Published   Rethink TV

Disney, AT&T, Comcast stumble in the Netflix slipstream

Revenues forecast to 2024.

Rethink TV, the TV research arm of Rethink Technology Research, has released a forecast of the video revenues for four of the world’s largest pay TV and studio groupings, and finds that the only one that will have rock steady, uninterrupted growth is Netflix.

The other three, including AT&T which has just spent $85 billion buying Time Warner; Disney which has acquired 21st Century Fox for $71 billion, and Comcast which has owned NBC-Universal for a while now and which has just acquired Sky for $39 billion in Europe – will all experience reversals as service cannibalization affects their ability to build of streaming revenues .

This is laid out in a stark new report from Rethink TV, entitled, “Disney, AT&T, Comcast stumble in the Netflix slipstream – Revenue forecasts to 2024,” released this week. Existing service customers will get this for free.

The report reveals that AT&T will struggle to accelerate its belief in addressable advertising, while Comcast will do well outside of the US in both advertising and pay TV, but come last in the race for SVoD subscribers. Disney, which holds wild cards in ESPN+ and a massive movie catalog starts from a leading position, but will struggle to make inroads into SVoD globally, despite inheriting some key leading positions in places like India.

Come 2024 Netflix will remain the dominant force in streaming, earning more streaming revenue than the big three put together and it will have a growing influence on what is watched around the world. It’s market share will dilute from 63% last year to 52% by 2024, but our forecasts show that Netflix cannot be shifted from the number one spot.

The extraordinary success of Netflix has definitively affected the strategy of the big US Hollywood studios and forced their arms. The question investors have been asking is how can Netflix stand up to that assault on multiple fronts. The question they should be asking is how can the other three, and other companies like Apple and Facebook, keep enough of their existing content revenues to remain relevant.

The conclusion is that while many will survive to love on, few can thrive overnight and both AT&T and Comcast will continue to be reliant on their cellular and broadband revenues for all growth until beyond the forecast period.

The largest imponderable is Advertising Video on Demand (AVoD), and whether or not this will take off in mature video markets like the US. It does well in India and China. We forecast partial success here only, and the Netflix strategy of not giving in to AVoD establishes the global norm. However sports streaming services will drive astonishing advertising revenues, pillaging this revenue from broadcasting markets.

But despite huge content reserves the big three will struggle to become significant streaming forces, with Disney likely to reach just 96.5 million subscribers at the end of this forecast, barely 12.5% of the global total, by then.

Meanwhile across legacy pay TV, AT&T revenues will decline by $16 billion by 2024, and Comcast’s will fall $5.8 billion. Even Disney which has no pay TV offerings will lose $2.5 billion in channel licensing over this period and more through shrinkage in the global box office.

Who should buy this report:

The report “ Disney, AT&T, Comcast stumble in the Netflix slipstream” is for planners and strategy leaders inside broadcasters, advertising agencies, TV infrastructure suppliers, and their technology partners and investors at the C suite level.

This report will:

  • Isolate the key video based revenue streams for each of these major video players and forecast them each separately for the coming 5 years.
  • This will illustrate the opportunities and likely outcomes of these three major internationalization effort in video.
  • The report will contrast service pricing in different regions and show how the current strategies for each of Comcast, AT&T and Disney will position it against Netflix.
  • It will looks at how key AVoD markets develop and where that is expected to be less popular

This should show regional pricing trends, addressable advertising growth and technology obstacles to these strategies.

Companies mentioned in this Report:

21st Century Fox, ABC, Amazon, Apple, AT&T, BAMTech Media, Comcast, DirecTV, Discovery, Disney, ESPN, Facebook, Google, GoWatchIt, Hayu, HBO, Hotstar, Hulu, JustWatch, MLB Advanced Media, NBC-Universal, Netflix, Now TV, Sky, Sky Brasil, Sky Mexico, Sony Pictures, Star India, Time Warner, Turner Networks, Viacom, Voot, Vrio, Warner Media, Xandr, Yidio, YouTube

For more information contact:

Natalia Szczepanek (Client Relations and Marketing Manager): [email protected]

Office Phone: +44 (0)1179 257019

Download Executive Summary:

Download a copy of the executive summary

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Contents 2

Graphs and Tables 3

Introduction 4

Other sources of video revenue from the Big Three 5

Live Sports and addressable advertising 6

Netflix will hold off big 3 challenge on streaming 10

But big 3 also have legacy pay TV 11

Pay TV revenue switches to OTT/SVoD 12

Standoff over total video revenues 15

Content costs take toll, especially for Disney 15

Competitive dynamics—Pay TV bundles fragment into Apps 16

AT&T strategy and plans 19

Comcast strategy and plans 22

Disney strategy and plans 24

Conclusions 26

Methodology 27

Rethink TV: Forecasting disruption in video 28

Contributors and contacts 29

About Rethink Technology Research 30

Video revenues 2024 6

Streaming revenues including advertising by 2024 7

Percentage of video based on streaming by 2024 7

Comcast revenue OTT/SVoD v Box office 2018-2024 8

AT&T revenue OTT/SVoD v Box office 2018-2024 8

Disney revenue OTT/SVoD v Box office 2018-2024 9

OTT/SVoD subs 2018-2024 11

Big 5 total subs 2018-2024 11

AT&T Pay TV vs OTT/SVoD subs revenue trend 12

Comcast Pay TV vs OTT/SVoD subs revenue trend 12

Big 5 subs revenue 2018-2024 13

AT&T Ad v sub revenues 2018-2024 13

Comcast Ad v sub revenues 2018-2024 14

Disney Ad v sub revenues 2018-2024 14

Total video revenues 15

Content costs 2018-2024 15

Total revenues 16