Analysis: Flat Net Streaming Gains Since 2020 Show Why Your Favorite Service is Removing Content
How long does it take you to decide what you’re going to stream next once you’ve finished your current show? The average streaming customer now takes more than 11 minutes to decide what they’ll watch next, and 69% of streaming users say they’re considering signing up for a new streaming service for just one show, then canceling before a new billing cycle hits at some point this year.
These are both symptoms of a larger problem: the streaming marketplace is oversaturated. A new report from the Wall Street Journal puts that issue front-and-center, demonstrates why streamers like Disney+ and Paramount+ are purging content at the moment, and shows what the future of the streaming marketplace may look like if things continue as they’re going.
The Journal cites data from Antenna which shows that since 2020, net streaming subscriptions in the United States have remained essentially flat. Study after study has shown that the number of American consumers with a streaming subscription has hovered between 80-90% for years, which is confirmed by the new data from Antenna. Americans are subscribing to streaming services at a much higher rate than they were three years ago, but they’re also canceling those subscriptions much faster.
From a consumer standpoint, the problem is that their favorite shows are now all on different services. If you want to watch new episodes of “The Bear,” then come down from the anxiety with a friendly episode of “The Office,” you’ll have to subscribe to Hulu and Peacock. There are too many services housing popular shows to stick with just one platform, and canceling a subscription is too easy not to cycle between streaming services to save a little money while waiting for new episodes of a chosen show to arrive.
That’s one of the big reasons that Wall Street analysts no longer prize subscriber numbers all that highly. Stock prices no longer skyrocket when a company like Disney announces it has added 10 million global streaming subscribers in a quarter; now, investors want to see if a company can demonstrate profitability. As of now, only Netflix can consistently turn in big profits, though Warner Bros. Discovery showed a small profit of $50 million from its streaming arm in its first quarter.
The path to profitability is not an easy one to walk, which explains why so many streaming services are cutting content these days. It costs media outlets money to continue making server space for streaming titles that don’t pull in viewers, and they have to pay ongoing fees to content creators as well. If a particular title isn’t getting enough engagement from users to make money instead of costing money, it has to go, no matter how devoted its fanbase is.
That’s why Disney began removing titles from Disney+ and Hulu in May, and is likely just now finishing that process. Paramount began nixing titles from Paramount+ in late June, and its efforts may continue for another few weeks. WBD’s content cuts were well-documented last summer, and though they were met with derision they are a big part of the reason the company saw a profitable first quarter this year.
WBD CEO David Zaslav hasn’t won many friends with the way he’s executed his strategies at WBD, but his methods have given other streamers a blueprint. Zaslav also thinks that there will have to be more aggregation in the future of the streaming market, and that the hundreds of streaming services currently available will have to be combined into larger streaming platforms if streaming is to become a truly profitable business.
Indeed, many streamers are already taking their first steps to aggregate. HBO Max brought on most of discovery+’s programming in May to become Max. Paramount+ no longer offers Showtime as a standalone streaming service, having integrated it with the Paramount+ Premium tier on June 27. Disney is planning to combine Disney+ and Hulu into a “one-app experience,” and Comcast will integrate Peacock into the new Xumo streaming platform it is developing with Charter Communications.
It can be hard to understand the behavior of massive media companies at the corporate level. Customers are quite understandably not assuaged when it is explained their favorite show was cut from a streamer because the multi-billion dollar company that owns it wasn’t making enough money from it. But the streaming marketplace is undergoing a fundamental shift, and its future is almost certain to look very different from where it sits today.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.