FX, the cable and television channel, recently announced the decision to release a subscription service called FX+. The channel, a subsidiary of the mass media company 21st Century Fox Inc. (NASDAQ: FOXA) will offer its new subscription service on cable networks for $5.99. The launch of such a service comes in the wake of rising popularity with streaming services such as Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN), which offer a plethora of different shows based on consumer demand.
FX+, a pay-per-view subscription service, will offer hit shows like "American Horror Story" and "Atlanta" without advertisements. In doing so, FX desires to provide all its programming on one readily available device: the television. Given that most FX shows are broadcasted on television, viewers will now be able to watch their shows on demand without using alternate services such as Netflix, Amazon or Hulu. The avoidance of other streaming services such as Netflix will give FX full control of the distribution of tv shows. This may be particularly beneficial for the television channel, which is currently the biggest supplier of popular shows on Netflix and Hulu. Last year, FX sold the right to re-run one of their most popular show, "American Crime Story: The People v. O.J Simpson", on Netflix.
FX President Landgraf, a long-time opponent to streaming services like Netflix, asserts that FX "shouldn't be licensing exclusively." The executive continued to explain the presence of FX shows on Netflix, stating that he "may not be in control of the decision to license every show FX makes because not all are produced and owned by FX Productions." Due to the already diversified line-up of FX shows, with some shows owned by other production companies, FX faces an obstacle of making its shows exclusive to FX subscribers. The presence of easily accessible streaming services like Amazon exacerbate this obstacle to maintain viewers for the cable channel.
The cable television channel isn't the only one to create its own service to compete with popular streaming services like Amazon. Earlier this year, the mass media company Disney (NYSE: DIS) announced the end of their deal with Netflix over distribution; instead, the multinational company will begin its own streaming service in 2019. As a result of a stake held in BAMtech, a video streaming technology, Disney will be able to offer its own service to distribute shows exclusively to its own subscribers. Other companies that are introducing their own services are the entertainment company AMC Networks Inc. (NASDAQ: AMCX) and 21st Century Fox through streaming its originals exclusively for subscribers. Unlike Disney, however, these networks are subject to cable networks only, and will be unable to provide their shows through a fluid streaming service for the time being. For consumers however, this means that they will have a greater variety of choices to choose from, although they may have to choose which services they desire to save on cost. As for popular streaming sites such as Netflix or Hulu, executives may have to churn out new shows to offset the decreasing number of licensed shows from other networks.