2023 has been a year of reflection for streaming services. After every studio decided they wanted a piece of the pie and, launched their own streaming service, achieved record growth during the pandemic, most are now starting to scale back or merge. Of course, WarnerMedia and Discovery merged earlier this year, and now there’s talk of the company merging with Paramount. At the same time, others are licensing more of their content to their competitors.
But, according to a new report from the Financial Times, it appears that Disney, Warner Bros Discovery, Comcast, and Paramount have lost more than $5 billion on streaming in 2023. All of which raised prices this year.
It’s reported that Comcast lost the largest amount on Peacock, but the others are also losing significant money. Why? It’s pretty simple. There’s too much content for consumers to consume. And with the current recession, many are tightening their belts and canceling services. Which means lost revenue for these companies. On top of that, content is expensive to make. And we can’t forget about the Actor and Writer strikes from earlier this year. That paused production for a solid six months on a lot of content.
How many streaming services can survive?
Right now, there are over 100 different streaming services available, especially when you count the FAST services, which are free. So you have to wonder, how many can the market keep afloat? Likely not more than 10. We’re going to see more consolidation in the streaming space, as I wrote about earlier this week. The ones I’d expect to see stick around are Netflix, some form of Hulu and Disney+, as well as Max, especially if it merges with Paramount and a few of the FAST services like Tubi TV and Pluto TV.
FAST streamers are really going to take over in 2024. And it’s not hard to see why. It’s free, ad-supported streaming TV, as the acronym points out. Meaning consumers aren’t going to cancel them once money gets a little tight.
Expect more price increases in 2024 as well, particularly on the ad-free tiers. Streamers want you to stick to the ad-supported tiers, as they can make more money off of you that way, and so can the studios that license content to these streamers as the studios do get a cut of that ad revenue, from ads placed alongside their content.
2023-12-30 15:08:23