The year TV leaped into the future

Protocol Next Up

Good morning, and welcome to this holiday edition of Protocol Next Up. This week, we're taking a look back at the big TV streaming trends of 2020. I'll also tell you about losing chess games against a 9-year-old.

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The Big Story

The big trends in streaming in 2020

When states issued their first stay-at-home orders earlier this year, one of the first sources of comfort many of us turned to was TV. Streaming TV, to be precise. Netflix, Disney+ and other streaming services saw record subscriber growth, and demand for distraction was so high that Netflix and its competitors briefly were forced to reduce streaming bitrates to keep the internet from breaking.

But 2020 wasn't just about bigger numbers for the streaming industry. We also got to see an acceleration of cord cutting as viewers migrated by the millions from legacy cable; a shift in power as device-makers emerged as the new gatekeepers; and the erosion of long-established theatrical release windows.

Here's a look back.

Explosive growth for streaming services. Disney+ was supposed to reach between 60 and 90 million subscribers by 2024. By early December, it had already surpassed 86 million. Netflix added 28 million subscribers in the first three quarters of the year, surpassing 2019 totals. Comcast's new Peacock service, which only became available to the general public on July 15, already had nearly 22 million consumers signed up by October. With Disney now forecasting 230 million to 260 million subscribers for 2024, it's clear that the streaming world is still expecting a lot of growth ahead.
Cord cutting accelerated. With sports leagues forced to pause their seasons due to the pandemic, the growing popularity of cheap streaming options and massive economic insecurity, 2020 was a perfect storm for the $100 cable bundle. The big pay TV providers are on track to lose a combined 5 million subscribers by the end of the year. The main reason many consumers didn't jump ship was simply that major TV providers paused disconnects due to the pandemic, which is why we'll likely see millions more cut the cord in 2021.
Day-and-date is here to stay. Remember when Netflix was first looking to bring its original movies to theaters a few years ago? The big theater chains all scoffed at the idea, insisting that they would only ever work with streaming services that kept the theatrical release window in place. But 2020 forced the industry to change tune, with both Disney and Warner Bros. now embracing day-and-date releases to varying degrees for 2021 and beyond. And with chains like AMC teetering on the brink of bankruptcy, it's hard to imagine the genie ever being forced back into the bottle.
The new gatekeepers are getting stronger. Amazon's Fire TV platform ended 2020 with more than 50 million monthly active users. Roku added 9 million active accounts in the first nine months of the year, and ended Q3 with 46 million active accounts. With a growing user base, these platforms are increasingly flexing their muscle in business negotiations with streaming services, making demands including a bigger share of subscriber revenue and free content for their free and ad-supported channels. But as these gatekeepers are getting more powerful, they are also bound to attract more regulatory scrutiny in the coming years. Case in point: Following a Protocol report that Google was pressuring TV makers not to license Amazon's Fire TV platform, Indian regulators launched an investigation into the matter.
Ad-supported video became a sleeper hit. All eyes were on subscription services in 2020, but ad-supported video also made some massive gains. Linear TV streaming channels had a moment, with Samsung TV Plus streaming billions of minutes a month and NBCUniversal incorporating these kinds of channels directly into its new Peacock streaming service. Roku brought in roughly $800 million in ad and services revenue in the first nine months of the year, and Fox acquired ad-supported streaming service Tubi for $440 million. In 2021, the industry is looking to further grow ad revenue by targeting audiences around the globe.
And Quibi taught us to love 10-minute shows. Wait, that didn't actually happen.

Long story short, analysts had long predicted that all these things would happen eventually, at some point in the more-or-less distant future. In 2020, that future arrived with a bang.

Overheard

Looking for inspirational quotes to end the year? Tough luck, this was 2020. Instead, I decided to take a look at what was popular in streaming this year:

The most popular movie in the U.S. this year, according to streaming media aggregator JustWatch, was … drumroll … opening up the envelope … building suspense like Jane Fonda ... "Parasite." Well deserved.
The Top TV show on Netflix this year, based on the number of times it was included in the service's Top 10 list, was "The Office," as calculated by Reelgood.
Interestingly, that picture changes if you also take the ranking in that Top 10 list into account. Based on this, the most popular show on Netflix actually was "Cocomelon." "The Office" still came in second, though.

A MESSAGE FROM AMAZON FIRE TV

The lockdowns this year have transformed our homes into offices, schools, concert halls, movie theaters and gyms. Our homes are working harder for us, but so is our technology. The device that is working the hardest is perhaps the TV—becoming our lifeline to a far more virtual world.

Learn more.

Watch Out

If you've subscribed to Next Up for a while, you may know Watch Out as the spot where I tend to geek out and write about things like mind-reading wearables, ATSC 3.0, the AV1 video codec, AI dance videos and voice cloning. The next next big things, still under the radar but with the potential to have a profound impact on tech and entertainment.

On this Christmas Eve, I wanted to take this opportunity to instead thank all of you for giving Next Up a chance. And in the spirit of the holidays, I now dohave two things to wish for:

I'd love to hear from you! Not just pitches, though those are welcome, but especially with requests for new stories. Do you want me to write more about AR, VR or AI? To dive deeper on the tech behind some of the most popular streaming services? Should Next Up have more codec stories, or take a closer look on what's new and what's next in consumer electronics? Please let me know: janko@protocol.com
Next Up's readership has been off to a great start, but there's always room to grow, and I believe that there are many more people working in the intersection of tech and entertainment that could benefit from this newsletter. With that in mind, I'd like to ask you, dear reader, to recommend it to just two or three of your colleagues, friends and contacts. Bonus points if you tweet about Next Up!

Thanks so much!

Fast Forward

There's not much news happening this holiday week, so I decided to instead highlight some of my favorite tech and entertainment stories published on Protocol this year. Here goes.

Hulu deepfaked its new ad. It won't be the last. To produce an ad featuring top athletes during the pandemic, Hulu relied on AI video manipulation.
Q&A with Niantic COO Megan Quinn. The Pokémon Go maker's new chief operative thinks consumer AR glasses are just around the corner.
Inside the collapse of Daqri's $300 million bet on AR. Lots of money. A fancy demo. What could possibly go wrong? A lot, as it turned out.
How Google kneecapped Amazon's smart TV efforts. Read about the ways Google has tried to keep TV makers from teaming up with Amazon.
Inside YouTube's plan to win the music-streaming wars. Google Play Music is dead. Long live YouTube Music?
How Netflix reinvented its marketing on social media. Meet the people running Netflix's social accounts for Black, Latinx, LGBTQ+ and other subsets of its audience.
Location-based VR may not survive the pandemic. The Void, Sandbox VR and others have been hit hard by the forced closure of their VR centers.
Andrew "Boz" Bosworth on VR's iPhone moment and Facebook's big bets. A Q&A with the executive leading Facebook's AR and VR hardware efforts.
Here's what's next for Sonos. 2020 was a pivotal year for the smart speaker maker. In January, CEO Patrick Spence revealed some of his plans to our readers.
How Discord (somewhat accidentally) invented the future of the internet. You may think of Discord as a place to chat about and during video games. But it's much more.

Auf Wiedersehen

With nowhere else to go, I spent a lot of time watching TV at home this year. Like everyone, I watched "Tiger King," but barely remember it by now. I also finished "Schitt's Creek," "Ozark" and "Unorthodox," truly enjoyed "Giri/Haji," "Tales From the Loop" and "Pose," and finally got into watching "The Man in the High Castle." But the award for the show that had the most profound impact on my life right now easily goes to "The Queen's Gambit," which got me to play more chess than I have since high school. I'm still a terrible player, but thanks to Beth Harmon, I am getting better. Or rather, thanks to an AI version of Beth Harmon that you can play for free on Chess.com. It's a lot of fun — even if you are getting beat by an AI impersonating a 9-year-old.