Is this the Beginning of the End in the Global Streaming Wars?

A media briefing on the streaming wars

After more than 15 years and billions of dollars spent by the world’s largest media companies, Netflix is still here and stronger than ever. The effort to build Netflix-killer copies of Netflix has resulted in only one sure thing, the consumer audience is everything. So, what now?

2023 was a pivotal year for the business of streaming. It represented a major inflection point in the trendlines within which traditional, multi-billion dollar media conglomerates with legacy studios and linear networks learned to compete with Netflix and Amazon. Those two names started the wars over 10 years ago, emerging out of Silicon Valley as tech companies with a disruptive new content distribution method that Hollywood should have, but didn’t see coming. Over the past decade, marquee studios such as Disney, Paramount and NBC/Universal have spent billions of dollars on dedicated, walled-garden-style streaming services and “original” content to acquire a new class of media consumer: the subscriber.

A focus on the subscriber has drastically changed the media industry’s business model internationally, causing knock-on effects and signalling a significant market shift. This shift signifies the end of a long chapter in the streaming wars. It also implies the start of a new chapter, one where companies must look inward to maximize profitability instead of growth. This article will analyze 2023’s key trends and market shifts in the global streaming landscape so investors can properly position themselves for the next chapter in streaming that begins this year.

Emerging Players

Unlike past years, there aren’t as many new players entering the global streaming market. This is partly because most of the major players have already established some type of streaming channel. The year’s biggest news was consolidation and re-branding as in that of HBO Max and Discovery+ under the ‘Max’ streaming service

Consolidation is now the name of the game. Paramount decided to axe its stand-alone Showtime streaming channel in favour of a Showtime add-on option to the Paramount+ streaming service. It is also rumoured that the AMC network is considering a similar approach, bringing all their niche streaming services (Shudder, AcornTV, Sundance Now, etc.) under one umbrella. CFO Patrick O’Connell suggested that while their niche brands target specific audiences, “it probably does make sense over time to sort of self-bundle, all call”. Similarly, Disney is planning a full acquisition of Hulu (previously a joint venture between Disney and NBC/Universal) at an expected price of $8.6 billion.

While the major players are busy consolidating, they continue to face stiff competition. Comscore’s state of streaming report highlights that the total hours viewed grew from 9.6 billion to 11.5 billion between May 2022 and May 2023. Even more interesting is that 75% of the newly acquired streaming hours are from providers beyond the top six streaming apps. This is largely due to the rise of ad-supported content, specifically free ad-supported television (FAST) channels. Kantar reports that it is the fastest growing streaming tier in the US with 47% of US households using a FAST service each week.

To understand this phenomenon, we must cross the aisle to examine the consumer.

Changing Consumer Preferences

It’s no secret that the overall growth rate of the Media & Entertainment industry is slowing down. Sluggish growth in consumer spending is one of the key reasons for this decline. For the average consumer, spending money on entertainment (specifically multiple streaming services) is a luxury, not a necessity. Furthermore, consumers have only seen their subscription prices rise while there is a significant slowdown in the amount of new content being released


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In this market, the adoption of ad-supported services such as FAST channels is driven by the consumer’s preference to sit through ads while spending less money. These channels also offer a variety of content (such as news, live sports, and more), giving viewers a diverse range of programming. In Q3 of 2023, household adoption of FAST services outpaced VOD streaming by two-fold. Anticipating the shift in consumer mindset, SVOD services like Netflix and Disney+ have already begun offering ad-supported subscription tiers at a cheaper price. 

Technology, specifically artificial intelligence, will play a massive role in the viability of the ad-supported streaming model. By analyzing backend viewer data, companies can offer personalized content recommendations and target specific adverts for each consumer. This will boost the overall ad impressions, a key metric advertisers use to evaluate how much they spend. For streaming companies, more ad impressions means more revenue. Therefore, superior tech-enabled consumer targeting will directly impact growth and profitability. 

A Battle for Content Supremacy

The days of throwing capital at subscriber growth are long gone.

The major platforms continue to spend money but are taking a much more measured approach. In 2022, we saw a massive pullback in the original content release volume across all the major streaming platforms. As per a Diesel Labs report, the number of new titles released by SVOD platforms nearly doubled in 2021, but that number only rose by 4% in 2022. This trend continued into 2023 and remains a key trend to watch going forward. 

SVODs are estimated to have spent close to US$42 billion (on both acquired and original content) this year. Of that, 29% has been allocated to the crime and thriller genre. Neil Anderson from Ampere Analysis believes that original content from the crime and thriller genres “appeal to subscribers across age groups and are highly portable across borders”. The science fiction and fantasy genres take second place, while comedy is third in line. 

In this new age of efficiency, legacy studios such as Warner Bros and Disney have been vocal about contracting their SVOD library, which also reduces their tax burden. Some titles removed from these platforms are heading to FAST channels, which can still generate ad revenue. As part of their cost-cutting strategy, Warner Bros Discovery also decided to license select titles to rival streaming companies. HBO titles such as Insecure and Ballers have been licensed to Netflix, while Westworld found its way to FAST channels such as Roku and Tubi. As profitability is getting harder to achieve, we might see more legacy studios and production companies begin to license their content in a move away from the ‘walled-garden’ approach.

Geographical Market Expansion

Netflix, due to its first-mover advantage in the streaming wars, still leads the pack in terms of global streaming market share. However, 2023 signals a shift even in their own strategy.

During the growth years, the company focused on a local-for-global strategy. Netflix created content in France, South Korea, and India but positioned it for a global audience. Creating these original projects and licensing classic US TV shows (Friends, The Office, etc.) drove the company’s subscriber growth. Today, their goal is to retain these subscribers, so Netflix is going for a local-to-local strategy.

In June, Netflix’ Chief Content Officer Bela Bajaj clarified that Netflix doesn’t “make global shows; we make local authentic shows that are on a global platform”. Netflix compartmentalizing its content strategy for each region is undoubtedly data-driven because the popular Netflix titles in India, South Korea, and Japan differ from the popular titles in the West

Netflix has spent years investing in content production hubs across Europe, Latin America, and Asia. The focus is to create content for the local audience. However, the global scale of the platform leaves the door open for any of these films or TV shows to become viral international hits. With subscriber growth stagnating in the US market, it seems that Netflix is going to pursue international audiences to continue its growth.


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Most streaming companies cannot afford Netflix’s global strategy. Amazon has found some success in specific markets, while others, such as Disney, are actively reducing their presence in international markets. In an effort to cut down costs, Disney is reported to be preparing a sale of their Indian operations to Reliance Industries. This comes after a massive loss in subscribers earlier this summer when Disney+ Hotstar lost the streaming rights to the Indian Premier League cricket matches.

Regulatory Impact and Challenges

For much of the industry’s history, delivery of television content has been distributed via broadcasters that are licensed by national governments.

In the United States, both national broadcasters and local TV stations have been operating under regulations of the Federal Communications Commission (the “FCC”) for over 30 years. Their model has been successful across the hugely lucrative US television market, but is under threat due to the practice of cord-cutting rising to an all-time high. This is partly due to the growing popularity of FAST channels and the integration of linear TV with streaming services (Hulu, YouTube TV, Amazon). As a result, the FCC is facing pressure from politicians and the National Association of Broadcasters to apply similar regulations on streaming platforms.

Netflix, Amazon Prime, and Disney+ also dominate the European streaming market, which has raised objections from European governments. In response to the American streamers’ growth and disruption of the local broadcasting industry, various European governments have imposed financial obligations on streamers. These regulations aim to increase investment in European films, documentaries, and episodic content. The effect of these regulations can be disjointed and hamper the streaming services’ ability to innovate. Furthermore, financial obligations or quotas may impact profitability. 

In response to these regulations, the streaming industry has banded together. In the United States, Disney, Netflix, Max, Peacock, and more have formed the Streaming Innovation Alliance (SIA) to lobby against government regulation. Some of these companies with a European presence are also part of the European VOD Coalition. The streaming landscape is still evolving, and as the major players begin to consolidate, they will face regulatory battles worldwide. Their ability to adapt and compromise will greatly impact their profitability in the coming decade. 

The Future of Streaming: Predictions and Trends

The future of streaming will see further consolidation and bundling of services. M&A activity particularly from conglomerates seeking to acquire FAST startups and successful podcast producers will increase. David Zaslav has been vocal that the industry’s survival requires consolidation through “repackaging and marketing of products together”.

Services such as Amazon and Hulu already offer bundles, allowing users to subscribe to rival streaming services within the same platform. Expect to see more partnerships like this through licensing or distribution agreements.

Live events will also become a battleground for streaming companies in the near future. Live sporting events, in particular, are structured with advertising in mind. So naturally, streaming services want to integrate live sports into their platforms to attract more advertisers. With cord-cutting becoming increasingly popular, sports leagues like the NBA, NFL, and NCAA have already been working with streamers to broadcast games. 

Thursday night NFL games have been streaming on Amazon Prime. The company also paid an additional $100 million for the rights to the NFL’s first-ever game on Black Friday. Netflix is also laying the groundwork for an eventual dive into the world of live sports streaming. Earlier this year, it hosted an all-star golf tournament featuring athletes from popular Netflix unscripted shows such as Drive to Survive and Full Swing. Disney’s live-streaming strategy involves ABC, which has broadcast agreements with multiple sporting leagues. Disney-owned ESPN is also adapting to the streaming era with ESPN+. However, with Disney’s acquisition of Hulu, expect changes. There is a possibility that live sports might appear directly on the streaming platform through an integration with the traditional cable networks.

Conclusion

The wild days of OTT streaming seem to be ending. With a major emphasis on profitability, advertising will be vital to every company’s business model. Ad-supported video content will continue to grow as an alternative for consumers. PWC reports that in 2025, advertising will surpass consumer spending as the largest category within the entertainment and media industry. Between 2022 and 2027, global advertising revenue is expected to rise from $736.7 billion to $952.6 billion annually.

The story of the last ten years was about disruption. We saw tech companies disrupt the status quo, forcing legacy studios to launch their own services to compete. Now, the next phase of the streaming wars will be about surviving in the market and retaining customers. Additionally, the United States consumer will not drive the future growth of the streaming industry. Streaming giants are increasingly courting international audiences to supercharge their subscriber growth. 

The consumers have spoken, and streaming is here to stay. But now, streaming companies, especially those attached directly to the legacy studios, must find a sustainable business model that doesn’t isolate them. The major players will consolidate networks, channels, brands, and IP under one umbrella to offer a wider range of content and capture a larger market share of increasingly nimble subscribers.

To both attract and retain these consumers, executives must begin mixing and matching the several innovative business practices that have been learned over the last decade. This includes the use of data inherent within internet delivery of content that is so important for advertisers to be more selective on where to spend their money. Media execs will need to recognise new creative content channels and rapidly adopt what audiences want.

This year will see a distinct change in strategy, from chasing Netflix to evolving beyond it.

Netflix itself may retain its supremacy as the clear winner of the Streaming Wars so far. This year may find us watching each of the Media Majors co-opting that position by licensing more content back to Netflix while they focus on offering something more to their own audiences. So is this really the beginning of the end in the Streaming Wars?  Or is this only the end of the beginning?

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