Jeremy Burke’s Post

The Future of Streaming (According to the Moguls Figuring It Out) Who will survive? Die? Thrive? And how? We talked to nearly a dozen top media executives and asked them to predict what lies ahead. Paramount, the media empire controlled by Shari Redstone, lost $1.6 billion on streaming last year. Comcast lost $2.7 billion on its Peacock streaming service. Disney lost about $2.6 billion on its services, which include Disney+, Hulu and ESPN+. Warner Bros. Discovery says its Max streaming service eked out a profit last year, but only by including HBO sales through cable distributors. Streaming service’s profitability depends in large part on how many paying subscribers are needed before those TV shows and movies become cost-effective. There was a time when industry executives hoped that number might be as low as 100 million. But now the consensus among many of the executives interviewed is that the number is at least 200 million, and possibly more. When cable TV was in its heyday, 1.5 to 2 percent of subscribers churned monthly, abandoning or suspending their service. The average churn across all streaming services is more than double that, according to data from analytics firm Antenna, with the churn rate of some smaller streaming services, like Paramount+, as high as 7 percent. Only Netflix has a churn rate below 4 percent.

Great article + summary of the streaming environment.

The streaming industry is witnessing a shift as major media executives, including The Walt Disney Company's Bob Iger and Warner Bros. Discovery's David Zaslav, praise rival platforms like Netflix and Amazon. This marks a truce among streaming giants, reflecting changes in industry dynamics where profitability and sustainability are gaining importance over subscriber growth alone. Previously, platforms engaged in overspending to attract top producers and secure sought-after shows. Now, partnerships and bundled offerings are emerging trends as companies seek to address profitability challenges and changing consumer behaviors. This shift suggests a move towards consolidation in the industry, with Paramount and Warner Bros. Discovery being key players in potential merger talks. Follow Amanda Newman to stay up to date with technology. https://lnkd.in/dhpxcpDn

🏚️Streaming’s Financial Strain: Legacy media giants like Disney, Paramount, and Warner Bros. Discovery are facing significant losses in streaming, questioning the sustainability of the current model. 📺Subscriber Threshold: Executives believe that to be profitable, a streaming service needs at least 200 million subscribers. Only Netflix, Amazon, and Disney+ (combined with Hulu) have crossed this mark. 💲Content Costs & Risks: Streaming giants like Netflix and Amazon are investing billions in original content, with shows costing up to $50 million per episode, underscoring the high stakes and risks involved. 🏈Live Sports as a Lifeline: The soaring costs of live sports rights are a critical battleground. Streaming services are betting big on sports to attract subscribers and reduce churn. 🦦Advertising’s Role: With ad-supported tiers gaining traction, streaming platforms are leveraging targeted advertising as a crucial revenue stream. 💰Market Consolidation: The future may see only a few dominant streaming services (e.g., Netflix, Amazon, Disney/Hulu), while smaller players may shrink, merge, or exit the market. 🔄Bundling as a Strategy: Smaller streaming services are exploring bundling as a way to increase value and attract subscribers, though the economics remain complex. 🪪Sony’s Unique Approach: Unlike competitors, Sony has adopted a profitable “arms dealer” strategy by licensing content rather than competing directly in general streaming. https://lnkd.in/dkwtGpqf

Good article, but the folly continues. As I wrote two years ago, updating prior posts: The Great (Streaming) War of Stupid Value Propositions -- Continued! ...the value proposition for flat-rate all-you-can-eat streaming sucks. ...They continue making an offer that is quickly refused or cancelled, to a finite number of streamers who want a full range of viewing, but with limited wallet to share among competing offerings -- thus satisfying few. This is not a problem of user behavior, or of competition, but of collective industry blindness to a failed pricing model. Few want all they can eat! We can't eat that much! We want only what we want, and don't want to pay for more. Instead, all streamers and consumers could share a much larger pie, with much higher shared value all around. Experiment with more win-win value propositions -- set a fair, bundled (volume discounted) price -- for however much or little we want each month. Offer a fair value proposition so we can subscribe, stay, and watch as we like -- not pay a flat rate every month even when we get no value at all. https://lnkd.in/eD4wfx45

A hundred million streaming subscribers isn’t cool. You know what’s cool? 200 million subscribers. Then again, 200 million subs may not even be enough these days. That, or “possibly more,” could be the new benchmark for a streaming service to succeed, a New York Times poll of top entertainment executives found. Executives interviewed include Netflix co-CEO Ted Sarandos, Liberty Media’s John Malone, former Disney CEO Bob Chapek, Prime Video head Mike Hopkins, IAC chairman Barry Diller, Comcast chief Brian Roberts, and “numerous other owners and senior executives of major media companies.” #StreamingIndustry #EntertainmentExecutives #SubscriptionBenchmark

Disney’s earnings today suggest something investors have largely ignored or dismissed: What if legacy media’s transition to streaming works? What if streaming ends up being a better business than traditional TV? It’s still early. But Disney’s earnings give hope to a legacy media industry in turmoil.

Amazing long form article on the streaming media at a crossroads, with industry titans like Brian Roberts, John Malone, and Barry Diller recognizing the unsustainable nature of current business models. Here are the key takeaways: 1. Legacy media giants like Paramount, Warner Bros. Discovery, and Disney are struggling financially, while disruptors like Netflix and Amazon thrive. 2. The magic number for profitability in streaming is at least 200 million subscribers, with Netflix leading the pack. 3. Costs for content production and sports programming are soaring, creating significant financial pressure. Opportunities: 1. Bundling services can attract price-sensitive consumers and reduce churn. 2. Advertising-supported tiers offer new revenue streams and potential growth. 3. Licensing content, as demonstrated by Sony, can be a profitable strategy without running a streaming service. Challenges: 1. Achieving profitability requires massive investments in content and sports rights. 2. High churn rates and subscriber acquisition costs are ongoing issues. 3. The industry may consolidate, with only a few major players likely to survive. The future of streaming hinges on balancing quality content with financial viability. Innovation and strategic partnerships will be crucial for navigating this evolving landscape. #Streaming #MediaIndustry #Netflix #AmazonPrime #Disneyplus #WarnerBros #Paramount https://lnkd.in/gu-pY6ew

I Will Survive « Who Will Survive? How many streaming services will consumers support? That was one of the great mysteries of the nascent streaming world, and the answer is coming into focus: not very many. “Can your current business be a successful player and have long-term wealth generation, or are you going to be roadkill?” Mr. Malone mused. “I think all the small players will have to shrink down or go away.” A recent Deloitte study found that American households paid an average of $61 a month for four streaming services, but that many didn’t think the expense was worth it. That suggests the once-unthinkable possibility, many of the executives said, that there will be only three or four streaming survivors: Netflix and Amazon, almost certainly. Probably some combination of Disney and Hulu. Apple remains a niche participant, but appears to be feeling its way into a long-term, albeit money-losing, presence, which it can afford to do. That leaves big question marks over Peacock, Warner Bros. Discovery’s Max, and Paramount+. »

Old Hollywood is finally doing what Netflix has been doing for over a decade: making money from streaming. With the exception of NBCUniversal, the biggest legacy media companies all reported a profit from their direct-to-consumer businesses last quarter, led by Disney, which earned $321 million from its online video arm in the final months of its fiscal year. It was the second straight quarter of profitability for the unit that includes Disney+, Hulu and ESPN+. The profit at Disney’s direct-to-consumer division even exceeded the earnings from its film division, which scored $3 billion in global ticket sales this summer from its blockbusters. Read more: https://lnkd.in/egmYj4hR