Subscription video-on-demand services continued their ascent this year, with top players Netflix Inc., Amazon.com Inc.'s Prime Video and Hulu LLC all augmenting their programming spending and boosting their subscriber rolls.

	2019 Outlook:
	NAB CEO not expecting passage of major broadcast legislation in 2019 NAB CEO expects Next Gen TV in stores before next Olympics Analysts weigh Charter's next move in 2019 as M&A integration winds down Previous wave of pay TV M&A sets stage for operators' 2019 initiatives Virtual providers eye 2019 growth, despite slowdowns from top 2 players

Projections by Kagan, a media research unit within S&P Global Market Intelligence, indicate that there should be nearly 168 million aggregate over-the-top video subscriptions in the U.S. by the end of 2018, generating some $13 billion in subscription revenues. New services — from ESPN Inc., AT&T Inc.'s Turner Sports and Crown Media Family Networks — gained traction appealing to sports fans and those attuned to family-friendly entertainment. CBS Corp.'s CBS All Access and Showtime OTT continue to exceed initial estimates in terms of subscriptions.

Looking ahead, Kagan estimates there will be 208 million aggregate OTT video subscriptions in the U.S. by the end of 2022, reflecting a 5.6% CAGR advance, with associated revenues expected to reach $17.5 billion at that point, a CAGR growth rate of 7.6%.

Those gains will include contributions from Walt Disney Co. and AT&T's WarnerMedia's direct-to-consumer, or DTC, entries, which are slated to hit the market in the fourth quarter of 2019, as well as a new digital video service from Apple Inc. that will showcase original content.

Moreover, NBCUniversal Media LLC President and CEO Steve Burke hinted at plans for Comcast Corp.'s programming arm to launch an over-the-top service in 2019 as part of the company's online TV strategy.

Comcast CFO Michael Cavanagh speaking at an investor conference earlier this month suggested that the company is already working on its direct-to-consumer offer. However, the operator does not plan to emulate the offering from Netflix, but rather will look to capitalize on "all that we're good at. We think it's an interesting and dynamic ecosystem that we're intending to participate in a bunch of different ways. Our own DTC will just be one avenue."

CBS President and Interim CEO Joe Ianniello said on the company's third-quarter earnings call that CBS will likely achieve its goal of reaching a combined 8 million customers for its CBS All Access and Showtime OTT services in 2019, a year ahead of schedule, en route to 16 million by 2022. He also said that All Access Canada has gotten off to a solid start. An Australian version, 10 All Access, including local programming from Network 10, which CBS acquired in the fourth quarter of 2017, launched Dec. 3.

Disney, WarnerMedia gear up for direct-to-consumer launches

When Disney+ launches next year, it will be centered on original and library fare under five headings: Disney, Pixar, Marvel, Star Wars and National Geographic. The latter will become part of the media giant through its pending acquisition of most assets of 21st Century Fox Inc., which is expected to close during the first half of 2019. Disney will provide more insight into its DTC strategy and a first look at the product at an investor's day in April.

AT AT&T's Nov. 29 investor meeting, WarnerMedia CEO John Stankey outlined the company's DTC thinking. Without specifying content or pricing, Stankey said it will offer three components: an entry-level, movie-centric offering; a middle tier with original content, plus theatrical blockbusters; and a more robust package with deeper library and theatrical content, focused on classics, kids-and-family fare and comedy.

"We understand that this product has to be good enough to be part of the essential consumer set that somebody thinks about when they spend that $150 a month," Stankey said, referring to AT&T's research indicating that U.S. households spend $300 monthly for content and connectivity, evenly split between communications and entertainment services. The company's preference is that consumers would buy all three levels of service, but it is providing a low-cost entry point, Stankey said.

To license or not to license

In a recent research note, MoffettNathanson analyst Michael Nathanson noted that after passing through theatrical and broadcast release windows, almost all of Disney and Fox film and TV productions will be found on Disney+ and Hulu. Conversely, the analyst said AT&T's decision to create three new alternative DTC products, while continuing to license content to third parties, like it did with a $100 million renewal with Netflix for "Friends," is "a major strategic error."

The research firm believes that the company would be better served to use the HBO / Cinemax (US) brand and app as its single global platform and populate HBO Now and HBO Go apps with library fare like "Friends," "The West Wing" and other shows from Warner Bros.' expansive TV library.

BTIG analyst Rich Greenfield in a blog post, though, said Disney and AT&T may be too late to the DTC party, noting that by the time their new services launch in the fourth quarter of 2019, Netflix will not only be 13 years ahead, but it should have 64 million U.S. and 175 million global subscribers. That, he said, puts the legacy media player at a tremendous scale and data/knowledge disadvantage, not to mention having to deal with customer acquisition, churn, customer care and distribution technology.

He said the only way for legacy media companies to compete in the SVOD space is to go all in with content, "something they remain unwilling to do," pointing to the "Friends" renewal with Netflix.

Streaming sports strides

It was a busy year on the streaming sports front. ESPN's ESPN+ bowed April 12 and crossed the 1 million paying subscriber mark Sept. 20. Offering 10,000 live events, the service could continue its expansion in 2019 as it adds UFC mixed martial arts action to its lineup.

Turner Sports also got into the streaming game with Bleacher Report Live, or B/R Live, whose primary property is UEFA Champions League, in April. The service, which is adding ONE Championship, the world's largest martial arts organization and the biggest global sports media property in Asia to its portfolio in January 2019, suffered a technological hit with its presentation of "The Match," a competition between golf notables Tiger Woods and Phil Mickelson in November, resulting in refunds for the pay-per-view event.

DAZN, the Perform Group Ltd.'s sports streaming service will enter a ninth nation, Brazil, in March 2019, with various soccer rights. In the U.S., DAZN debuted in September with mixed martial arts and boxing fare.

For its part, Crown Media Family Networks' Hallmark Movies Now is pushing toward the 600,000 subscriber mark, lifted in part by holiday-themed movies under the "Movies & Mistletoe" banner. The service offers archival telefilms and series fare that is non-duplicative to main linear services, Hallmark Channel (US) and Hallmark Movies & Mysteries (US).