Streaming was seen to be a game changer for the entertainment industry. It was meant to usher in a new era where most content would be available online and make cinemas and physical media obsolete. This bright future has not come to pass and now we are starting to see signs of the streaming crunch.
Netflix was a disruptor to the film industry and distribution. Their move to streaming became incredibly popular and their actions, along with Amazon Prime and Hulu, meant a wide range of content became available to users at an affordable price. This trio reduced piracy and physical media sales fell since they were seen as a replacement. However, in Hollywood when the executives see success, they try to copy it without understanding why. 2019 saw many companies launching their own streaming services, like Disney+, HBO Max (now Max), and Apple TV+. Many of these streaming services had a false boom during the Pandemic since the majority of people were stuck at home.
Even during this golden period, there were warning signs. The pandemic saw the launch and quick demise of Quibi. Quibi was designed to be a streaming service for the smartphone generation with programming designed to be watched as short content on their devices. They managed to acquire shows featuring Liam Hemsworth and Anna Kendrick. It proved that star power was not enough to sell a streaming service.
The business model for many streaming services was rapid growth. The more subscribers a service could attach the higher the stock price can go. However, constant growth in business and the economy is impossible and at some point, sustainability has to become the goal or else there will be failure.
For a long time streaming services marketed themselves as more as a cheap alternative to cable/satellite TV and other forms of media. When Netflix launched it cost $8 months, whilst Disney+ was $6.99 and Apple TV+ was $4.99. These low prices did hook in subscribers, but the high cost of production and operational costs meant that most services weren’t profitable. Now streaming services have taken unpopular measures to make themselves profitable.
There have been some massive price rises within the streaming market. Now a standard Netflix subscription costs $15.49 a month, whilst a premium subscription is $22.99. Whilst Disney+’s monthly fee is $13.99, or $139.99 a year. Subscribers are getting sick of these of these price rises. Disney+ announced in February 2024 that they lost 1.3 million subscribers after the price hike and the service had losses of $300 million between October to December 2023.
Streaming services have now started to introduce tiers and commercials. Traditional media made the majority of their revenue from advertisement, and even in the age of streaming events like Superbowl command a premium for a commercial slot, especially during half-time. Netflix and Disney+ have introduced lower tier, which would play commercials, whilst Amazon Prime has forced users on a standard plan to have commercials, and they would need to upgrade if they want to have no commercials. I live in the UK and ITV, Channel 4, and Channel 5 have run their streaming services with an advertising model, and services like Tubi and Plex have found success using the same model. Audiences would be prepared to pay a fee or watch adverts, but find it hard to do both. In May 2024, Tubi had more viewers than other major services like Disney+, Max, and Paramount+.
When streaming services launched, many of them stated that people could share their passwords. Netflix even said in a tweet “Love is sharing a password.” Now that streaming services have audiences hooked, they are cracking down on password sharing. They’re like drug dealers, give people a taste, and then exploit users for all their worth. Netflix started the trend to crack down on password sharing, claiming subscriber numbers when up. Disney is planning to follow in Netflix’s footsteps. There was an uproar when Netflix and other streaming services announced they would crack down on password sharing, but I do have some sympathy for the companies because some people may use the service without paying. However, there should be provisions for families, shared households, and people who travel. One of the advantages of streaming was that people could watch it anywhere and that should be preserved.
A move by streaming services that people have found more egregious has been the content purges. There was a boom in content production with services scrambling for shows, movies, and properties. South Park made this joke in the episode “Franchise Prequel.” I met people who were optimistic about the future because services were looking for content. One of the selling points was exclusivity: if you wanted to watch certain shows or movies then you needed to subscribe to a certain service. This promise was broken in 2022 when Warner Bros. Discovery started purging content. They started with Batgirl and Scoob! Holiday Haunt which were set to be released on HBO Max but were cancelled. Disney+ and Paramount+ followed by removing a lot of shows and films with some only being on the service for a few months. I reviewed Rosaline and The Princess who were only on Disney+ for a few months. Some of the most infamous causalities were the Willow show which was only on Disney+ for six months despite it being based on nostalgic branding, and the film Crater which was only on Disney+ for six weeks before being removed. The backlash against Crater’s removal forced Disney to release the film for digital purchase. Such content purges are disrespectful to audiences and creators.
These films and shows were removed because studios could turn them into tax write-offs. These removals were callous, but it also shows one of the biggest issues with the streaming market: most of their films and shows haven’t been profitable and that’s why they have been written off. Even people with only a basic understanding of business question how Netflix can make money from films costing $200 million if they don’t release them in cinemas or on home media. Studios have destroyed their tried and tested business model because they were chasing the streaming dragon. Films used to be released in cinemas, then on home video as a rental or purchases, and finally get revenue from the broadcasting rights. Hollywood is trying to turn the clock back with studios like Warner Bros. and Disney saying they are going to focus on theatrical releases.
Film Stories pointed out that films released straight-to-streaming have to make an impact straight away or they are forgotten. Streaming services have created a culture of giving audiences new content constantly so nothing is allowed to flourish. Would films like Blade Runner, Withnail and I, or Donnie Darko have earned their cult status if they were released now? The golden age for creatives has now become a living nightmare.
During the height of the streaming boom, it was easy to see many people go on social media to claim that cinemas and physical media were dying and that streaming and digital media were going to replace them. However, I have noticed these people are no longer as vocal about the merits of streaming and digital media and social media users are now talking about the importance of physical media. Any conversation or debate on social media should be viewed with caution since the most enthusiastic are the ones who are the most likely to comment on the internet. However, customers have realised the pitfalls of a digital media landscape, and websites like Film Stories and Joblo have reported on issues involving physical and digital media.
In the UK Disney has licensed Dopesick and The Dropout to the BBC and there were broadcast on TV and available on BBC iPlayer. There were shows that were made for Hulu and available on Disney+ in the UK. Despite Star Trek being one of Paramount’s biggest properties and Paramount+ was meant to be the home for Star Trek, the company has licensed the original ten films to Max and they are currently unavailable on Paramount+. HBO has made a deal to license some of its shows on Netflix, such as Insecure, Band of Brothers, and Six Feet Under, even though they are owned by Warner Bros. Discovery. This has turned streaming into a confusing merry-go-round as audiences have to try and keep up with which films and shows are on which services. This is one of many reasons why I am a vocal proponent for physical media.
When Netflix’s share price dropped it led to the company to lay off staff and make cutbacks. Animation was an area that was particularly hard hit, even though Netflix has been able to produce some well-created films and shows the company announced in 2023 that they had cancelled two films in pre-production, cut 70 jobs in the department, and outsourced productions. This corresponds to a wider trend in the entertainment and tech industries where there have been a growing number of layoffs: Facebook, Amazon, and Pixar are all companies that have laid off staff in the past couple of years.
In April 2024 Netflix announced their plan to pivot to making more mid-budget films. Some of their upcoming films include a Happy Gilmore sequel and a thriller by Kathryn Bigelow. Another reveal in the announcement was Netflix would have more sporting content with them planning to broadcast NFL games at Christmas and they had struck a deal with WWE. Netflix is also set to broadcast the Jake Paul vs. Mike Tyson boxing match.
When John Landgraf, the CEO of FX spoke to The Hollywood Reporter in February 2024, he stated that ‘there are more streaming services than the market can bear.’ I am seeing that in the UK. Lionsgate+ was one of the biggest services to close in the UK, and they closed their service in Australia, Sky and Now TV customers had access to Peacock, but that service closed in January 2024, and Sundance Now was a smaller service that had shut down. Britbox also closed in the UK and its content has become a part of ITVX.
Streaming services are starting to merge and bundle together. In the UK ITVX and StudioCanal have bundled together and customers can have access to their libraries for £5.99. One of the most logical mergers was between Disney+ and Hulu since they are both owned by the same company. Disney+ in the US has become what it’s like across the rest of the world since Hulu content was on Disney+. Paramount has closed their SHOWTIME streaming service and all of their content was rolled into Paramount+.
In the States streaming services are starting to bundle together. In February 2024 broke the story that Paramount+ discussed a deal with Comcast to bundle Peacock, whilst Disney and Warner Bros. announced that Disney+ and Max are going to be offered in a bundle. There are jokes and memes about streaming turning into cable and cable has been reinvented for the modern day.
Compared to other areas in the film and TV industry, streaming services are a lot more secretive. They can self-report their numbers and there’s less transparency. Netflix announced they were going to stop reporting their subscriber numbers from the first quarter of 2025. Instead, they would report when major milestones get crossed, but this is a sign of a sector lacking confidence. Netflix has been considered the winner of the streaming wars, so goodness knows how their competitors are doing.
The golden age of streaming has long gone because of the rising prices, fragmentation, and lack of content security. The streaming market has moved from rapid growth and its next phase of being stainability, which means there will be price raises for customers and cost-cutting. The current market has become untenable, there will be mergers, alliances, and closures with companies licensing out their content. The question will be what happens next? Streaming might become more centralised like it did before the streaming wars, but its price will be a lot higher which might force some difficult choices for companies and customers.
100% agree. long live physical media.