Entertainment: Streaming faces a big shakeout
The streaming wars are making our watching experience worse and worse, said Therese Poletti in MarketWatch. What was started by Netflix as “a lowpriced service with no ads” has evolved into “ad-supported services, less content, and accounts that can’t be shared.” Even Disney, with its massive content portfolio underneath ESPN+, Hulu, and Disney+, can’t “make streaming work as a profitable business,” and so it is “destroying all that was good about streaming.” After losing 4 million subscribers and another $659 million during the first quarter, the company said “it would remove some content from its streaming platforms” and produce less content going forward while simultaneously raising the cost of its ad-free version of Disney+. Streaming is turning out to be more costly than anyone expected, so the big players’ new strategy is charging more for less.
The war for subscribers is clearly over, said Alex Sherman in CNBC.com. “Significant streaming subscriber growth simply isn’t there anymore,” and investors have lost patience with the massive spending on content. Paramount Global announced it “added 4.1 million subscribers in the quarter,” but its stock fell 28 percent after the company announced it was cutting its dividend “to save cash” after all that it’s burned on content. Fact is, “the media and entertainment industry will need a new growth story soon.” The most obvious candidate is gaming, which could soon replace streaming TV as “a more exciting story to tell investors.”
Booming free platforms are another threat to both cable and streaming, said David Pierce in The Verge. Free adsupported television (FAST) platforms like Tubi, Pluto TV, and The Roku Channel “are the fastest-growing part of the streaming business right now” as users look for cheaper ways to watch their shows. “The appeal of free streaming is right there in the name: it’s free!” You won’t necessarily find prestige shows, but it’s sort of like how cable used to be.
Streamers need Madison Avenue involved somehow, said Cynthia Littleton in Variety. Ads are the only way to reach “profitability of content over the long haul.” A broader mix of subscription and ad-supported channels was inevitable. The question is how to present it to viewers. “There are growing rumblings about efforts to turn the pay-TV business structure on its ear with a cafeteria-style model that would allow subscribers to pay a baseline monthly or annual subscription.” While inarguably better for consumers, it would require “bringing the biggest names in TV together” and calling a truce in the streaming wars. We’re not there yet.