James Kotecki (00:00): 

Hi, it's James Kotecki here to tell you about my favorite part of CES, C Space. C Space at CES is where leading brands come to discover disruptive trends and how those trends are shaping the future of advertising, brand marketing, and entertainment. Be a part of CES; promote your brand through curated experiences and connect with influencers, prospective partners, executives, and industry leaders. If you have a product or technology that changes the way consumers behave, C Space is the place for you. So go to ces.tech/cspace and learn more. 


This is CES Tech Talk. I'm James Kotecki. CES 2024 is January 9th through 12th in Las Vegas and it's time to build the hype. So let's get smart about the world's most influential tech event. 


Today we dive into consumer entertainment trends that will shape CES 2024 and beyond. And who better to guide us through this world than Jessica Boothe, the director of market research at the Consumer Technology Association, the producers of CES and this very podcast. Also joining me is Andrew Wallenstein, president and Chief Media Analyst of the Variety Intelligence Platform, that's Variety's subscription service for analysis of the entertainment industry. So I spoke to Andrew early this year in the C Space studio at CES 2023, but now we are deep into the summer. Writers and actors are on strike. Companies are making plans for CES 2024, but what kind of entertainment future should they expect? 


Andrew, Jessica, thank you for gazing into the crystal ball with us. Welcome to the show. 

Andrew Wallenstein (01:55): 

Good to be here. 

Jessica Boothe (01:56): 

Thank you James. 

James Kotecki (01:58): 

So Jessica, you're looking at these trends for the Consumer Technology Association. It feels safe, seems safe to say that from a consumer perspective, it's all about streaming. That's the future. Is that true, and can you give us some data points just to help us ground this conversation? 

Jessica Boothe (02:16): 

Absolutely. And I will say I was kind of stunned by the numbers in a good way. Throughout the year we're tracking ownership, purchase intent, and we're looking at a lot of different consumer data points. And in our July sales and forecast, we specifically looked at the streaming numbers. And at that point where we saw that consumers were planning to spend 46.5 billion, billion with a B, on streaming services. And I am not ashamed to admit, I'm feeding into that number myself. I'm sure you guys are as well. But I think that's a really exciting number and shows that consumers are really engaged with streaming services. 

James Kotecki (02:51): 

Do you have a sense of how many of these the average person actually streams? I have Netflix, I have Hulu, I have Disney Plus, Max, Paramount, all these things. 

Jessica Boothe (03:00): 

I don't know how many people have, maybe Andrew might have a number of how many they actually have. But I was just saying holistically the 46.5 billion is a great number that we're seeing that consumers are leaning into. And we're actually going to see that grow in the upcoming year to 48.5. So we really are seeing that consumers are adapting and really like that streaming technology and are continuing to consume a lot on their mobile, their television, and really buying a lot of devices that are helping them consume. 

Andrew Wallenstein (03:34): 

I know I've seen a lot of different stats in terms of how many services per household, and depending on what you look at that number deviates a bit. I believe the one I saw back a number of months ago from Deloitte said it was about four, 4.5 per household. 

James Kotecki (03:57): 


Andrew Wallenstein (03:57): 

I'd be surprised if it goes further up than that, because that's a big number. 

James Kotecki (04:03): 

And there's so much content out there. So obviously we've got this huge growth in streaming. The future looks bright if you're just from the perspective of who though, right? Because Andrew, as you digest this data, as you think about that number, that huge number, and you look at it through the lens of the entertainment industry, how do industry leaders feel about this trend towards the streaming future as we stand here in the middle of 2023? 

Andrew Wallenstein (04:29): 

Well, let's drill a little deeper than that big top line number. And I think there may be some more troubling trends, especially as I sit here in Los Angeles where we're a few weeks into two strikes. And things do look a little bleecker regardless of whether you're a streaming service, you're a television network, you're a movie studio. I think the streaming services are at a point right now where there is some maturation going on to those services. I don't think we're going to see much more growth, at least at the rate that we've seen in recent years. I think you're going to see, probably coming out of those strikes, which, they could last for a while. I think regardless of how long they last, my guess is you're going to see the pricing coming out of the strike for these streaming services really start to get up there. And I think that will affect the growth of the streaming services. 


And so we may very well be seeing right now in that 46, or as Jessica said that we could see it get to 48, I doubt that number is going to continue to grow at much higher a pace for too much longer. So let's enjoy the good times while they're there to be had, I guess I'd say. 

James Kotecki (05:55): 

When the streaming trends really seemed to kick off a few years ago, and I remember I've been talking about this at CES C Space Studio for several years in a row, so it's been going on for a little while. There was a lot of optimism. A lot of uncertainty and a lot of optimism. Streaming is the future. We all have to be in it. Let's invest a ton of money, let's put tons into the amount of content that we have. Let's get super high quality content out there, people flock to these services, and eventually we'll all be profitable, was the hope and the expectation. Did something change in the underlying reality here? What was missed? What changed? What should have been anticipated? Was it something else? 

Andrew Wallenstein (06:35): 

Yeah, something changed. It's called everything. COVID I think actually was a bit of a boost for the streaming service and I think accelerated growth artificially to some degree. And what happened was, first of all, I think Wall Street woke up to the fact that profitability was more important than just growth for growth's sake and the carte blanche that these companies had to just grow by any means necessary, spend whatever you want, simply wasn't allowed anymore. And I think that was somewhat triggered by the fact that Netflix actually started in 2022 to see some declines, and that was really what brought in this new austerity that is still with us to a large degree. 


And then you've got these strikes. Even before the strikes, just in anticipation of the strikes, which did not catch this industry by surprise, an austerity came in. The peak TV phenomenon of spending hundreds and hundreds of series well before the strike, the brakes were starting to be applied. And we are heading into a very, very different climate. We're well into that climate right now, and I think we're going to see a very different set of rules applied to just about every aspect of the business. Wouldn't you say Jessica? 

Jessica Boothe (08:08): 

I would agree. I think that seeing where Netflix is applying different pricing structures, I think that's going to be interesting as we watch the strike, and then see how the password crackdown and all of these different elements are playing into the streaming service model right now. I think that in itself with how streaming content shuffles right now, so we see a lot of shuffling with what they're actually putting out there, versus what they have in reserve. So we do have a lot of content that's backed up, so they do have a lot of reserve that they can push out for consumers. I think we're going to see a lot of binging of older content right now that will protect what they can push out to consumers. 


But again, we're going to have that tier-based approach coming out and I think that'll protect the pricing model for a lot of these streaming services and we'll continue to see that help. 

James Kotecki (09:03): 

And is this kind of a victims of their own success situation here? In the sense that for years, I think if you ask anyone who even really likes watching TV, there's just too much TV to watch. There's too many movies coming out to watch. They're all great. There's so many critically acclaimed things on all these different streaming services. I've never gotten a chance to catch up. And now we're well beyond COVID obviously, so people aren't maybe spending as much time with their screens as they were at maybe at the peak of that lockdown phenomenon. So I want to push on this question a little bit more of, is this a genuine concern or fear or just a real thing that's going to happen, where consumers may not necessarily notice if there's a slowdown in the amount of streaming content that's coming out either for austerity reasons or strike reasons? Because they can just go watch so much other stuff that's relatively recent, still looks as good as the stuff that they're used to watching, and they can just finally catch up on all of these things. Andrew, what do you think? Do consumers care? 

Andrew Wallenstein (09:57): 

I think there's a near term question and a longer term question. I think in the near term it's not going to be as noticeable. I think, first of all, the strike's really going to impact scripted content more so. Unscripted content won't be as affected, international, documentary, sports. So over the summer I don't think there'll be much an of impact. As we get into the fall, I think you'll start to see somewhat of an impact, more so in linear or broadcast television. 


Depending on how the strike continues to last, and it could easily last through the end of the year in my opinion, I do think you'll start to see an impact. Yes, to your point, I think you will see an embracing of the catalog content, very deep catalogs, that are on these streaming services. You're already starting to see. I just saw a stat today that Suits is on, I think Netflix and another streaming service, and that's an old USA show. Meghan Markle, I think what made her famous before getting married to Prince Harry, is setting a record. Just incredibly embraced, and speaks to the power of catalog content. 


But I do think as we get into a new year, if we still are in a strike area and you start to see really big scripted shows not making their way fast enough to these streaming services, you better believe it will start to impact even those services. So again, a short-term and a long-term impact. 

James Kotecki (11:37): 

Jessica, what do device manufacturers, the folks who are putting on the huge exhibits at CES, make of all this, the shakeup, this potential slowdown, in the streaming business? Is there a concern that that could hurt sales of these things? Are they doing something about marketing or designing or selling them in a way that is different because of the differences that are maybe coming up in the way that these things are actually streamed? 

Jessica Boothe (12:02): 

So we aren't seeing necessarily a slowdown in how they're being shipped and/or designed. I think that we're still seeing strong positioning in terms of those products going out. So just this year when we did our ownership and market potential, we saw that 63% of people indicated they owned a streaming media device. That was up eight percentage points from last year. So again, a strong foothold within the US household of streaming media devices. And that's where people are still continuing to, again, watch streaming media. And of that, 25% of people are indicating that they're going to continue to buy streaming media devices. And that is again upgrading and going in their second or third televisions. 


We're also seeing continued growth in our smart TVs. So internet abled TVs are up to 74% ownership in households, which is about 92 million households indicating that they have a smart TV. 


So again, a lot of consumption. I don't see that there's a change in what manufacturers are doing. I think they're still continuing to build, I think they're still continuing to ship out and consumers are still consuming and wanting to purchase those type of items. To Andrew's point, I don't think there's going to be a short term effect. I think consumers are still going to want to purchase and have these devices ready, because they know in the long term the content is going to be there. 

James Kotecki (13:23): 

And I assume that's also going along with internet speeds just continuing to increase or the availability of broadband for folks being able to buy multiple devices and then stream in multiple rooms. You got the kids on their iPads, you got the parents in the other room watching something else, you got somebody else gaming in the next stream over. 

Jessica Boothe (13:38): 

Exactly. I think that we are continuing to watch as broadband continues to speed up. But I also think there's another interesting point that you bring up about how people are consuming their content. So we talk generally about smart TVs and we talk about streaming media devices, but we are seeing a new generation that is consuming content differently. So specifically thinking about Gen Z, in their households, among those who are 18 plus, they're not necessarily buying as many TVs. They have a 68% ownership of TV versus the 87% of households total owning a television. So there is a different ecosystem of people watching TV or streaming content differently. So I think that is something that everybody's watching right now is, how the up and coming generation Gen Z, will be watching this content. Because they're not necessarily sitting in front of a TV to consume. 

James Kotecki (14:31): 

And of course, Gen Z probably more than previous generations, although I think all of us are doing this to some extent, is also consuming a lot of YouTube content, user generated content. And Andrew, I wonder, do the distinctions between what it means to be a Netflix show or an HBO Max show with a certain kind of quality element to them, do those distinctions start to blur, especially for younger generations that are used to watching stuff on YouTube? And oh by the way, the ability to create really good content yourself and put it up on YouTube and make it look pretty good compared to the stuff you might see on one of those other premium brands, is also continuing to improve. 

Andrew Wallenstein (15:09): 

Not only do I think that's an incredibly important question, I think it's also a very overlooked, underestimated question here in Hollywood where there's such a reflexive, "Oh, premium content is so much more important." And that's not necessarily the case for a Generation Z that does spend so much more of their time on TikTok and other related platforms with short form content. And as the parent of a 15-year-old, I could also tell you that they sometimes will watch that content on the big television. Not that often, but sometimes they do. 


And I would also add, what's also interesting in terms of the living room's screen is, I spent some time this year with executives at Amazon talking about Fire TV and what their hopes are for that. And the thing to keep in mind with younger generations, to Jessica's point, may not necessarily look to that device in the living room for entertainment as much as they do a mobile or laptop. Amazon, and other players in this space as well, don't just design that living room set for entertainment anymore. They're looking at it as a hub for more than just entertainment. For things like home security, the smart home hub that controls so much more than entertainment. And if they get that right, man, there's a huge opportunity there that's so much more than entertainment. And suddenly you're talking about a much bigger market. And I think it's way too early to know whether they're nailing that market. But if they do, it's a bigger game. 

James Kotecki (17:14): 

Speaking of the economics of all of this, we need to talk about the advertising component. Increasingly, streaming services are incorporating advertising based tiers into what they're offering to folks. I talk to advertisers every year at CES. It's obviously increasing levels of sophistication and excitement about what folks are able to do as far as targeting precise people, precise demographics, with precisely what they want at the precise time. Jessica, does your research cover any trends in that space relative to the devices where these ads are appearing? 

Jessica Boothe (17:47): 

The one area that I'm very interested in is device-related ads. So as the different streaming surfaces come out with tiers that have ads in them, and/or as they have the different tiers as prices might increase, are consumers interested in a device that has an ad bar that would supplement these different streaming services. So, would that be something that they have an appetite for to really help them as they look to make the most out of their budget. 

James Kotecki (18:19): 

Okay. So I've bought a smart TV and in the corner there's this always on ad, that I have accepted as basically, I can get a cheaper TV if I get one that just always has an ad in the corner. Is that what you're saying? 

Jessica Boothe (18:31): 

Correct. And/or no cost of the TV, as long as they're watching ads. So is that something that a consumer has an appetite for again, to support their consumption habit of streaming? Is that something that they would be willing to go for? I think there are different companies toying with that idea right now. 

James Kotecki (18:52): 

Andrew, what's the industry think about the role of ads in the future of all this? Is there is a potential here for that to be the savior of this business? Is that what's going to bring these things to a state of relative stability? 

Andrew Wallenstein (19:09): 

I think original equipment manufacturers who are playing in this game really have quite an ace in the hole here in terms of screen level data, what they're able to do with automated content recognition. You're talking about companies like Vizio, so many others, that have data. The fact that they have this data that they could sell advertisers, really changes the economics of their business. It enables them to sell the television, and it changes the margins that they could expect to sell that television at. Not that they could give it away for free, but it really changes the game. And I would keep an eye on an interesting new company called Telly that has really taken a very different approach, where they actually sell the television with a second... Actually maybe they don't even sell it. I think it might give it away for free. 

Jessica Boothe (20:11): 

It's for free. 

Andrew Wallenstein (20:12): 


Jessica Boothe (20:12): 

It's for free. 

Andrew Wallenstein (20:13): 

And it has a second smaller screen that constantly has an ad in it. I haven't seen it yet. I'm going to test it soon actually. And it's like you got to wonder whether these guys are onto something here, whether this could actually be the new model for television. And it's going to be a fascinating thing to see how this impacts the marketplace. It's really innovative. 

Jessica Boothe (20:39): 

I think it's an interesting model because it doesn't take away from the screening experience. They can still see the entire screen of the television. But to your point, the ads are on a second screen. So again, will it supplement the consumer in their budget, because they don't have to pay for a device at that point. 

James Kotecki (20:53): 

I would like to think that we have a relatively sophisticated audience listening to this, and of course folks who are listening to this particular episode may be particularly versed in the worlds of advertising and streaming. So they may have a slightly different perspective. But I'm just thinking of the average person listening to this conversation. A certain percentage of folks are going to hear what we're talking about and think it sounds relatively scary. It's kind of a black mirror-ish, ads always on kind of thing. Of course we're always being advertised to all the time anyway, so maybe we're already there. But Jessica, what do you know about consumers acceptance of these additional ads in these places? Inviting an ad into my home essentially to always be there 24/7 or however they're doing it. Or maybe just when the TV's on. Are consumers coming to basically accept this? 

Jessica Boothe (21:39): 

I do think it's becoming commonplace in the household. We do have a lot of ads being pushed at us all the time. I think it's trying to get to a point where from an advertiser's perspective that we're actually getting attention for it. 

James Kotecki (21:39): 


Jessica Boothe (21:51): 

So, how do we continue to get the consumer's attention? Because is it just that it's there and consumers have blocked it out? I think that's where the personalizations come in. And we try to get people to understand is that Telly Bar speaking to them? The examples I've seen online is, it's getting advertisements to order a pizza directly from their TV. Are they going to be using that with their experience that they're watching a game and ordering pizza? Is it that they're watching something on Netflix and they can continue to watch that as they ordered the dress on one of the characters? So I think there's a way to make it a little bit more interactive. 

Andrew Wallenstein (22:31): 

James, I have to confess, I literally was thinking about the second episode of the first season of Black Mirror when you started talking about this. It is literally my favorite episode of Black Mirror. 

James Kotecki (22:43): 

You're talking about the one with the bikes, right? 

Andrew Wallenstein (22:46): 


James Kotecki (22:46): 

Where they're pedaling and they're seeing ads all the time. 

Andrew Wallenstein (22:48): 


James Kotecki (22:48): 

It's an interesting world that we live in. 


I want to talk about the strike a little bit more. Andrew, you're covering this obviously as an analyst, but is it difficult to understand and parse out what the future of this strike might be? I guess what I'm asking is, is Hollywood especially difficult to cover because everybody involved from the executives, to the writers, to the actors, everybody involved in this is a skilled storyteller. And so as far as parsing out what's a story and what's the underlying reality, is that challenging? 

Andrew Wallenstein (23:21): 

It's challenging because in all the years that I've covered this business, I've never been in a moment where things seem so bleak. There is such a vexing collection of issues at play here, and at this moment there is no one or number of individuals who seems poised to pull everyone out of the muck and say, "Here's the solution." And that's really called for here. 

James Kotecki (23:21): 


Andrew Wallenstein (23:58): 

There's going to need to be some sleeves rolled up and some really creative thinking. And right now where we stand on July 28th as we have this conversation, it's a pretty dark moment. 

James Kotecki (24:13): 

Is one possible obvious but relatively blunt answer to this, that we were in an era of peak TV and that meant peak quality, peak consumption, probably peak employment and peak profits, and now everybody involved in that is just going to have to get used to less. There's going to be a world of consolidation. Some of these streaming services fail. I like to keep things upbeat on this podcast, but since we want to talk about the actual future and what that could look like, from the consumer perspective, it seems like we're going to be okay. We're still going to have plenty of stuff to watch on those screens. 


From an advertiser perspective, it seems relatively exciting because we're going to have a lot of more opportunities to target folks in very sophisticated ways that may be more elegantly blended into their lives. But from an industry perspective, the folks who are actually making this content on all sides of the business, that's where the bleakness comes in. So is it just as simple as saying, we were at the peak, we're not at the peak anymore and that's just going to mean that someone has to undergo some pain? 

Andrew Wallenstein (25:12): 

I think everyone's going to have to undergo some pain, and it's just a question of who's going to make what kind of sacrifice. I recently wrote a column about suggesting like, "All right, who's going to be the first to say this is the concession I'm going to make." And that's going to be an important first step. Someone has to be like, "I am going to do the following", and that will be the tone setter that is necessary for the second person to say, "And I'm going to do this." And the third person to say," I'm going to do that." And maybe then we'll get somewhere. 

James Kotecki (25:53): 

Jessica, does your research on, as you look at the market, as you look at consumer behavior, purchasing behavior, does it give you any additional insight into how things might actually shake out? Because it strikes me that so much of the reason for the streaming business even to exist, go through all of the things that it's gone through and be at this moment now, it's all down to just the technology that actually supports it. If we didn't have this technology, this ubiquity of devices, we would be in a different world. So from your perspective, where do you stand? 

Jessica Boothe (26:25): 

I do think that the technology gives the consumer a seamless and efficient way to connect to content. So I do see that we're seeing a slight decline in cord cutting. So people just don't want to have that box on their vanities or wherever they're having their TV at. So we are seeing that people, again, are liking the option to stream content, whether that be the live TV versus the ability to go through the streaming services. So I think we'll actually get to a point where they enjoy having the streaming content, even if it's less than what they had before if it's not at the peak. Overall, cord cutting is still happening. It's just the boxes, we're talking about the boxes. 

Andrew Wallenstein (27:06): 

Right. But overall, boxes are no boxes, cord cutting is accelerating. Probably I would bet, permanently declining in a way that is irreversible and is largely a function of the fact that streaming for all its problems is a compelling alternative. And the companies that are in both of these businesses are diverting more and more of their programming energies and investment into streaming weakening cord cutting. And that is not going to change. I don't think the paid TV programming world will ever die out completely, but it will hit a floor that will be far from what it once was. And I think really the biggest question is sports, and how much of it will convert out of pay TV? Pretty much almost holding it up single-handedly right now. 

Jessica Boothe (28:09): 

I think it's just a new way of how it actually looks. So to your point again, is it coming through a streaming device or how is it actually coming through in terms of that cable interaction? 

Andrew Wallenstein (28:18): 


Jessica Boothe (28:18): 

How are people viewing, to your point, the lives. 

James Kotecki (28:21): 

The reason that sports is more on paid TV than live TV, although obviously there's plenty of live sports that you can also stream or get without a cable subscription to it, but that's basically a business decision, right? There's not necessarily a technological reason or barrier that you couldn't just have sports streaming all the time too. 


So I'm curious from both of you as we wrap this up, Andrew, you talk about a floor to paid tv, I guess we can say more traditional cable TV. Is there some fundamental reason that that has to exist or that that still will exist? An analogy is people have said about paper. If paper didn't exist, someone would still invent it. Because there's certain use cases, it actually is better to have something written on a piece of paper. It lasts for a lot longer, you can pass it down. You can have it as an heirloom, things like that. So is there any structural reason for it or is it just going to be the continued business gyrations and inertia of, let's say maybe largely older folks who don't want to get rid of cable for some reason, that that's keeping it afloat? 

Andrew Wallenstein (29:22): 

That's a good question. I do think it will be largely inertia. I don't know that there is any fundamental reason beyond that, that it would exist. I just think there's an older audience that's used to it and some combination of watered down sports and news that will stick with it, and maybe that's 30 million people or something and they'll pay for it till the bitter end. It's kind of like DVDs, which people think has completely disappeared. It hasn't. There's still a business there. 

James Kotecki (29:22): 


Andrew Wallenstein (30:07): 

It's never going to go away. I don't know why it still exists. I don't know that there's any actual reason for it, but there are collectors out there. It's a shadow of its former self, but it does still exist. 

James Kotecki (30:20): 

Yeah. Yeah. And maybe another answer to that question is just, we don't know. For some reason in the future, maybe there is a discovery by folks of some, either for vintage nostalgia purposes or some other kind of technological reason, reliability or something like that, the aliens take out our internet and we have to just rely on cable or something. I don't know what it's going to be. 


Well listen, I really appreciate you both for joining me today. Andrew Wallenstein of Variety Intelligence Platform and Jessica Boothe of the Consumer Technology Association. Thank you so much for joining us today. 

Andrew Wallenstein (30:55): 

Good to be with you. 

Jessica Boothe (30:55): 

Thank you. 

James Kotecki (30:57): 

Well, that is our show. CES Tech Talk. That's it for now. But there's always more tech to talk about, so please subscribe to this podcast and you won't miss a moment. And you can get even more CES and prepare for Las Vegas at ces.tech. That's ces.t-e-c-h. Our show today is produced by Nicole Vidovich and Mason Manuel, recorded by Andrew Lin and edited by Third Spoon. 


I'm James Kotecki, Talking Tech on CES Tech Talk.