By Phillip Swann
The TV Answer Man – @tvanswerman

Disney-owned streaming services (Disney+, ESPN+ and Hulu) lost $1.05 billion in the 2023 first quarter after losing $1.5 billion in the previous quarter. The Comcast-owned Peacock lost $2.5 billion in 2022 and expects to lose as much as $3 billion this year. Paramount’s streaming services (Pluto, Paramount Plus) lost $511 million in the 2023 first quarter after losing $575 million in the 2022 fourth quarter.

For the last 3-5 years, major entertainment companies have invested in streaming as if it was the answer to all corporate ills, principally the decline of the cable/satellite industry which has feathered their nests with carriage fees for two decades. But company executives have finally realized that streaming was fool’s gold, something that looks great from afar but whose value shrinks when you actually start using it. Rather than replace those shrinking carriage fees, streaming has just drained more capital from corporate coffers. The costs of acquiring and creating original programming, marketing in a highly competitive category, and maintaining streaming’s complex technology have far exceeded subscription revenue.

So the executives, led by Warner Bros Discovery CEO David Zaslav, are now tasked at reining in their monsters and making them turn a profit.

That will mean two major changes for consumers.

1. Higher prices.
You have already seen it happen. HBO Max this month will become just Max, and when it does, the 4K plan’s price will rise by $4 a month for new subscribers. (Current subs will get at least six months before the change.) This comes on top of HBO Max last January raising the price of its ads-free plan from $14.99 a month to $15.99 a month.

Disney CEO Bob Iger said this week that the $10.99 ads-free Disney Plus plan will get a price hike soon and other streaming services are dropping hints of similar moves. When you’re losing billions, you need to do something to generate more revenue.

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2. Less Programming
HBO Max earlier this year removed a significant number of titles from its catalog and Disney says it will do the same. But you’ll see every streamer eventually get on the bandwagon. Fewer titles means fewer programming costs.

The executives are hoping that the extra subscriber revenue coupled with the programming reductions will be enough to make their services profitable. It appears to be working for HBO Max with Zaslav saying this month that it’s no longer a money ‘bleeder.’

The question remains, however: Will consumers accept these changes for all streaming services? Will they pay higher prices for less programming?

What do you think? Offer your comments in the comments section below.

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— Phillip Swann