Streaming had a windfall and a glut
Corporate behemoths Disney and Apple kicked off their challenge toNetflix in November 2019 with the launch of their streaming platforms, adding even more competitive energy to amarketplace that already includedHulu, Amazon Prime and CBS All Access, aswell as several other smaller contenders. In the spring, just as the pandemic took hold, three more companies joined the fray: HBO Max, Peacock and Quibi. With the dire realities of COVID making it clear that movie studios could either shelve their big titles indefinitely or make them available digitally, 2020 became the Year of Streaming.
Quibi, of course, went belly up before the year would end. Even with $1.75 billion in funding, the mobile-only platform from founders Jeffrey Katzenberg andMeg Whitmanwas a dud fromtheword go and a notorious footnote in a year that became primarily a stay-at-home experience.
The lack of live entertainment has meantwe’re spending more time streaming, but 2020 has also been a year of job losses andworsening financial circumstances; paying for a half-dozen monthly subscriptions isn’t feasible or even desirable for most people.
Hence this jostle for market dominance, which has been a windfall for audiences willing to brave the fire hose in search of quality. There’s more to watch than ever— name your niche and there’s someone catering to it— but there are also more barriers to entry, like a garbage user interface. Or the lack of deal making with Roku thatwould’ve ensured a certain streaming service ( cough, HBOMax) would be accessible on more than a computer. Roku isn’t the only device thatmakes it possible to watchweb-based streaming sites on your TV, but it’s a popular one and good luck convincing users to fork over money for the hassle of watchingHBOMax on their laptop.
Warnerswould be foolish to let this impasse drag on indefinitely nowthat the studio plans to release its entire slate of 2021 films— “Dune” and “Matrix 4” among them— on both HBOMax and in theaters simultaneously. It’s a decision that has caused all manner of teeth gnashing in Hollywood. Some of that pushback is framed as a defense ofmoviegoing; I suspect more of it is about money and theway deals are currently structured and the potential for backend profits nowgone like a puff of smoke. Maybe Warners will cut these massivelywealthy people a few checks to quell the noise, who knows.
But even before the pandemic, many audiences were staying home already, squeezed out by the rising cost ofmovie tickets. That’s what I find so callous about the“Warners bad!” PR campaign fromdirectors like “Tenet’s” Christopher Nolan and “Dune’s” Denis Villeneuve; worst case, these filmmakers will be somewhat less rich. Meanwhile, it’s dire out here for so many. You can’t talk about 2020 without talking about that. Warner Bros. initiated a new round of layoffs just last month. California— Hollywood’s home base— is on track to begin mass evictions, during theworst coronavirus surge yet, if legislators don’t extend protections set to expire next month. Itwould be heartening if some of the biggest names in filmmakingwere just as vocal about these issues, but don’t hold your breath.
Boosters of the theatrical-first model like to cite 2019’s record-setting global box office ($42.5 billion) as proof that streaming will kill the goose that lays the golden egg. What they’re leaving out is the reality that theater attendance— the number of tickets sold — was down. Why did the industry make somuch money last year anyway? Because it’s more expensive than ever for moviegoers to get in the door.
Also, here’s a fun fact: For years now, Oscar voters havewatched the vast majority of eligible films— wait for it— at home. They like the convenience. To which a person might reply: Who doesn’t?
But don’t let themovie debate overshadowjust howimportant TV series are to the streaming ecosystem. Itwas a year that included “Little Fires Everywhere” onHulu, “The Boys” on Amazon, “The Morning Show” on Apple (I’m fudging that last one, which premiered a year ago November)— each tackling hot-button issues in the glossy packaging of highend TV. But the inundation of content has become so intense that it can be hard to remember which streaming shows really broke through this year. Quick, name a new series on Peacock. Or CBS All Access. It’s not like the titles come immediately to mind. Not yet. Not theway “The Queen’sGambit” onNetflix might, and that’s because Netflix still has so many more subscribers than anyone else.
Originally aDVD-bymail service, Netflixwas the first to really grasp and harness the potential that streaming had to offer, and the company’s trajectory has shaped everything that’s come since. Here’s longtime entertainment journalist Richard Rushfield with some context:
“Thanks toNetflix’s success— itwas the stock of the decade— Wall Street made the decision that streaming is howyou make money: You start a subscription streaming service and ultimately it takes over theworld. The fact that Netflix isn’t a profitable company hasn’t saved anybody else fromthat mindset.”
Consider the enormous success Disney had over the last 10 years with blockbustermovies in theaters. “That had no impact on Wall Street,” Rushfield said. “The stock didn’t budge, it evenwent slightly downward. And then the day they announced Disney+, the stock shot up.” Which explains the recently announced deluge of upcomingMarvel and “StarWars” TV spinoffs specifically intended for the streaming service.
Rushfield covers the business ofHollywood in his exceedingly fun-to-read newsletter “The Ankler” and I asked what he sees coming down the pike: Will all these newcomers still be in business this time next year?
“December 2021, I think yes. But in 2022, Iwould guess not.” There’s a real possibility of mergers or buyouts. “They can’t all survive spending at the level they’re spending right now, making these billiondollar bets on TV series,” said Rushfield. “But there’s also a question of, canNetflix survive? Apple could swallowNetflix without taking a breath, really.”
Why is streaming’s current top dog so vulnerable? “It has a huge amount of debt. And it nowhas seven major competitors for the first time, and they’re not just competing for subscribers but talent.”
Plus, Netflix continues to lose its most popular library titles (everything not made byNetflix) including “The Office,” which moves to Peacock on the first of the year. (Peacock is ad-supported and therefore free, but there is also a premium tier that costs a monthly fee andwould it surprise you to learn that executives have decided that all but the first two seasons of “The Office” will live behind a paywall?)
2020 has been a buffet of uncertainty and so oftenwe turn toHollywood to alleviate those anxieties, if only for a brief respite. But what ifHollywood is experiencing its own internal struggle to adapt?
Rushfield isn’t entirely pessimistic.
“Let’s first stipulate that I’ve frequently criticized the leaders of our little industry as too timid, conservative, reactive, and lacking guts and vision,” he wrote in a recent newsletter
TakeWarner’s vilified decision to release its upcoming slate ofmovies on HBOMax:
“Whatever else you can say about thismove, timid and piecemeal it ain’t. A giant entertainment conglomerate is risking everything it’s got, betting the entire store on a new division— a floundering new division, no less. So whatever elsewe say about it, let’s bowto a rare showof moxie.”
Here’s to strong internet connections in 2021.