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FAANGs ‘set to rebuff competition’

Adult Swim animated comedy Rick & Morty

The FAANG (Facebook, Apple, Amazon, Netflix and Google) companies will remain dominant through to 2023, despite competition from the likes of Disney+, according to research from consultancy firm Ovum.

The five firms are set to account for 63% of global OTT subscription revenue this year, according to Ovum’s World Information Series–Service Provider (WIS-SP) service.

The service also predicts that the FAANGs will largely hold steady through till 2023, when they will represent 60% of the market, despite competition from the likes of Disney+, Apple TV+, HBO Max, Discovery and NBCUniversal’s Peacock.

The next five years will see unprecedented competition in the global battle for direct-to-consumer (D2C) video supremacy, with huge investments in OTT video technology, original and exclusive content and subscriber acquisition promotions.

These promotions include Verizon’s offer of 12 months of free Disney+ to around 50 million US mobile subscribers.

This is likely to accelerate declines in traditional pay TV while making life unbearable for smaller video platforms that either cannot or will not sustain multi-year losses in order to survive, according to Ovum.

Among those to have bitten the dust of late are PlayStation’s Vue, which will close in January 2020 after failing to find a buyer, while Walmart is seeking buyers for its transactional video service, Vudu.

“FAANGs include the most innovative, disruptive and largest companies ever to compete in entertainment distribution,” said Ed Barton, chief analyst of Ovum’s consumer and entertainment team.

“These companies have built dominant positions in the key growth segments of video distribution: OTT subscriptions and advertising. This situation is making life very hard for competing video services seeking to gain a foothold.

“The FAANGs are feasting while entertainment giants prepare to lose billions of dollars establishing direct-to-consumer video platforms. The entire OTT video industry is likely to be loss-making until the mid-2020s.

“The companies left standing in 2025 will have the opportunity to fashion the long-term future of visual entertainment distribution, but they will have paid a very high price.”

In related news, research conducted by pop-culture marketing agency Experience12 at last month’s MCM London Comic Con found that, among 1,008 attendees, over half (54%) said they would subscribe to Disney+.

Netflix remained the preferred streaming service among Comic Con attendees, with 82% saying they preferred Netflix to any other streamer in the market.

The three most anticipated TV shows among those asked were season four of Adult Swim’s Rick & Morty (24%), forthcoming Netflix fantasy series The Witcher (17%) and Disney+ Star Wars spin-of The Mandalorian (11%).

Meanwhile, asked their favourite way of viewing content, 66% said streaming subscription, 21% said TV on demand and 5% said live TV.

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