Brief:
- French media conglomerate Vivendi will soon shut down its app for mobile-first scripted shows, a company spokesperson confirmed to Variety. The millennial-focused Studio+ app, which this week was removed from Apple's App Store in the U.S., had amassed 5 million subscribers in five countries since its 2016 launch.
- Vivendi's Studiocanal banner will continue to produce short-form shows geared for mobile viewing and distribute them on Mycanal, Canal Plus Group's streaming service, and video-sharing platform Dailymotion. Canal Plus Group also will deliver shows already in production such as Latin America's Telefonica and France's Orange and Bouygues until late 2018-2019, a source told Variety.
- The closure comes shortly after the app creator's departure. Dominique Delport, former executive at Havas Group and head of Vivendi content, created the Studio+ app but left Vivendi to join Vice Media in April.
Insight:
Vivendi's pending shutdown of the Studio+ app comes as Verizon ends its go90 service, a mobile-first video service for tech-savvy millennials that the U.S. telecom giant launched three years ago. The retreat of major companies from mobile video content demonstrates the difficulty in making money from original programming in an increasingly crowded market. Vivendi spent about $35 million to develop Studio+ and its content, which looks like a pittance compared with the $1.2 billion that Verizon invested to develop go90. At the same time, Vivendi announced on Monday that it would attempt to sell up to 50% of its highly profitable Universal Music Group subsidiary in a move to cash in on a resurgence in the music business, The Wall Street Journal reported.
Vivendi was unable to make back its investment with subscription fees that were gradually cut from €4.99 ($5.85) to €2.99 a month, while Verizon struggled to gain viewership and advertisers despite plans "to challenge the fundamentals of the industry," per Ad Age. Facebook, Twitter, Snapchat and Google are among the companies that are ramping up video content to appeal to advertisers and younger viewers, but they also have had their share of difficulties. Facebook, which has more than 2.2 billion users worldwide, has struggled to drive viewership on its Watch video service. The audience numbers for programming produced by ABC, A&E Networks, Discovery and other smaller media companies have disappointed some show creators, while mid-roll ads have alienated many users, sources told The Information.
The profusion of video-streaming services has led many consumers to question the value of paying for a cable or satellite TV subscription that doesn't deliver the content they want on-demand on any device. That same kind of budget-minded attitude may also mean that audiences also want good value from streaming media providers, which now include hundreds of providers in addition to Netflix, Hulu, YouTube Red, Amazon Prime and HBO Now. Disney this year launched ESPN+ to show exclusive sports programming, and next year is expected to introduce a branded streaming service aimed at families. Walmart also is seeking to enter the market with a service that would offering programming that targets Middle America.
The good news is that the market for streaming services continues to grow in the U.S., where 55% of households now subscribe to a streaming service, up from 49% a year ago, a Deloitte study found. That kind of demand may be encouraging to AT&T, which seeks to boost the value proposition of a mobile subscription with a content strategy that most recently culminated in its $85.4 billion acquisition of Time Warner.
