The New Breed of SVOD Services

by Hunter Sappington | Aug. 29, 2017

Within the past month and a half, a new type of video service is available for subscription. The release of AMC Premiere and FX+ are the start of a new breed of these services. Available only to pay-TV subscribers, these services allow consumers to pay a fee per month and receive all of the shows from one network or channel ad free and on demand. They are not OTT services because they are not delivered over-the-top. Instead, they function more like premium, ad-free TV Everywhere services.

21st Century Fox's version of the service is called FX+, and it is currently only available to Comcast Xfinity TV subscribers. For an additional $5.99 per month added to their cable bill, Comcast cable subscribers can use Xfinity On Demand, the Xfinity Stream app, or the Xfinity website to stream all FX and FXX original series with no ads. Most series will have all seasons available, but a few will only offer the current season. Fox noted that the service offers more than 1,100 episodes of content, dating back 15 years. Furthermore, select series are be available to view in 4K resolution.

AMC Premiere is the other service similar to FX+ that was released in July. It offers an on-demand, commercial-free option to watch popular AMC content such as The Walking Dead and Into the Badlands. In addition to shows broadcast on TV, AMC Premiere also offers a selection of uncut movies and other bonus content, and it will also add more original content available exclusively through AMC Premiere. 

The reason these services are intriguing to content providers is due to the fact that it allows them to offer shows direct-to-consumer without having to risking creating an OTT service and the fact that provides a new steady source of revenue that does not rely the volatility of ad revenue. Secondly, these services provide a new outlet for content that these content producers have the rights to that otherwise do not make it onto broadcast TV. The premium ad-free outlet for distributing content also allows content producers to take more risks with their content because they are not beholden to advertisers, which are often wary of edgy content that may not appeal to a broad audience. It is a win-win for both pay-TV providers and the content providers because new customers must already be pay-TV subscribers, so the revenue is incremental. Both sides are able to recoup the ad revenue lost on the front end with the subscription revenue. 

With the release of AMC Premiere and FX+, Comcast has launched these types of service twice now with two different network groups. Now that multiple companies are unveiling services like these, it is a notable trend in the video market.  Not only will more services like these two likely find their way onto Comcast's platform, but FX+ and AMC Premiere are also likely to be offered by other pay-TV providers and potentially even vMVPDs such as PlayStation Vue going forward.

For more information on happenings in the online video market, see the Parks Associates' product the OTT Video Market Tracker, which offers insights into new additions and changes to services and companies in the OTT space, provides detailed profiles of the services available in North America and Europe, and estimates subscribership for those services.


Tags: 4K

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