Good evening! As expected, the streaming landscape continues to change dramatically and unpredictably. The media is going wild with reports about Netflix losing 200,000 subscribers in the first quarter of 2022. That’s a pretty big deal, but I wouldn’t say the streaming industry is in trouble. Streaming companies simply over-expanded and consolidation is inevitable. I’ll explain my rationale below.
For the record, I still believe streaming is the future of television and cinema. It might even be the future of gaming some day. However, the streaming market is oversaturated and consumers are only going to spend their money on a finite number of services. The main point is to spend less money and enjoy a large amount of content. In the past, Netflix didn’t have any competition, so they could afford new films and shows on a weekly basis with top tier talent. Now their competition includes Disney+, HBO Max, Amazon Prime, Peacock, Apple TV+, Paramount+, Hulu, etc. Everybody has entered the streaming wars and we’ve already seen casualties. For example, CNN+ was shuttered a handful of weeks after launch.
In the long run, the market won’t have a million streaming services. Some of them are going to fail, but that doesn’t mean consumers will have less content. Do I really think fledgling services like Peacock and Paramount+ are going survive? I doubt it, but Universal Pictures and Paramount will probably sell content to Netflix, Disney+, HBO Max, or whoever endures. Right now, multiple streaming services exist and we’ll probably wind up with three or four in the long run. That’s what I mean by consolidation. It’s an inevitable reality across all markets. We’re already seeing major consolidation in the film industry. For example, Disney purchased 20th Century, including all subsidiary brands. Consolidation is also happening in the gaming industry. Microsoft and Sony are buying game developers left and right. Many people freak out when consolidation occurs, but it’s unavoidable because consumers don’t have unlimited time or money. Look at how many films release in theaters on a monthly basis. Nobody can afford that many movie outings!
What will change for Netflix in the near future? I have a feeling we’re going to see a cheaper, ad supported plan at some point. It might incentivize consumers to keep their subscriptions. Ultimately, Netflix will have to cut down the amount of movies and shows. It also means they can’t afford the most expensive actors, directors, and screen writers. Don’t freak out because viewers only watch a fraction of the content on any given streaming service. A lot of good (and mediocre) content slips under the radar and nobody even notices. Netflix must save money, one way or another.
It’s worth noting, many of those 200,000 subscribers will probably return. Netflix and the other streaming services are victims of churn. That means viewers will subscribe to one or more streaming services for a month and unsubscribe the following month to try something else. I think weekly episode releases was a smart change for streaming shows, but they can do more. Rising prices may have contributed to the problem, considering Netflix is one of the most expensive streaming services and they continue to lose content. I’m talking about less content for more money. Disney, Warner Bros., Universal, and Paramount want their franchises back.
So, the days of a million new streaming shows every week will end one of these days. That’s fine because quality is more important than quantity and people simply don’t have that kind of time anyway. By the way, network television is in far worse trouble. I’m pretty sure live sports are the only thing keeping network television on life support right now. We’ll have to see how live news and sports integrate into the streaming market eventually.
Did you keep your Netflix subscription? What’s your favorite streaming service at the moment? Do you think streaming is becoming more expensive than cable? Go ahead and rant about everything in the comment section. I haven’t figured out next week’s post yet, so keeps your eyes open. Take care and enjoy the rest of your weekend!
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