Robyn Beck | afp | beautiful pictures
I am calling it. The streaming war is over. 2019-2023. XE.
The race between the biggest media and entertainment companies to add streaming subscribers, knowing that consumers will only pay for a limited amount, is over. Sure enough, the participants were still running. They just don’t try to win anymore.
Disney announced its flagship streaming service, Disney+, lost 4 million subscribers in the first three months of the year, bringing the company’s total streaming subscribers down from 161.8 million to 157, 8 million. Disney has lost 4.6 million customers to its Indian streaming service, Disney+ Hotstar. In the US and Canada, Disney+ lost 600,000 subscribers.
It’s clear that the biggest media and entertainment companies are operating in a world where significant streaming subscribers simply no longer exist – and they’re not willing to go after it the hard way. . Netflix more 1.75 million subscribers in the first quarter, bringing total global sales to 232.5 million. Discovery of Warner Bros. add 1.6 million in land price 97.6 million VND.
The major media narratives these days revolve around profitable streaming. Warner Bros. Discovery announced last week its US direct-to-consumer business turned in a profit of $50 million for the quarter and will remain profitable this year. Netflix’s streaming business has been profitable during the pandemic. Disney on Wednesday announced its streaming loss had shrunk from $887 million to $659 million.
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Netflix has limited its content spending growth, Warner Bros. Discovery and Disney have both announced thousands of job cuts and billions of dollars in cuts in content spending in recent months. Disney will “produce lower volumes of content” in the future, Chief Financial Officer Christine McCarthy said on Wednesday’s earnings conference call, though CEO Bob Iger noted he doesn’t think that it will have an impact on global subscriber growth.
There is still some growth among the smaller players. NBCUniversal peacock achieved 2 million people signed up last quarter, giving it 22 million subscribers. global supreme added 4.1 million subscribers in the quarterput it at 60 million subscribers.
But the important question is not looking at the growth numbers but about investors’ reactions to the growth numbers. global supreme dropped 28% in one day last week after the company announced it was cutting its dividend from 25 cents a share to 5 cents a share to save cash.
Disney+ Hotstar subscribers brought in revenue of 59 cents per month last quarter, down from 74 cents in the previous quarter. Looks like Disney is fine with losing these low-paying customers. Disney gave up the rights to stream Indian Premier League cricket last year. Those rights were acquired for $2.6 billion by Paramount Global.
Disney also announced it price increase of the ad-free Disney+ service later this year. Disney’s average revenue per user for subscribers in the United States and Canada jumped 20% in its most recent quarter after another price hike was announced last year. Strategy operators typically don’t use big rallies if the priority is to add subscribers.
What’s next?
Raising prices and cutting costs is not a great growth strategy. Streaming is a growth strategy. Maybe it’ll come back a bit with cheaper ad tiers and Netflix’s impending password-sharing crackdown.
But it is highly unlikely that growth will return to the levels seen during the pandemic and early years of mass streaming.
That could mean the media and entertainment industry will soon need a new growth story.
The most obvious candidate is gaming. Netflix has started a fledgling video game service. Comcast considered buying EA last yearas first reported by Puck. Microsoft’S agreement for Activision is now in jeopardy after UK regulators blocked the transaction. If that acquisition fails, activated can immediately become the target of established media companies as they look for a more interesting story to tell investors.
While Disney shuts down its metaverse division As part of a recent cost-cutting scheme, combining its intellectual property with games seems like an obvious combination. One can easily imagine the growth potential of Disney buying something like Epic Games, which owns Fortnite and builds an interactive version of the universe through the game.
More consolidation will happen – eventually – between legacy media companies. But a major game acquisition could start a race in the industry.
Perhaps The Gaming Wars is the next chapter.
