Content Fragmentation, Not Technology, is Barrier to Widespread Video Streaming

Content fragmentation caused by content rights agreements and release windows is among the non-technical reasons widespread video streaming replicating linear video content offerings is taking so long to reach commercial status.

Technology, as such, no longer is the issue. Instead, it is content rights that are the key barrier. It isn’t so much theatrical release, airline or hotel pay per view or release to retail sales that are the issue.

People sort of understand there is a rolling series of release windows for new movie content, and the process is relatively linear and straightforward, up to the point that the “premium” networks get their first access.

Viewers understand that movies debut in theaters, then move at some point to limited hotel and airline pay per view before their general availability on Blu-ray, DVD and digital services.

But then there is what some might call a hiccup. After about a year after theatrical release, movies can be shown on networks such as HBO, Starz and Epix.

But contracts specify that while a movie is licensed to run on such a channel, it cannot be viewed on any other channel, or on a rival streaming service.

In total, it takes five to seven years for all restrictions to expire, and any movie can be shown on any streaming services that wishes to buy the rights to do so. And HBO alone has rights to about half of all the movies released by major studios in the United States until beyond 2020.

So no streaming service can offer its subscribers “all movies.” That fragmentation will limit streaming growth for quite some time, forcing consumers to buy multiple services to get “most” video content after theatrical release.

In addition to those issues, streaming services themselves work to get exclusivity, as well. In other words, a viewer’s desire for “one service that has everything” conflicts with provider effort to gain marketing advantage by offering what no other provider can offer.

Fragmentation is inevitable, under such circumstances. It might not be elegant, but some consumers will simply buy multiple subscriptions, to get access to more content.