The streaming industry is at a critical juncture. User growth is slowing, and major players are looking to consolidate. However, profitability finally seems attainable, especially for giants like Netflix. This has led The New York Times to interview industry leaders about what the future holds for streaming services.
A Focus on the Profit
There seems to be a consensus among executives on the key themes for the future of streaming:
- More Ads: Expect to see an increase in ad-supported subscription tiers, a move that will likely generate more revenue for streaming services.
- Higher Prices: The initial low prices many streaming services offered are unsustainable. Anticipate continued price hikes for ad-free subscriptions.
- Fewer Prestige TV Risks: With a focus on profitability, streaming services may take fewer chances on high-budget and critically acclaimed shows.
These changes all point towards a prioritization of financial stability over subscriber growth at any cost.
Free Streaming: The Price is Ads
The growth of ad-supported streaming tiers could significantly impact the types of content produced. Advertisers typically target broad audiences, and the rise of ad-supported streaming may lead to a return to formulaic shows reminiscent of network television’s heyday with a focus on genres like cop dramas and medical procedural.
Even though, streaming executives insist they haven’t abandoned the pursuit of prestige television. Netflix co-CEO Ted Sarandos maintains that Netflix can “do prestige TV at scale,” while acknowledging the need for a wider content portfolio. Similarly, Amazon’s Prime Video head, Mike Hopkins, emphasizes the importance of both established formats and “big swings” that generate excitement and word-of-mouth buzz.
Other Predictions for the Future of Streaming
Here are some other predictions from industry leaders:
- Greater Investment in Live Sports: Live sports are considered a powerful tool for attracting and retaining viewers. We can expect to see increased investment in this area.
- YouTube TV: This service offers live sports alongside its on-demand content, including channels like ESPN, TNT, and TBS.
- Hulu + Live TV: This bundle combines Hulu’s on-demand library with live sports channels like FOX Sports, NBC Sports, and regional sports networks.
- ESPN+: Though primarily focused on on-demand sports content, ESPN+ also offers live streaming of select events and leagues.
2. Bundling: Similar to cable packages, streaming services may offer bundled subscriptions to multiple platforms at a discounted rate.
- The Disney Bundle: This combines Disney+, Hulu (with ads), and ESPN+ into a single, discounted subscription.
- Paramount+ with Showtime: This bundle offers both Paramount+ and Showtime content at a reduced price compared to separate subscriptions.
- Sling TV: This service offers a variety of customizable channel packages, allowing users to choose the specific sports networks they want.
3. Mergers and Acquisitions: With the need for a critical mass of subscribers (around 200 million according to former Disney CEO Bob Chapek), consolidation through mergers and acquisitions is very much likely.
- Warner Bros. Discovery: This recent merger combines the content libraries and streaming platforms of Warner Bros. and Discovery, creating a larger competitor in the streaming space.
- NBCUniversal’s Acquisition of DreamWorks Animation: This move by NBCUniversal strengthens its animation library and potentially bolsters its Peacock streaming service.
- Amazon’s Acquisition of MGM Studios: This acquisition expands Amazon Prime Video’s content library with classic films and television shows from MGM.
Conclusion
Some of these changes may be positive (like on-demand viewing) but others raise real concerns. A return to ad-supported models could actually impact the content creators and talent compensation negatively. Adding to that, the rise of bundling and consolidation may limit viewer choice and lead to a more homogenized streaming landscape.
The future of streaming, as envisioned by current industry leaders may resemble the old cable TV ecosystem more than initially anticipated. (Can we just keep things to bringing back fashion trends and not picking up where network TV left off?). There will be improvements (like on-demand viewing), but there may also be drawbacks (like increased ads and potentially lower quality content). As the saying goes, the players may change but the overall experience could feel quite familiar.
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