Early moves by content-makers to launch their own straight-to-the-consumer apps appear to have been successful - and are now expanding.
That's an ominous sign for Sky, TVNZ, MediaWorks and any other broadcaster or streaming services that aggregate content from others.
The latest developments have seen Viacom Showtime pull its content from Australian streaming service Stan (owned by Nine), Disney pull its channels from Sky in the UK (as it did early from Sky NZ) to give its own Disney+ a clear run and the HBO Max streaming service debut in the US.
Showtime (along with HBO) supplies a lot of the content that Sky uses for its Rialto channels, its Boxed Sets feature and Neon. We're talking marquee middle-brow shows like Billions, Homeland, Shameless, Vice, Californication, The Affair, Nurse Jackie, Ray Donovan and Dexter.
Across the Tasman, Stan subscribers will lose access to Showtime content - at least through Stan - by the end of the year.
Is Sky concerned that HBO and Showtime could make their apps directly available to Kiwis, cutting out the middleman, as Disney did late last year? We know it is. Sky boss Martin Stewart cited direct-to-the-consumer apps as a threat at a media briefing, where he noted a Disney bundle that offers three of its streaming services Disney+, ESPN+ and Hulu (US TV channel content and general movies) for a killer US$12.99 per month.
The question is "When?" and Sky does not want to share much about its contracts.
This morning, a spokeswoman told the Herald, "We are not aware of any currents plans to launch direct services in this market. Specific details and timing of our contracts are confidential, but we are comfortable that our customers can continue to enjoy the best HBO and Showtime content for some time to come."
However, there's no doubt the way the wind is blowing. Disney said on April 8 that Disney+ had 50 million subscribers, having gained 22 million over the prior two months.
That was no doubt helped by lockdown around the globe. But, still, Disney+ blew away analysts' expectations as it went from standing start to a third the number of Netflix's subscribers in barely six months.
Fifty million subs times US$6.99 means Disney+ is hauling in an astounding US$349 million per month - easily enough to offset fears about lost licensing income from pay-TV providers or aggregated streamers.
How local players are reacting
Here, Spark sold its Lightbox service to Sky in the New Year for $6 million, in favour of concentrating on local sport (an area that the global streaming services have so far shown little interest in, although Amazon's Prime Video is sniffing around). Smart move.
And at Sky, Stewart has doubled-down on sport, concentrating his company's firepower on renewing rugby rights. Again, smart move.
I would call buying Lightbox a dumb move but Sky got Spark's entertainment service for relative chump change - $6 million - and the price included a wodge of current and potential customers (Lightbox had 130,768 active users, including Spark broadband and mobile customer freebies, at the time of the sale) plus a technology platform that Sky adopted for its recent relaunch of Neon.
At TVNZ, CEO Kevin Kenrick highlighted the commoditisation of global entertainment via the likes of Netflix, and direct-to-consumer apps like Disney+, in August 2019 as he revealed a plan to spend 26 per cent or "in the vicinity of $20m" more on local production each year (TVNZ had total programming costs of $186m in 2018).
That's a solid strategy to retain audience but, alas, an expensive one. Local news, sports or drama costs a huge whack more than screening a foreign show - and the shift comes at a time when Google, Facebook and other online players are sucking hundreds of millions out of the New Zealand ad market. Somebody call Nurse Jacky.