond research and development. For streamers, this is measured by net revenue through subscription and advertising dollars. Of course minutes watched and engagement will be key, as well as length of subscription.

One downside to not reporting subscriber numbers, as Netflix and Roku are pushing forward, is that it might prevent negotiation of more dollars for talent to show power and exposure of a platform to pay. On the other hand, if the minutes watched and engagement numbers are still provided, it will be an important data point to consider in negotiations and content decision-making. Nielsen would be a good example here in that more data is a good thing as long as the data can be analyzed.

It will be interesting to see if the talent agencies and unions push back against the studios and steamers to provide subscriber numbers and revenue per user.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.