Would ‘Spotify for Hollywood’ Satisfy the Demand for Aggregated Streaming?
Would ‘Spotify for Hollywood’ Satisfy the Demand for Aggregated Streaming?
Demands for an aggregated streaming platform are rising, and former Hulu CEO Jason Kilar has a unique solution to the problem.
Streamers are well aware of the strain that the recent wave of subscription price increases has put on the budgets of customers. Make no mistake, providers are thinking about their own bottom lines first, but the fact of the matter is that the rise in costs has created an environment where viewers are more willing than ever to cancel a streaming subscription to save money. The industry-wide churn rate has risen 300% in the past four years, and streaming service owners are just starting to respond with a not-quite-new product: the bundle. Combinations of streaming services that offer customers big discounts are starting to hit the market, but former Hulu and WarnerMedia chief executive Jason Kilar thinks these bundles could be just the beginning as Hollywood’s biggest streamers seek out more ways to keep viewers engaged.
Key Details:
- Kilar advocates for the creation of a ‘Spotify for Hollywood,’ which compiles content from all major streamers on one platform.
- This aggregated service would be a clear win for consumers, who often get confused about which streamer carries their chosen title.
- Getting Hollywood studios to go along with the idea could be a major challenge, and could stimulate objections that the platform is just cable redux.
Speaking with the New York Times, Kilar said his ideal solution to rising prices and engagement problems in the streaming world would be to create a new streaming company that would license content from all major Hollywood studios, and pay back close to 70% of what it makes in revenues to those studios.
“I’ll call it the ‘Spotify for Hollywood’ path, where a large number of suppliers and studios contribute to a singular experience that delights fans,” Mr. Kilar said. “The studios would be the ones that would be taking the majority of the economic returns from such a structure.”
The idea is certainly a fascinating one. A man with Kilar’s streaming bona fides cannot be accused of simply whistling in the dark when he discusses the state of the industry, but a combined platform that features content from every Hollywood studio would be a radical new product. It’d be a little like Amazon’s Prime Video, which allows viewers to add multiple streaming subscriptions through its Prime Video Channels digital store and keep them all on the same monthly bill. But Kilar’s idea goes one step further, giving viewers a truly aggregated platform that survey after survey shows they want.
There’s plenty of data available to show that customers often get confused about which streamer has the content they want to watch at any given time. This can lead to viewers simply turning off their TVs and doing something else if they get frustrated enough, and Kilar’s idea would certainly cut down on that confusion and allow viewers to watch what they wanted, without a lot of looking around.
Who Says No to ‘Spotify for Hollywood’?
So who stands in the way of the creation of a “Spotify for Hollywood”-type service, if audiences would respond to it with such enthusiasm? For one, studios. One of the most frequent complaints from artists who stream music and other content on Spotify is that the service doesn’t pay nearly enough for their trouble. It’s easy to imagine giant Hollywood companies with market caps in the billions of dollars advancing similar arguments for not joining a combined platform.
That’s especially true considering the current state of streaming. Most streaming platforms are still losing big money every quarter, as only Max was able to close 2023 showing a profit from that segment of its business, and even then it relied on sales of HBO through cable distributors to pull it off. Each streaming service has taken a long and tortured path to building its revenue-generating abilities, and no executive currently working with a streamer is likely to just toss that sweat equity out the window for a pie-in-the-sky option that provides all content.
A “Spotify for Hollywood” service would also encounter many of the same problems on-demand streaming services already have. What live sports and news options would be available? Would viewers even want those programming choices? And all of those questions come before the inevitable discussion of price. Audiences are already complaining (with good reason) that the price of stacking multiple streaming services now approaches the cost of a cable subscription. How much would studios insist the hypothetical combined streaming service charge per month in order to convince them that the platform will pay out more in the long term than trying to continue with the current strategy of every major entertainment company offering a streamer of its own, and keeping all the revenues generated?
Kilar’s idea has a lot of merit, even if it doesn’t stand a great chance of coming into existence. Most importantly, the former executive is thinking outside the box when it comes to solutions for the future of the industry, and his opinions are all the more refreshing in a moment where it seems every streamer is following the same playbook of introducing ad-supported tiers, raising prices and cracking down on account sharing letter for letter.
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