TV's Golden Era Proved Costly To Streamers - Slashdot
source link: https://entertainment.slashdot.org/story/23/07/05/1251215/tvs-golden-era-proved-costly-to-streamers
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TV's Golden Era Proved Costly To Streamers
TV's Golden Era Proved Costly To Streamers (wsj.com) 47
Posted by msmash
on Wednesday July 05, 2023 @09:00AM from the closer-look dept.Consumers are winning from the streaming revolution but across most of Hollywood, the businesses churning out TV and movies are losing. From a report: Services such as Netflix, Disney+, Paramount+ and Max have become the default entertainment options for homes across America rather than cable, saving many consumers money. For the titans of Hollywood, that shift has been costly. Traditional media and entertainment companies have reported losses of more than $20 billion combined since early 2020 on their direct-to-consumer streaming businesses. Netflix, which brings in profits, is an exception, but the rest of the industry is wondering: While consumers love streaming, is it actually a good business? Investors now care about profitability rather than growth, a change that makes finding new revenue streams and retaining customers critical. Studios that for years were able to splurge on content to feed viewers' insatiable appetite for new shows and films now must pull back to make the math work. The ad market is weakening, many companies have laid off staff to save money and Hollywood writers are on strike. Market values for Paramount Global, Comcast, Walt Disney and Netflix are down more than $280 billion combined since the end of 2020. Warner Bros. Discovery is worth about half of its total value since its 2022 trading debut as a combined company. The declines have come after many of the stocks rose during the early part of the pandemic, when consumers were stuck at home and hungry for entertainment.
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Everyone said it from the start, no one wants 16 streaming platforms with different content on them. We all want all the content in one monthly subscription. Despite this Hollywood decided to split the content across different places and now cannot understand why no one wants to subscribe.
Sometimes it is amazing how much money those people get paid to make such obviously bad decisions.
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Self delusion is a powerful force. They all saw it as: Consumers will pay for one more streaming service above Netflix and that one streaming service will be us.
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Everyone said it from the start, no one wants 16 streaming platforms with different content on them. We all want all the content in one monthly subscription.
First point:
To be fair, what we said was "We all want to pay $10 a month and see all movies ever made", which was never really going to fly, was it. If it currently costs $50-100 a month to supply the "basic cable" tier (the original one, that includes things like USA and Discovery in their original forms, not the Comcastic "Locals and shopping chan
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Which actually is poignant, because the majority of content on streamers is paywalled, and if you don't have some compelling reason to subscribe to see it, it might as well not exist. So, similar to the fashion that I won't pay for a WSJ subscription to read this article, I won't pay for 10+ streaming services for content where I have no idea whether it is worthwhile.
Let's go back to the 90s. The reason people watched Seinfeld was to talk about it at work the next day. Those who didn't watch were shamed
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Netflix reportedly paid more than $500 million for Seinfeld. So a good show will still be valuable in a diversified streaming market.
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""We all want to pay $10 a month and see all movies ever made", which was never really going to fly, was it."
Why not? Those movies have already been made and are just metaphorically sitting on a shelf somewhere earning zero revenue. Making some money is better than making no money and the overhead for running a streaming service should be a known quantity by now. I think maybe the problem is the salaries at the exec level plus the need for streaming revenue to offset the money they're hemorraghing everywh
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Learn about residuals. [wrapbook.com]
Just because you think it's worth X doesn't mean others do. This kind of dichotomy between perceived value of a product is what caused all the issues with music licensing over the last 25 years. Lawsuits, convictions and fundraisers all happened, and now we are in something of an agreement as to the value. Do not assume this will be any less painful.
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Residuals are a percentage of profit. They will never exceed the revenue generated so any revenue is still better than no revenue. They'll still make more money after paying residuals on a content that is generating revenue than by shelving that content and generating no revenue. Their other costs must be the problem.
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Other than film history buffs, I don't think that is actually a very big draw. The reason that upstart streamers like Apple, Amazon and Netflix can compete against legacy studios with 100+ years of back catalog like Disney, Paramount and Universal is that most people only care about new releases.
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I think the biggest problem is these tech companies want to become studios themselves and produce original content of their own. That's where the big money is being lit on fire.
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I think the next evolution in streaming is consolidation back to your $50+/month service. After all, we already see it happening with Warner-Discovery and a few others. The small services will be gobbled up and the streaming prices increased to match.
At the same time, I forsee monthly prices increasing sharply, likely to the point where companies will offer very attractive annual rates. They'll do this to block hoppers (those who subscribe for a month or two then move to another service) because they'll off
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We get our cheap content from overseas like everything else, that's how we have streaming for less than the cost of basic cable. Netflix bought the rights to "Money Heist/La Casa de Papel" for $2 after its first season for an extreme example of opportunistic overseas shopping by Netflix. Hollywood has priced themselves out of business. Most of what I watch on Netflix is not made in the US.
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They're fighting with each other for growth market dominance. I guess they've reached saturation & now there's an economic slow-down in real terms, i.e. for you & me. Let the belt tightening begin, shrinkage for some & some degree of consolidation. Wouldn't be surprised to see Netflix & Disney buying up a few failing competitors to increase their market share & dominance in the not-too-distant future. With that will come cutbacks in spending on content.
Enjoy the competitively good qua -
Everyone said it from the start, no one wants 16 streaming platforms with different content on them. We all want all the content in one monthly subscription.
Every time I read this (or a variation of this) I have to chuckle.
I'm GenX - I'm old enough to remember the 90s, when everyone was complaining that the cable companies bundled channels together. If you wanted TBS, you also had to get TNT and A&E in a bundle.
"Let me buy channels a la carte!" people would cry.
Fast-forward 30 years and the-
But you're comparing apples with apple juice. People wanted to pay $1.99/month for TBS. They didn't (and don't) want to pay $19.99/month for the Ted Turner Package including TBS, TNT, TCM, and the Turner Shopping Network and the Turner Atheist Jesus Televangelism Network.
You're GenX, you remember how cable worked. You had a $49.99/month Basic package that was basically motel cable - networks, CNN, News8, USA, ESPN, mayyyybe MTV and Nickelodeon towards the end of the 90s. Then you had an $79.99/month package
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People wanted to pay $1.99/month for TBS.
They wanted to pay around $4 per month in 1990, which is equivalent to $9 today. The cheapest Netflix package is $8 per month today.
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Agreed. They created this zero sum game, but as it turns out, no single service has all the content viewers want. The studios just tried to turn streaming back into cable TV, forcing everyone to buy subscriptions just like they used to have to buy packages. The networks and studios saw what Netflix was doing, in many cases with their content, and instead of finding a way to use a well-established and pretty functional platform, they decided they'd play the zero sum game, doubtless each one imagining that th
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They did see this coming. It's a surprise to nobody. The whole strategy was to spend big on content to grow the subscriber base and win a position as one of the top streaming services. It may not have been clear exactly when the shift from growth to profit would be, but it should have been fairly predictable knowing number of cable subscribers before this all started as a likely long-term ceiling.
My question is, what is the total revenue for streaming now, and what is the total spending? That will indic
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