Distribution : Wondering who he is trying to fool? by Raquel Deloatch

Tubi has always and only been an AVOD channel, and AVOD is the only economic model which is sustainable across the industry - as the plain and open (lack of ) profit experience across all major svod channels AND as 70 years of television have shown us. Bloodbath there may be, but SVOD has always been and always will be an unsustainable, misguided and financially destructive model for the film/tv industry (with some few exceptions which by their peculiar structure prove the rule). The transformation of NetFix into AVOD is an admission (finally) that the SVOD model will never work.

Yes Tubi has always been a AVOD channel, however to think he or any other AVOD channel escaped the massacred is insane. Everyone is gunning for the same advertisers to advertise on their network. When Netflix either acquire AVOD or build a AVOD channel, advertisers are going to be the belle of ball and it not only going to impact the current top players but us smaller placers. I was never a big fan of the SVOD model, but any business model without a way to generate additional revenue sources is a bad business model. As you know, with AVOD is is all about numbers, how many people are going to see their ads. It is easier to convince someone to pay $10 and up a month than a company with a board of directors to commit to millions of dollars to advertise on your channel.

I understand what you are saying, but I think you really are underestimating the willingness of advertisers to pay, and the size of that industry. In the very early days before YouTube was a thing, I operated Moviesight.net one of the first streamers. We had an AVOD model. Back then in 2001, when there was no avod outside TV and no way of proving my viewer stats I could quote $1000 a spot and an advertiser would not blink, and I could quote $10k a spot and the advertiser would not blink, and the higher I went I never saw a blink. The only issue was their familiarity with the medium. But given their willingness to advertise, the money pit seemed bottomless. It's even bigger now. They are the same willing-to-spend people today, except already sold on the medium.

Advertising currently funds, to unfathomable levels of profit, all conventional television platforms and some unconventional ones, Google/YouTube, all major social media platforms, a good number (sadly) of so-called news & journalistic productions, a great many OTT services & channels, scientific research, sporting events, cultural events, theatre, museums, etc... The idea that NetFlix will suddenly grab the lion's share of this is highly unlikely. Don't forget that the other MPA cartel members are in process of pulling all their content from NetFlix, and NetFlix itself isn't really well loved for it's own content. NetFlix is only one service, it's only one voice, it's only one website. Yes, it's global, it has many divisions, but there's not a lot it can do to change the fact that in the digital world, it has the same real estate as your own smaller streaming platform, and my own. Our only challenge is to get heard above the noise.

I have to disagree that it's easier to get someone to pay $10/month. They aren't paying only $10/month - they are paying $10/month each to many different services and that's a problem for them. I talk to people every day and I have never heard anyone say they are happy about that, especially given that they usually only go to a service for one or two shows and not the whole platform. On Facet.TV we've found people are happy to support the shows they like (through TVOD), while not caring about those they don't want to watch. Subscription fees, by definition, mean that the purchaser is subsidizing shows they don't like as well as those they watch. That's becoming an issue to a lot of the audience. Venues ignore that sentiment at their own peril. AVOD with a TVOD option is, to my mind, the best solution. Greedy NetFlix and major services are intent on keeping subscriptions along with AVOD and PVOD though, and we'll see how that works out for them in the long run. Again, they all effectively keep independent producers out of this calculus, and not recognizing the disparity in access to audiences is a serious miscalculation. It affects independent streamers as well as independent producers. But that's a whole other topic.

Streamers want subscriptions so they can stabilize their income. But it's bad for the industry because as subscriptions stabilize and drop as they must, income stabilizes and then drops. But in a VOD environment you must bring more and more shows on to keep subscriptions stable or rising, and that means that you pay producers less and less for their content (assuming the service ever generated enough to pay something reasonable in the first place). Frankly, I don't care that streamers fall by the wayside. They are monetizing a producer's content, which today they seldom want to pay anything for it up front - ie. they get their inventory for free. What other industry can tolerate that? None. Major studios, NetFlix included, don't operate on that basis, but independent producers are forced into it by the subscription model everyone wants to emulate. The major industry couldn't survive that way and the independent film industry cannot survive with that structure either. If streamers & distributors cannot pay reasonable rates for their inventory, they simply shouldn't' survive. The producer takes on all the risk at the end of the day for her film or series. She shouldn't be saddled with covering a streamer's business expenses as well.

I sat in on Black Media Upfront hosted by Byron Allen it was very disheartening him listen him complain for half hour about major brands not investing 5-10% of there advertising budgets towards Black Owned Media- not Black Target Media. They not only had a cable channel but the content was streamed as well. They had the numbers. That made me realize how very competitive the AVOD model is. As for indies being forced into subscription I disagree. Indies ran fast as they could to subscription. The issue I had with Netflix is they underpaid for indie films and it took months for them to get paid for the content.. Nevertheless if indies failed to do a theatrical release to increase the value of their IP it is on them. I have been in many arguments with indie filmmakers who hailed SVOD as their savoy , granted I was telling the NO, they didn't listen. They wanted to believe that was going to launch their careers and make millions. Many left so much money on the table.

Yes, Shadow Dragu-Mihai, Esq., Ipg but what about the what the audience wants?

I personally won't watch anything with commercials. Despite paying for several sub services and generally only watching one or two shows on each service, I'm watching exactly what I want with no ads - and still paying less than half of what we spent on cable/satellite (and we were conservative with even that spending - no extras).

To me, that's the whole point of streaming. By all means streamers can go to an AVOD tier to be sustainable (that argument for another time), but any service that gets rid of their ad-free tier loses me as a customer.

And sure, Tubi and other free services are just that - free (so high cable costs are avoided) - but I'm willing to pay for no ads.

Just sayin'. :)

John Ellis That's why I say having a TVOD option, for those who are willing to pay something reasonable for an ad-free experience. Frankly, if the audience doesn't want to pay enough to make it worth a producer's investment, they shouldn't have access to the show. @Raquel Deloatch - we agree on the unwillingness of streamers to pay; as I have said, that's the obvious result of reliance on streamers. But you can't fault indies for not having a theatrical release - we've been effectively locked out of theatrical since 2000, and you don't have to take my word for it, you can listen to Roger Corman and Lloyd Kaufman and dozens who have made the same angry observation. Or better yet you can do your own research. Indies are literally forced into subscription streaming by the racketeering machinations of the cartel, plain and simple, which have become even more apparent since the DOJ was sucked into setting aside the order against MPA member antitrust just a couple years ago. It has to change.