Strike Ending & Amazon Antitrust - Streaming Services: Power Rankings, FALL 2023


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Snarf Zagyg

Notorious Liquefactionist
Supporter
I feel like it's a long time since I was actually impressed by a Netflix series, and I cancelled the service recently, so I'm not really sure about their position here. They seem to be really reliant on first-mover advantage and being more worldwide than most, but I dunno man, I feel like unless they change their days are numbered. Nobody likes them any more because they destroyed all good will towards them, and I suspect in much of the English-speaking world, they're like, one six month period of "bleh" shows away from mass unsubscription.

I think people often confuse the things that they like (and are interested in) with the things that work for most people, most of the time.

To give you a specific example, I don't care for the fold-in of the Discovery shows with the amazing HBO/Warner library; and yet, the inclusion of all of those "trash" reality shows has been a net good, in terms of subscribers and time spent watching, for Max. Because the shows are cheap, and because people like to have them on (without having to pay too much attention to them).

Netflix is doing a few things that are the envy of the rest of the industry. They have the most subscribers. They have a true worldwide presence (in terms of viewership and production) And, most importantly, they are profitable. Wildly profitable. Even with their massive outlays for content, they had a profit of over $12 billion in the year leading up to Sept. 30, 2023.

While most of the streaming services are still trying to find some way to even be profitable- including by selling off their content- Netflix is raking in the money. They have a well-oiled machine at this point.

In short, they won. The made it. The question at this time is simple- who else is going to join them?
 

Two things-

1. Netflix has won. Everyone else is fighting for second.

2. If someone, before this year started, had told me ... Suits is going to be THE streaming story of 2023, I would still be laughing now.

...and yet, here we are.
The Suits thing I personally think is good news. The biggest issue with streaming right now, imho, is that it's completely failed to fulfil the promise of streaming, which is being able to legally view the shows you want, somewhere, at least. Right now, in the UK anyway, huge numbers of shows that are relatively recent and not poorly regarded (last 5-20 years) and even larger numbers of movies from 10-50 years old are just not possible to stream anywhere. I've noticed Netflix has cut an awful lot of stuff that was sort of "deeper catalogue" - i.e. shows of the same sort of vintage as Suits - here, whilst upping prices drastically to the point where they're now more expensive than the most "prestige" UK streaming service, which basically has HBO's shows and hoovers up a bunch of other more prestige-y TV in a very annoying fashion. Hopefully this will cause them to reverse course on that. To be honest in a lot of cases I really would rather they had multiple old show rather than one new show, especially as they have a 90% chance to cull all new shows after 1-2 seasons.

In short, they won. The made it. The question at this time is simple- who else is going to join them?
I mean, like, let's revisit in 5-10 years and see if that's still the case. They were basically saying they were in trouble a couple of years ago, and now you're seemingly claiming they are godlike, unkillable, and surely there is no hubris whatsoever involved in any of this! I think they'll be a presence for a very long time, but I could easily see them fading in popularity in English-speaking countries. That might not impact their bottom line very much of course, I don't know. It would certainly impact their relevance, however.

To give you a specific example, I don't care for the fold-in of the Discovery shows with the amazing HBO/Warner library; and yet, the inclusion of all of those "trash" reality shows has been a net good, in terms of subscribers and time spent watching, for Max. Because the shows are cheap, and because people like to have them on (without having to pay too much attention to them).
Sure, but this is an interesting point to me, because I used to be able to casually watch Netflix in that way, but they've really cut down on the sort of shows that are really casually watchable, and their reality TV output, which is significant, is mostly unwatchable, like endless cake shows which feel Black Mirror like in their uniformity. I tried to background-watch a cocktail show on Netflix but it was too offensively bad. How do you make that kind of TV too offensively bad? Like I should barely be noticing it's even on! Their glassblowing show on the other was surprisingly captivating (but has very few episodes per season, I guess it's surprisingly expensive to make for that kind of show or something). Their docos are getting worse and worse too, and I know I'm not the only one noticing these things because co-workers keep bringing stuff like this up.

Given that they were in trouble recently, I just don't buy the well-oiled machine line. They were screwing up. They made a load of cuts to both the amount of content they had, and the amount they were making, and fired a bunch of people, and they raised prices vastly beyond inflation, whilst squeezing really hard on password sharing. And you're saying, oh they're so smart, they'll keep making $$$ forever (that's how I understand "they've won" - maybe that's not what you meant though, but to me "won" implies nigh-permanence in this context), and I'm like, will they? They can't keep doing that repeatedly. You can squeeze password sharing ONCE ever. That's it. You're done. You can fire a bunch more people but then there'll be hardly anyone working there. If they raise the prices again by the same amount in the UK, they're going to go through £20 barrier, and I guarantee that will cause a lot of cancellations and annoyance with them generally (I dunno if the US has a similar perceptual barrier at $20 or if it's more like $30).

They've made themselves very profitable temporarily, after struggling.
 
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Ryujin

Legend
I wish that streaming services would work a little harder at homogenizing content across different regions. I would really, REALLY like to watch season 2 of Alan Tudyk's "ConMan", for example, which I recently found was available on Prime in the United States, but is not available in Canada. I found this out on the second to last day of a trip to Seattle and let my friends there know it was available, but couldn't watch it myself in the time remaining.
 

Snarf Zagyg

Notorious Liquefactionist
Supporter
Given that they were in trouble recently, I just don't buy the well-oiled machine line. They were screwing up. They made a load of cuts to both the amount of content they had, and the amount they were making, and fired a bunch of people, and they raised prices vastly beyond inflation, whilst squeezing really hard on password sharing. And you're saying, oh they're so smart, they'll keep making $$$ forever (that's how I understand "they've won" - maybe that's not what you meant though, but to me "won" implies nigh-permanence in this context), and I'm like, will they? They can't keep doing that repeatedly. You can squeeze password sharing ONCE ever. That's it. You're done. You can fire a bunch more people but then there'll be hardly anyone working there. If they raise the prices again by the same amount in the UK, they're going to go through £20 barrier, and I guarantee that will cause a lot of cancellations and annoyance with them generally (I dunno if the US has a similar perceptual barrier at $20 or if it's more like $30).

They've made themselves very profitable temporarily, after struggling.

I am going to address this briefly, given this seems to be a popular misunderstanding. Moreover, it seems to be driving your analysis (which I already detailed was ... not in keeping with the actual market conditions).

They did not make themselves profitable temporarily. At all. Netflix has always been profitable. Looking at the trailing 12 months, they have been profitable since 2009. What is notable is that they have pivoted from being "kinda profitable" ($1-$3 billion) to "super profitable" (more than $10 billion). The trend was always positive, but was supercharged in the last four years ... and has remained at that level.

Why does this matter? Because Netflix is the only streaming company that is able to do that. Every other streaming company has been operating at a loss, and has been attempting to find some way to get to profitability (with the exception of Hulu, which is its own category, and largely because of the number of ad-supported subscriptions).

But what about those problems you might have heard about? Well, those weren't related to profitability. Instead, it was about Wall Street turning sour on the stocks- they hammered the stocks of streamers because they were no longer overvaluing them because of growth (in effect, subsidizing the acquisition of subscribers). But while the hit on the stock price wasn't great, and growth slowed, the underlying profitability was always there. Moreover, those issues hit other streamers much harder than Netflix ... because Netflix was actually profitable, and had the most subscribers.

Contrast that with the other streamers.
Prime is heavily subsidized, and is currently facing a massive lawsuit from the government regarding those subsidies. It is unlikely that they will continue to burn money for our benefit given the legal issues as well as the internal issues (which I have covered in prior posts).
Disney+ is heavily subsidized, and the parent company has a lot of debt and is struggling with a path forward given the amount of capital expenditures that are necessary (parks business, Hulu acquisition etc.) as well as the Peltz issue.
Paramount+ and Max are "pure plays" with libraries, but have not yet even hit the point of profitability, and have pivoted to licensing their content to other streamers in order to maintain profitability; in effect, going back to acting like more traditional Hollywood studios, and less like "walled garden" streamers than keep everything in-house.
Apple+ is subsidized and has high quality, but Apple has shown no signs of acquiring a large library or another streamer (perhaps for antitrust reasons) and has a small subscriber base. In effect, they are just burning money for our benefit. Great for us!
Peacock, because of the Comcast ownership, won't be allowed to fail, but is still an afterthought for most people.

As I've repeatedly mentioned, Reed Hastings, in 2013, said, "The goal is to become HBO faster than HBO can become us." That's what they did. They licensed the content to start, and then (when the content was pulled back) they were able to make their own using the revenue from their vast subscriber base. And now we have gone full circle, and not only are they continuing to make content while maintaining profitability, but they are able to go back to licensing content and make it a hit since other platforms can't (Suits, for example ... a show that was on Peacock that no one was watching).

This doesn't mean that they will be successful forever. They still have challenges; for example, they do not have a FAST service. And their ad-supported cheaper version is not as prevalent as they want it to be (fun fact- the services make more money per subscriber off of the "discount" ad-supported services than they do off the premium, ad-free services).

But of all the streaming services, they have positioned themselves best given the Wall Street retrenchment and the winds facing the industry.

Looking at this in terms of content you like doesn't matter in terms of the overall industry. Even things that you believe matter (such as Netflix cutting shows after a few seasons) ... doesn't actually matter. Why? Because while we can both lament this, the metrics don't lie. The vast majority of shows get more expensive as the seasons go on, and the viewership declines. Which means that for most of the shows, no matter how beloved, juice isn't worth the squeeze.

Anyway, the whole point of these posts was to cover the business side.
 

Peacock, because of the Comcast ownership, won't be allowed to fail, but is still an afterthought for most people.
You know if not for the various deals that were done when it was shopped for syndication (which I think is coming to an end based on the comments on its Reddit sub and my own experiences) the whole of Law and Order (seasons 1-20) could put a large bump into the paid subs for Peacock.
 

Snarf Zagyg

Notorious Liquefactionist
Supporter
You know if not for the various deals that were done when it was shopped for syndication (which I think is coming to an end based on the comments on its Reddit sub and my own experiences) the whole of Law and Order (seasons 1-20) could put a large bump into the paid subs for Peacock.

I mean ... maybe?

I think that what we are starting to see is that the streaming services are realizing that there are different types of programming. There is the type of programming that drives new subscribers- this is usually "event programming," like new (and well-known, and much hyped) movies and series, or continuations of new series.

Then there's the programming that keeps subscribers- the "sticky" programming. The back catalog of old reliable shows, and movies, and reality TV that you put on because, well, it's there, and your subscribers will put it on because why not?

I don't think that Law & Order would actually drive many new subscribers. The number of people who will demand to get Peacock just because it has Law & Order is vanishingly small. However, that's the type (and amount) of sticky programming that would keep viewers on the platform.

As an aside, that's why there has been such an interest in live sports with the streamers recently. Fans of teams and sports will consistently pay to get access to those teams and sports, and that's why we've seen the surge in interest in the streamers (AppleTV+ with MLS and MLB, Max with a new sports tier, Peacock and Paramount leveraging their CBS and NBC sports content, and Prime with Thursday NFL games, and YouTubeTV- I never mention them, because they're not really a content streamer in the same way- with NFL GameDay). Sports is a known driver of new subs.
 

I mean ... maybe?

I think that what we are starting to see is that the streaming services are realizing that there are different types of programming. There is the type of programming that drives new subscribers- this is usually "event programming," like new (and well-known, and much hyped) movies and series, or continuations of new series.

Then there's the programming that keeps subscribers- the "sticky" programming. The back catalog of old reliable shows, and movies, and reality TV that you put on because, well, it's there, and your subscribers will put it on because why not?

I don't think that Law & Order would actually drive many new subscribers. The number of people who will demand to get Peacock just because it has Law & Order is vanishingly small. However, that's the type (and amount) of sticky programming that would keep viewers on the platform.

As an aside, that's why there has been such an interest in live sports with the streamers recently. Fans of teams and sports will consistently pay to get access to those teams and sports, and that's why we've seen the surge in interest in the streamers (AppleTV+ with MLS and MLB, Max with a new sports tier, Peacock and Paramount leveraging their CBS and NBC sports content, and Prime with Thursday NFL games, and YouTubeTV- I never mention them, because they're not really a content streamer in the same way- with NFL GameDay). Sports is a known driver of new subs.
I don't think it's vanishingly, small maybe. As it stands there is no single place online or off to watch all twenty seasons. Peacock itself only offers 13-20, prime for purchase only offers 1-2, then 16-20. The last few channels on the broadcast channels that offered it have been replacing it with other shows. The DVD collection can run from 123 USD$ and up, while the individual seasons can range from 25USD$ and up. Like I said from the discussions I've seen and been a part of I think there's a sizeable group that would be willing to shell out for the premium peacock if it offers all 20 seasons of the OG L&O and to keep paying for the sub.


The other thing with sports is blackout dates which meant that some games weren't on TV in your local area for whatever reason, which drove the old sports packages of satellite providers My brother is a big Chiefs fan, so he would pay for Directtv's football package if he could spare the money. This past year he spent considerable (to me) time comparing the various sports packages that the streamers offered along with any extras like NFL Red Zone and the like.
 

Snarf Zagyg

Notorious Liquefactionist
Supporter
I don't think it's vanishingly, small maybe. As it stands there is no single place online or off to watch all twenty seasons. Peacock itself only offers 13-20, prime for purchase only offers 1-2, then 16-20. The last few channels on the broadcast channels that offered it have been replacing it with other shows. The DVD collection can run from 123 USD$ and up, while the individual seasons can range from 25USD$ and up. Like I said from the discussions I've seen and been a part of I think there's a sizeable group that would be willing to shell out for the premium peacock if it offers all 20 seasons of the OG L&O and to keep paying for the sub.

.... I would only mention that a reddit sub with fans of Law & Order is not likely to be the best place to find out whether or not there is a widespread desire to pay for Law & Order.* After all, there are a number of people (many of them commenting here) who love Babylon 5 and were thrilled that there is a real re-master available on Max, and yet I do not believe that greatly moved the needle for new subs.

Again, in saying this I think that the entire back catalog of L&O would be great for stickiness, despite the age. But it's just not a big driver. IMO, ymmv, etc.


*In much the same way that I doubt that a vocal community on reddit would likely cause any of the major streaming services to add more tentacle lovin' shows ... it's just not a major driver of new subs, no matter how, um passionate some fans are.
 

Forget content-Netflix has the best interface of all of them

Disney-why doesn’t say the mandalorian/Loki show on the front page as do you want to continue to watch. I don’t want to have to scroll around and find it
Some of the others such as paramount/apple/ etc. am I actually on the correct picture to watch Ted lasso/etc or did I click on the line above

HBO/prime-trying to search through the library is not as user friendly as Netflix

The other night I binged watched bodies on Netflix. I haven’t binged watched anything on their networks as they have all gone into weekly shows

I get more more bang for my buck on Netflix than any other streaming.
Disney 1-4 shows. I will go long times between watching it and when my oldest moves out it’s the first to go
HBO-usually got/spin-off plus movies that drop from on demand
Paramount-Yellowstone and some content
Apple-starting shows so jury is out
Paramount plus-Star Trek and now Tulsa king

I’m paying a lot on most for very little
 

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