Until now, streaming services have been competing head-to-head for growth, but now they are also required to show financial realism.
Bridge this week I fell in love with TV series again. HBO has it great The Last Of Us, which has made my relationship with mushrooms completely new. I got professional baby care from Disney Alaska Daily –from the series where Hilary Swank plays an investigative journalist who moves to cold regions. Due to lack of time, I haven’t even dared to look for series on Netflix, but I watched a few successful movies. Nothing new from the Western Front was the most impressive of them.
To the same at a time when addictive content seems to be enough, streaming services report dramatic news. Right now, the focus is on Disney+ in particular. Streaming service launched in 2019 told this week having lost subscribers for the first time since its launch. The number of subscribers to the service has decreased by approximately 2.4 million compared to the previous quarter. Disney’s assessment of the situation was blunt: it announced that it would lay off 7,000 workers to cut costs. In the past, large layoffs have been caused by the merger of Warner Media, which owned HBO, and another media giant, Discovery.
Also Netflix’s figures show that the biggest growth is behind us. Last year it lost a huge number of subscribers and launched a cheaper subscription option with ads. The strategy seems to have worked, because now in January the direction has turned upwards again. In the last quarter of last year, the market leader in streaming services gained almost eight million new subscribers.
Partly it’s a matter of returning to normal time. As the pandemic closed people indoors, streaming services enjoyed an extraordinary boost, and Disney+’s growth, for example, continued until the last half of the year. Since then, however, the world has opened up, and people have come up with the most attractive ways to spend their time. And his money: for example, an investment bank According to JP Morgan only 15 percent of consumers would be willing to pay for three streaming services.
Equally According to the law, the issue of layoffs is the tightening of the investors’ face. Until now, streaming services have been competing head-to-head for growth, which has been reflected in cheap subscription prices and free offers. Now, however, they have started to demand financial realism, which can be seen as unpleasant announcements either to customers (income) or employees (expenses). Otherwise, the trigger may have a working wire (bosses). In January, for example, HBO Max announced price increases for the first time in its history in the United States, and it may not be the last.
Very the easiest way to correct course is Netflix. According to its own announcement, the service has up to 100 million users who access streaming with someone else’s password. This year, the plan is to put an end to parasitism with the reform, which is gradually progressing to different countries. It is not yet clear how or when the new practice will be extended to Finland, which has thousands of cottages, but it should be clear that in the future the aunt living in Kuopio will not be part of the Helsinki family’s household.
About turbulence despite a very raucous playoff game, it is difficult to predict the situation. HBO MAX has just under 100 million subscribers worldwide, Disney+ has over 160 million and Netflix has around 230 million. In addition, the trend seems to be towards the emergence of even bigger streaming giants, which is also predicted by the merger of Discovery and HBO Max starting this spring. In addition to the trio, Amazon Prime, for example, will continue its progress, but otherwise the streaming service’s gigantic start-up costs protect established players from competition.
For the consumer the austerity of the streaming giants is possibly reflected in less surprising content than before. As the belt tightens, the services invest in their surest hits and productions that fall short of the targets are quickly stopped. It is likely that the different ordering options will also increase even more. One possibility could be, for example, a model common in audiobook services, where usage is paid for according to a certain number of hours. In this way, a marathon viewer following five series at the same time would pay more for his subscription than a casual binge-watcher.
Always of course, instead of hunting for killer mushrooms, you could go on a forest trip yourself. Or start running. From The Bear although they say a new season is coming. Likewise About Perry Mason.
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