Correction to Video Streamers Story From Aug. 18

By Covey E. Son Features Dow Jones Newswires

Walt Disney Co.'s decision this month to stream its own movies and shows marks Hollywood's latest -- and biggest -- attempt to wean itself from Netflix Inc.

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In the shadow of Netflix's boom, smaller services have been finding niche audiences who appreciate such genres as horror and anime -- or themes such as British shows or automobiles -- but are unsatisfied by mainstream general entertainment sources like Netflix and Hulu.

None of these boutique sites, such as Shudder and Crunchyroll, matches Netflix's sprawling library with thousands of popular titles nor its subscriber base of 104 million, which media-measurement firm comScore says represents 75% of U.S. streaming-service viewers. Rather, they are seeking to stand out by offering a hand-picked platter of content.

"Fans feel they can go deeper in contrast to a big service, whether that's a broadcast network or a mass-market subscription video service that's trying to have something for everyone," said Christopher Vollmer, a partner at PricewaterhouseCoopers's entertainment and media practice.

Some avoid the mainstream entirely. MUBI Inc. offers "arthouse cinema" -- foreign films, independent films and classics. The company shows just 30 films at any given time, with a new one added and another removed each day. The closely held company has 100,000 subscribers who pay $4.99 a month, said MUBI director of content Daniel Kasman.

Netflix isn't a direct competitor, Mr. Kasman said, and even some of the most devout cinephiles often find themselves stumped by MUBI's selection of obscure and unknown films. He and two other curators frequently visit film festivals including Cannes and Sundance to scout for new material, working directly with filmmakers and small distributors to buy streaming rights.

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Mr. Kasman said he seeks movies that are important to MUBI's audience. "It can be something that touches you, expand your mind or show you new places or new stories you've never thought of before," he said. "It might be something that makes you laugh. It might be a classic and a favorite of yours."

Then there's Brown Sugar, which bills itself as "just like Netflix, only blacker," featuring a collection of 1970s films starring black actors in lead roles, like "Shaft" and "Uptown Saturday Night." Bounce TV, a broadcast network catering to a black audience, launched Brown Sugar in November to celebrate the era in which Hollywood started offering lead roles to black actors. Bounce's parent company, Katz Broadcasting, which was acquired by E.W. Scripps Co., didn't disclose subscriber figures for its $3.99-a-month service.

Video streaming as a whole -- getting shows and movies on demand via the web -- is soaring. Revenues tripled for subscription video-on-demand since 2012 to over $8.2 billion last year, according to a PricewaterhouseCoopers report. Netflix reported $5 billion in U.S. streaming revenue last year. PwC projects the market will reach $14 billion in 2021.

Although Nextlix is expanding in genres such as children's fare, reality TV and stand-up comedy specials, PwC's Vollmer said Netflix wasn't likely to emphasize niche fare, but rather a "something for everyone" approach.

That leaves room for others.

AMC Networks Inc., for example, dove into the horror market in 2105 with Shudder, a spooky-flicks-only streaming service. Its selection ranges from the iconic "Friday the 13th" to lesser known titles and foreign productions.

Matt Faure, a 44-year-old logistics professional in Redmond, Wash., said he typically watches a movie a day on Shudder.

Mr. Faure said it's a different experience than browsing Netflix for horror, where its selection is largely filled with newer, more popular flicks. He likes those too, but he's more interested in discovering the arcane and unknown, like a German film called "Necromantic."

"I'm more impressed by somebody who reaches back and takes some of the older and more obscure films," Mr. Faure said.

Services like Shudder offer value to fans who are less interested in a broad selection of videos or something to supplement their Netflix fare, PwC's Mr. Vollmer said. Shudder, which declined to disclose its number of subscribers, costs about $4.99 a month, compared to about $8 a month for Netflix.

Netflix declined to comment.

Crunchyroll, owned by a joint venture between AT&T Inc. and Hollywood veteran Peter Chernin's Chernin Group, has become the go-to anime streaming hub for a million paid subscribers who pay $6.95 a month. In January, the company launched VRV, a service that bundles Crunchyroll and other related subscription video services together for "super fans" looking to save on their favorite channels.

The Enthusiast Network, a trade-magazine publisher owned by hedge fund GoldenTree Asset Management LP, sought to imitate Crunchyroll with an "eight-figure bet" on Motor Trend On Demand in 2015, Chief Executive Scott Dickey said. Today, 100,000 gearheads are subscribed for $4.99 a month or $49.99 a year. They come to the channel for a dozen originally produced automobile shows and live streams of racing events.

Earlier this month, the Enthusiast Network, known as TEN, announced a joint venture with Discovery Communications Inc.

"We knew video was coming and it was coming fast and furious," Mr. Dickey said. "We had a really unique environment at TEN where our core business was declining ... We had to place bets and we had to place bets quickly."

Walt Disney Co.'s decision this month to stream its own movies and shows marks Hollywood's latest -- and biggest -- attempt to wean itself from Netflix Inc.

In the shadow of Netflix's boom, smaller services have been finding niche audiences who appreciate such genres as horror and anime -- or themes such as British shows or automobiles -- but are unsatisfied by mainstream general entertainment sources like Netflix and Hulu.

None of these boutique sites, such as Shudder and Crunchyroll, matches Netflix's sprawling library with thousands of popular titles nor its subscriber base of 104 million, which media-measurement firm comScore says represents 75% of U.S. streaming-service viewers. Rather, they are seeking to stand out by offering a hand-picked platter of content.

"Fans feel they can go deeper in contrast to a big service, whether that's a broadcast network or a mass-market subscription video service that's trying to have something for everyone," said Christopher Vollmer, a partner at PricewaterhouseCoopers's entertainment and media practice.

Some avoid the mainstream entirely. MUBI Inc. offers "arthouse cinema" -- foreign films, independent films and classics. The company shows just 30 films at any given time, with a new one added and another removed each day. The closely held company has 100,000 subscribers who pay $5.99 a month, said MUBI director of content Daniel Kasman.

Netflix isn't a direct competitor, Mr. Kasman said, and even some of the most devout cinephiles often find themselves stumped by MUBI's selection of obscure and unknown films. He and two other curators frequently visit film festivals including Cannes and Sundance to scout for new material, working directly with filmmakers and small distributors to buy streaming rights.

Mr. Kasman said he seeks movies that are important to MUBI's audience. "It can be something that touches you, expand your mind or show you new places or new stories you've never thought of before," he said. "It might be something that makes you laugh. It might be a classic and a favorite of yours."

Then there's Brown Sugar, which bills itself as "just like Netflix, only blacker," featuring a collection of 1970s films starring black actors in lead roles, like "Shaft" and "Uptown Saturday Night." Bounce TV, a broadcast network catering to a black audience, launched Brown Sugar in November to celebrate the era in which Hollywood started offering lead roles to black actors. Bounce's parent company, Katz Broadcasting, which was acquired by E.W. Scripps Co., didn't disclose subscriber figures for its $3.99-a-month service.

Video streaming as a whole -- getting shows and movies on demand via the web -- is soaring. Revenues tripled for subscription video-on-demand since 2012 to over $8.2 billion last year, according to a PricewaterhouseCoopers report. Netflix reported $5 billion in U.S. streaming revenue last year. PwC projects the market will reach $14 billion in 2021.

Although Nextlix is expanding in genres such as children's fare, reality TV and stand-up comedy specials, PwC's Vollmer said Netflix wasn't likely to emphasize niche fare, but rather a "something for everyone" approach.

That leaves room for others.

AMC Networks Inc., for example, dove into the horror market in 2105 with Shudder, a spooky-flicks-only streaming service. Its selection ranges from the iconic "Friday the 13th" to lesser known titles and foreign productions.

Matt Faure, a 44-year-old logistics professional in Redmond, Wash., said he typically watches a movie a day on Shudder.

Mr. Faure said it's a different experience than browsing Netflix for horror, where its selection is largely filled with newer, more popular flicks. He likes those too, but he's more interested in discovering the arcane and unknown, like a German film called "Necromantic."

"I'm more impressed by somebody who reaches back and takes some of the older and more obscure films," Mr. Faure said.

Services like Shudder offer value to fans who are less interested in a broad selection of videos or something to supplement their Netflix fare, PwC's Mr. Vollmer said. Shudder, which declined to disclose its number of subscribers, costs about $4.99 a month, compared to about $8 a month for Netflix.

Netflix declined to comment.

Crunchyroll, owned by a joint venture between AT&T Inc. and Hollywood veteran Peter Chernin's Chernin Group, has become the go-to anime streaming hub for a million paid subscribers who pay $6.95 a month. In January, the company launched VRV, a service that bundles Crunchyroll and other related subscription video services together for "super fans" looking to save on their favorite channels.

The Enthusiast Network, a trade-magazine publisher owned by hedge fund GoldenTree Asset Management LP, sought to imitate Crunchyroll with an "eight-figure bet" on Motor Trend On Demand in 2015, Chief Executive Scott Dickey said. Today, 100,000 gearheads are subscribed for $4.99 a month or $49.99 a year. They come to the channel for a dozen originally produced automobile shows and live streams of racing events.

Earlier this month, the Enthusiast Network, known as TEN, announced a joint venture with Discovery Communications Inc.

"We knew video was coming and it was coming fast and furious," Mr. Dickey said. "We had a really unique environment at TEN where our core business was declining ... We had to place bets and we had to place bets quickly."

Corrections & Amplifications

This article was corrected August 28, 2017 at 3:57 p.m. ET because an earlier version 18 incorrectly said MUBI cost $4.99 a month.

MUBI, an online streaming service focusing on arthouse cinema, costs $5.99 a month. "Skirting Netflix: Video Streamers Serve Up Horror, 70s Fare, Anime" on Aug. 18 incorrectly said it cost $4.99 a month.

(END) Dow Jones Newswires

August 28, 2017 16:11 ET (20:11 GMT)