The coming decade of the Wild West of personal entertainment video streaming. It's subscriber economics not ratings.

In the previous post we explored the 21st Century technology shift that has changed the home entertainment industry "television" to the personal entertainment industry "video streaming." What was not explored was the impact on the economic context.

For the past 50+ years, the economics of the home entertainment industry "television" has been portrayed with tables that looked like this:

The 2020 reality is these numbers don't matter in the personal entertainment industry "video streaming." In 1968-69 an average of 21.7 viewers watched ABC's  "The F.B.I." in its hour as opposed to programming on the two other off-the-air networks, NBC and CBS (Fox did not launch until October 9, 1986).

In 2018-19 an average of 7.9 million viewers watched CBS's "FBI" ...uh, well, that's not really true. Some folks actually watch it when it aired via a TV antenna or cable. Likely more watched a "recording" within the next week. They were all measured by the Nielsen folks.

Not reflected in those numbers were

• those who watched it when it aired via the CBS All Access streaming service,
• those who streamed an episode later - even a couple of months later - via CBS All Access, and 
• those who watched their recording weeks later.

But it doesn't matter to viewers because the ratings are important only to advertisers. And in the 21st Century advertisers are being rejected - we don't want to watch ads.

And then there is the Netflix effect. Netflix cares only about how many subscribers it has. And not just couch potatoes in the United States. Consider this from The Hollywood Reporter:

    In July, Netflix launched its first mobile-only plan, rolling out a $2.99 (199 rupees) a month offering in India to help boost its reach in a country boasting 478 million smartphone users. In October, the company launched a similar plan in Malaysia at $4.
    This year, the streamer is expected to test lower-priced plans in more markets to attract price-sensitive customers in locales where its regular offerings are already available.
    While addressing a conference in the capital, Delhi, on a recent trip, Netflix CEO Reed Hastings talked about the company's India strategy, saying that the streaming video giant would spend more than $400 million (30 billion rupees) for the years 2019 and 2020 on local content.
    The India plan, which became available in July, is the fourth option from Netflix in India. Its basic service costs $7.27 (500 rupees), which goes up to $11.50 (799 rupees) per month for its most expensive premium service. Netflix is still expensive compared to Disney's Indian OTT service Hotstar and Amazon Prime Video. Both services are offered at an annual rate of $14.50 (1,000 rupees), or about $1.20 per month.
    While addressing a conference in the capital, Delhi, on a recent trip, Netflix CEO Reed Hastings talked about the company's India strategy, saying that the streaming video giant would spend more than $400 million (30 billion rupees) for the years 2019 and 2020 on local content.

Simply put, Netflix and other streaming sources which offer original content without ads measure their economic success on monthly subscription revenue. The issue for them is will folks around the world watch what they have to offer. And don't get confused. The Netflix cheap smartphone only plan involves comparatively low resolution video (standard definition, 480p) which cannot be cast to TV's.  It is the ultimate personal entertainment and content can be downloaded, thereby separating the signal source presence from the viewing opportunities.

Representing the epitome of confusion between ratings and subscribers is the streaming service Hulu, (though likely to alter its model somewhat since Disney became its sole owner and also owns Disney+ and ESPN+). For years, along with Disney/ABC, NBCU and Fox had financial interests in Hulu, their programming (along with some cable channel programming) was available for streaming a day after it aired with or without ads, and Hulu has original programming. They also offer programming from foreign sources and old U.S. programming. And while rats ings are not irrelevant to ABC, NBC, and Fox, the only thing important to Hulu is their 28± million U.subscribers.

Netflix, of course, has 68± million U.S. subscribers, Amazon Prime at 100+ million, CBS All Access at 8+ million,  Then there is the new Disney+ at 10+ million and Apple TV+ at 10+ million. Coming to the internet near you this year will be the new HBO Max, NBC's Peacock, Quibi, etc.

What makes this all confusing is that Nielsen tells us there are 120± million U.S. homes with televisions and there are 270 million Americans over the age of 14 almost all of whom are smartphone users. Only Amazon Prime has a significant market share, but that is not exclusively because of its personal entertainment offerings.

Some have called the personal entertainment industry economy a wild west. It is likely to take most of the coming decade to sort itself out.