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.
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.
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.
— Phillip Swann
@tvanswerman
I am probably a prude, but I don’t appreciate some of the, most of the R rated programming with filthy language. Nor do I watch kids shows. That doesn’t leave much programming for me to watch. Neither do I need the laugh track that comes with comedy. My two cents worth.
I don’t understand how they are losing so much money. Just about everyone I know has two or more streaming services. I have Hulu, Prime and HBO plus regular cable.
When they all start jacking up the prices 25% I’ll start dropping the services.
Years ago I hopped on the streaming wagon and love it! I’m 67 years old. But I’ve always thought there are way too many quality shows to watch (as well as a lot of crap). When the writers strike started recently, I thought to myself “I have so much already, I’ll be fine with no new series or movies for quite awhile”. And I’m right. So, when the streamers start offering less, I’m actually okay with it. My favorite is Apple TV+. They are the cheapest, yet offer the best original programming in my opinion. Netflix on the other had seems to go for almost the same demographic as network TV. Way more quality than quantity. But, they seem to be able to make a profit. Whatever happens, I’ll adjust. When this all gets too expensive, I’ll cut something out. As you said a few days ago, it’s all about money to the consumer…..someday these companies – cable, satellite, and streamers will get it. There’s too much greed at every level. The whole entertainment industry makes WAY too much money in my opinion…..but I’ll be fine in the end.
Higher prices for less content? That sound you hear is the beginning of the end for streaming content. All people will be getting for their money is 10 to 20 year old content. Save your money and buy books – so you can read the end of all those series you loved but got canceled.
I hate to say it, but I told you so, don’t mind my preaching to you, (ty Ron Elliot) ala carte is eating it’s own tail. Soon you’ll need a different streaming service for every genre of shows you enjoy. Sure cable / satellite gave you more channels you never watch, because they come bundled, I’ll stay w/DirecTV (unless charlie buys them) with one service like Britbox for my British Doctor Who classics