Streaming Is a Black Hole of Financial Loss

  1. So, are we going to start seeing this return to companies breaking up their streaming services and selling off their shows and movies back to the likes of Netflix and Amazon Prime? It seems they were in the black when they did that.

  2. The industry is just struggling with itself to evolve. Reminds me of the music industry when digital era popped and then streaming.

  3. Not for shows. The companies predominantly made shows for cable then made additional money by selling it to a streaming platform. With some exceptions, cable is no longer viable as the main source of revenue.

  4. Sony never made a streaming service(*edit: they had crackle and sold it off) and is one of the biggest winners of the streaming wars. They can sell whatever crappy movie they make to the highest bidder and are having record high profits because of it. Companies shilled out millions for morbius. Morbius. Yes, Morbius. They are an arms dealer selling to all sides.

  5. I never understood the push to build an entire infrastructure to stream IP independently when a licensing deal with Netflix is on the table for pre-existing content.

  6. I think it's one of those situations where the king died (cable) and everyone said "we don't need a king, we'll start our own kingdoms". And now they're struggling to maintain, and a king is poised to take over.

  7. It’s a black hole for my wallet too. So many different services. I miss the old Netflix, where it wasn’t just about original content.

  8. Production companies were in the black because Netflix and Amazon were in the red paying too much for content

  9. That was before "cutting the cord" was as common as it is now tho. They may not be able to survive on cable subscriptions anymore.

  10. No, it's going to be ad supported streaming. In the paramount call they had a slide that showed how today there's two paid versions but in the future the only option will be "free, ad-supported streaming" - which is exactly TV and exactly why an entire generation migrated away from TV

  11. The problem broadly is that the whole of the market has changed to the point where that's no longer viable. The reason why that was possible in the past is because they could have a show on TV earning money and then what they got off of Netflix was just extra.

  12. You’re also going to see advertising jump into online streaming more cuz it needs the ad rev sales. Sadly peacock has the best sustainable model just not much great content. It will eventually look pretty similar to cable due to financial stability and upper echelon greed

  13. One can only hope. Streaming was awesome for everyone back when Netflix had licenses for everything. Right now I'd need to pay hundreds of dollars monthly to stream everything I want to watch so instead I'm making choices and not continuously subscribing to any one service. It's not convenient and I doubt it's profitable this way...

  14. They all saw Netflix with a zero sum gain where "If Netflix is making that much money then we are LOSING that much money!" instead of seeing it as a net gain for both of them to just sell Netflix / Hulu / etc their license.

  15. They need to figure out how to retain the drive-by subscriber. I'm not sure if it can be done. We're currently subscribed to HBO Max. We're watching the content that interests us and then we'll unsubscribe. There's no reason to keep paying $15 per month until they get another month's worth of stuff we want to see.

  16. I have Netflix and Disney plus for the kids. I subscribe on and off 1 month at a time to hbo, Showtime, Starz, Hulu, Paramount plus, Apple TV + etc once they have enough content for me to consume. None of those services have I even considered continuing at the end of the month. It may honestly make the most sense for them to offer ridiculous discounts on yearly subscriptions for new customers. Like $10 per month or $60 for your entire first year.

  17. The solution imo would be to have a monthly fee, have a much much more valuable 3 month fee and have an even more valuable yearly fee. Do what theatres do to small med and large popcorn.

  18. This is what I do and my friends think I'm crazy. I save hundreds every year because I only have 1 of the bigger ones at a time. They think it's crazy to remember all the subscriptions but it's literally just one at any time.

  19. That used to be Netflix. Everybody had that, and then ping-ponged around different vendors for the second account. Not anymore, as Netflix realized some time ago.

  20. That's fairly simple, stop releasing stuff all at once, which I think just Netflix is doing now (?), I keep finding myself prioritizing shows that are weekly instead as it means I can chat about them with my friends

  21. I wonder if that's actually the case. I think they need to ENCOURAGE the drive-by subscriber. Most people don't want to bother subscribing and unsubscribing they'd rather it be worth to just stay and if its not they won't bother at all. They need to make the process easier to subscribe for as long as you like and then just give a discount to the people who choose a permanent/yearly subscription.

  22. No, it’s just a saturated market. When every greedy movie studio, every TV channel creates their own streaming service it gets hard to compete. Content quality has gone down, stretching a 90 minute documentary out to 4 1 hour episodes. It’s a bubble that’s about to burst.

  23. Yeah I think this critic just doesnt know what competitition in the film and TV looks like because it's been so long. This diversification of streaming services is bad for consumers in the short term, but it's also going to force services to offer incentives to customers to join, in order to swim rather than sink. The market will stabilize into fewer services who offer more to customers. Then, after a period consolidation, they will grow fat and lazy with their large market shares and start gouging subscription prices again, starting the cycle over agilain by making room for a low cost disruptor.

  24. This isnt even a hindsight thing. This was very easy to predict. Years ago we were all saying it. How the big studios didnt realize they dont have enough original content to support their own platform is beyond me. They shoulda just chilled and laughed as the major players license their products for ridiculous amounts of money.

  25. Yep. They are all fighting for market share and some will go bankrupt. Netflix has gone for quantity over quality and suffered.

  26. Exactly. Companies are cutting corners and making bad decisions. They're treating their customers like the enemy rather than their patron. We're going to see multiple streaming services die and IP holders are going to come limping back to big names or fall under a new consolidated umbrella. And then after a period of solid profits and good content... They'll try it again because apparently they forgot what smashing their groin with a hammer felt like so they want a reminder.

  27. People shit on netflix for the price hikes, but don't realize others haven't followed suit yet because they're still trying to attract subscribers. Almost every streaming service besides netflix is losing money, and their goal is to grow enough and then price hike it into profitability (except for maybe apple and amazon who use their services to get people into their ecosystems and build out their catalogue of services).

  28. I don’t know that they will. For several players (Disney, Paramount, WBD) streaming services can function like loss leaders (or basic cable channels) as a part of their larger portfolio. They don’t need to be more expensive, as long as they don’t spend billions on original content - which they don’t as long as theatrical releases and back catalogs and broadcast/cable network productions keep getting rolled into the platforms.

  29. I keep Netflix because it works when other services don't. Their stability is the reason I always look for something to watch there first.

  30. Hard to pull of because you would want to entertain your subscribers basicly every week so they wont cancel after 1 months and resub when something interesting comes up again.

  31. I tried to see the 365 films on Netflix. Its terrible soft core porn with oily people set in Greece(?) that got some attention with an offensive concept: A gangster who looks like a model can force a woman he kidnapped to love him in a year/365 days.

  32. Hbo is pretty much this. I would say there’s no shortage of things to watch. I’m not able to binge shows though, so it my list long of things to watch

  33. AFAIK, the closest thing we have to this is Apple TV+. ATV+ is nice in where it's only $5 a month ($45 a year if you have Costco membership), all without ads, and can be watched without Apple hardware (I watched on my PC, through Firefox browser), although I needed to redeem my free trial through my iPad.

  34. I think the most interesting part of this world is that the streaming providers have decided they need to provide so much new content. Much of the financial lost is simply debt service on stuff that isn't that valuable simply so they can claim to have a bigger library.

  35. The streaming companies have been offering unsustainable low subscription prices while spending all of their available capital to generate content in an attempt to capture market share. It was fine to put Hollywood Blockbuster productions on a streaming service and lose tens of millions of dollars because you were increasing your subscriber count and market share for later on down the road.

  36. It feels like everyone here, including the author of the article is forgetting that Netflix has been generating a profit for like 10 years now. They aren't Uber or Airbnb. They are actually making money, despite spending so much on creating new shows/movies.

  37. The problem is, you still have big hitters like Netflix and Amazon that are already past the honeymoon phase and are generating revenue. The other companies have to keep playing catch up and keeping low prices if they want to compete. Less and less companies will attempt to compete when they realize what a money loser it is to try to catch up to them. It's not going to go down like cable because it's on the internet and anyone can pick any service they want. With cable they used regional limits to make people pay or get nothing. Cable was a series of monopolies that were regional. Streaming so far is not a monopoly, they have to be competitive. This is a healthy consumer friendly market. The bad thing would be for one or two companies to get a monopoly and leverage it to drastically raise prices. Netflix had a monopoly for a long time but refused to raise prices. We'll see what the future holds but for now it's going to stay low prices and cut throat.

  38. Nobody wants to pay premium for cheap reality TV content. They're going to have to explore ad based options for the people who will only watch trash for free, which will take them a couple years to get right

  39. Between ads and cable carriage rates, I wonder how much a network like FX made per viewer per month in the pre-streaming era. Would it have been more than $10?

  40. Price increases aren't the answer, though. People will just be forced to choose between 1-2 streaming services. Many will shut down.

  41. They need to look at Amazon. Amazon streaming doesn't need to be profitable. Increasing prime subscriptions gets people to the other Amazon services. Such as shopping on prime which is Amazon's main revenue source.

  42. At the beginning of the pandemic all the headlines read something about the end of movie theatre’s… now that things are open they read as the end of streaming… The thing that is true to me is that clicks for money have created a social conversation of swings from one far end to another and we are missing the middle points where things actually work

  43. There is a slide from a Warner Brother conference call this week that is going to be the blueprint on streaming for the next decade. Streaming is going from a loss leader to being just another revenue stream along side linear, merchandising ticket sales.

  44. I was gonna comment that streaming is suppose to increase stock prices, like Netflix had a market cap of 300 billion dollars. Who cares if you lose some money aslong as shares go up.

  45. It just got spun out of AT&T, and merged with Discovery. On paper Discovery bought it, so the resulting company is carrying over $40B in debt.

  46. Streaming generally increases stock price as it is reliable revenue. You are no longer dependent on every film or show being a hit. It is the same for content being licensed. It allows them to either get a large payout to produce more content or long term revenue. The cable licensing was based on how much ad revenue the network could produce. Now it is a bit more reliable.

  47. Netflix’s cap will continue to go down as it becomes clear that their profit was buoyed by cheap debt. As others have said WB already has a fuckload of debt so they can’t hide their losses behind loans.

  48. Maybe we should just realize the golden age is over and we should be paying everyone in entertainment a lot less than we have been.

  49. Included in the article is a reference to the Disney bundle channels, including Hulu and ESPN+. ESPN+ is utter garbage for any real live sports.

  50. The problem is that all of these competing platforms try to justify their service by giving it lots on content. But to do so quickly, they're resorting to basically the equivalent of shovelware.

  51. I like the way Apple TV has done it. They only pump out a few new shows every couple months, and each one is handled with a lot of care with great staffs behind it. They have content that ranges from prestige, to just average, but almost none of their stuff is bad. Granted, Apple has more money than God so they can prop up their streaming service with cash for the next 20 years and they wouldn't care about losing money.

  52. It's only a "black hole" because they expect a constant % profit increase and are paying the CEO and upper level managers way too fucking much.

  53. The article comes across as catty but I like how he pushes the knife just that little deeper into their superhero content

  54. I'm just gonna say it: CW DC at its best is better than a fair chunk of what we've seen so far from the DC cinematic universe. Compare the best seasons of Arrow and Flash to your average snyderverse movies. Those strong seasons are way more entertaining, with better characters and better writing than a lot of the big budget DC movies. The only edge the movies have is in effects and set/costume production. But even the CGI is eyebleedingly terrible in some of the Snyder movies.

  55. I guess I'm in the minority, but give me a low stakes Batman/Batfamily project. The city or world doesn't have to be at risk. Just a killer in a flashy, gaudy costume. The Battinson movie was 95% of what I wanted in a Batman movie. Give us more of that.

  56. None of this means anything really. There’s an incredible amount of garbage programming out there. Most of it should be tossed in the garbage.

  57. People like garbage programming. Don’t gate keep content. The problem is exclusives it’s not garbage content

  58. It seems pretty obvious to me now that streaming is not a good "money maker". This is for Amazon and Apple to keep people in their ecosystems of content, devices, purchases... And that's all!

  59. Consolidate IP catalogs, maintain robust IP development pipelines, and diversify revenue streams to extract maximum value from IP. Let’s use Disney as an example:

  60. It's because there's too many damn streaming services. I'm not going to pay for 10 streaming services. You know what that's called? Cable TV. That's all they've done, they've gone full circle.

  61. I could instinctively tell this was some corporate marketing shil piece, commissioned by some money grubbing executive, and after reading, it only confirmed my original inclination.

  62. Tarantino has said that this is an awful era for movies. When the movies get better the profits will return. Not that complicated.

  63. But I like the gender/ethnic adaptations of movies that are culturally appropriate. And I really like the bait & switch 3rd, 4th, and 5th sequels of well-known 'A' movies and series

  64. You don’t need to make a huge profit to be a good company. You can be a sustainable company that just provides a service to people on a consistent basis. But noooo. Then the investors can’t leech off of the business anymore. How tragic.

  65. Too many platforms, prices too high, and a tendency to cancel any good show midway through ? I am surprised they aren't all bankrupt already to be honest.

  66. What the streaming companies absolutely fail to understand is that the vast majority of their customer base have finite disposable income each month, we can only afford to subscribe to a small amount of streaming services. I subscribe to Netflix, Amazon Prime and Disney+ at a monthly cost of around £30. Am I meant to also subscribe to Paramount, Apple, Britbox, HBO. Hulu etc etc. Most people can't afford to subscribe to every service going. It especially annoys us when the content from services we do pay for disappears to go to a separate subscription service.

  67. I’ve long maintained the opinion that Netflix should have leveraged its earnings to buy shares of production companies. That was the only way they were going to be able to maintain the necessary growth and keep shows that people liked.

  68. So one of the richest class of people are complaining that we aren’t giving them enough yacht money? Just stop watching the shit. It’s all corporate propaganda anyways.

  69. A few months ago I was subscribed to Netflix, Amazon Prime, Disney Plus, Hulu, Paramount Plus, and HBO Max. Then I canceled everything but Amazon Prime.

  70. Streaming may not be the issue here. DC has done some awesome animation, but can’t figure out what to do with live action. I liked The Batman.

  71. The problem isn't with streaming itself. It's with companies making self-destructive decisions either looking for constant growth rather than content with stable profit margins. Or with trying to split off into another service that dilutes the value of existing platforms and asks customers to pay for yet another service to get access to things they already had before the split occurred.

  72. It's almost like cutting things into smaller and smaller fiefdoms in the name of greed is a bad thing!

  73. gee its almost like the reason netflix was original successful was because you could watch basically anything on there. who wouldve thought stripping it down and creating 20 different streaming platforms with the content fragmented and separated wouldnt be as effective.

  74. Maybe they should stop making dogshit shows and movies. Everything now is just remakes and pandering.

  75. Prime and TV+ will definitely be around for a while. They’re owned/produced by companies who have other revenue streams to fall back on. Netflix, while still the streamer to beat, has to make money and grow consistently in order to say in business long-term.

  76. I don't think streaming in itself is a black hole but if you're investing in production and making shows you're not going to have the same performance to a pure tech company and you're going to be bound by the same rules. This applies to a number of companies out there that use technology for advantage but aren't necessarily one at least financially.

  77. Geniuses! Who would've thought that trying to push the world back toward the cable TV packaging strategy wouldn't work? That people have less disposable income than they e ever had, so they'll only subscribe to whatever has the best value - and not Peacock, AMC+ (lol), D+, Hulu, Netflix, Paramount, HBO max, etcccccccccccc for $10-15 each?

  78. If streaming goes away, fine, but I’m not going back to cable 🤷🏻‍♂️ Just won’t be watching shows anymore if that’s what it turns into. Or if quality turns to shit or it’s nothing but trashy “reality” tv.

  79. I wish pop culture critics would stop writing pieces like "Ooooooh, look at the dumb streamers losing money! Aren't they dumb?!" and try instead to learn more about the business and economics of streaming. All you have to do is pick up the phone and talk to the people making these sorts of business decisions. There are fundamental forces driving the shifts in the industry and they aren't that hard to grasp.

  80. Huh, almost as if you lose all economy of scale when you’re determined to break everything up and go your own way.

  81. Without the pseudo monopoly most cable companies had, consumers finally have buying power in the space of tv shows/movies that they never had before. You don’t need to pay for force-fed packages and can pick your own options while also supplementing it with subscriptions from friends/family. Shit, I even have exes who i let use my netflix and she lets me still use her hbo max 🤷🏾‍♂️

  82. What I hate about subscription-based streaming is that it rewards quantity over quality. Netflix tends to make a lot of very popular garbage these days: Emily in Paris, Bridgerton, Red Notice, 6 Underground, Extraction, all the Adam Sandler stuff....

  83. Don't believe articles like this - they are written by journalists who think they are part of the zeitgeist when in reality they are just repeating management complaints that announce price rises.

  84. Honestly the only service that I think is worth keeping on monthly basis is Disney+ due to how cheap it is, how great the old catalog is, and the fact they always add new movies like 2 months after they come out in theaters. I'd normally spend $10+ to go watch a new Marvel movie when it came out, now I just wait and watch it on D+ for essentially the same price while I also watch new SW and Marvel series when they come out. Just about everything else isn't worth it until they have a solid back log of things for me to watch.

  85. D+ is only worth it if you're actually interested in Marvel or SW. The shows on HBO and Apple are leagues better. D+ would be the first one to drop for me

  86. Streaming...which is basically just television except that the amount of money they spend on shows/movies is way beyond what makes fiscal sense.

  87. Have you see how much revenue Netflix brings in each month? They have more money then you can imagine come in every single month. They can burn through shows and content and still have plenty leftover. What you think makes fiscal sense means jackshit.

  88. Considering Netflix had $ 5 billion net income last year, the amount they spend on their shows seems to make plenty of sense.

  89. Wether or not its profitable? Well, iirc Twitter is also a black hole when it comes to money, but they seem to be doing just fine.

  90. I feel most of this problem lies with directors and actors being way to over paid. No one in the world deserves multi million dollar salary for like 6 month of work. Some of these actors have more money then some countries...

  91. It’s because nowadays they’re so many films,series,biographies(everybody has a bio nowadays) I feel like the entertainment industry rn is saturated with too many things to watch

  92. TDLR: individual networks all making thier own streaming networks was not profitable, just like we all said it wouldn't be.

  93. So you’re saying that streaming is a bubble poised to pop due to the influx of mid-to-low tier services and the rising costs of securing content exclusive to your platform?

  94. Not necessarily. All a streaming service needs to do to be profitable is focus on quality over quantity (aka be HBO Max not Netflix), aim at critical ($$$) demographics—sorry old folks in middle America—mitigate mismanagement by picking people who don’t have egos, license third-party content wisely, give creative freedom to the creators (duh), not jerk around their subscribers with sudden and/or frequent price jumps, design an intuitive UI, release movies in theaters first before bringing them to the related service, offer hubs that group programs on the service according to content or owner (HBO Max does this and it’s great), and lastly don’t hit the panic button just because your growth has slowed down quarter over quarter—there are a million factors that play a part in determining subscriptions, so if the service has all the aforementioned bases covered, they should stand firm and keep doing what they’re doing. Besides, more subscribers doesn’t necessarily mean more money when you consider free trials and bundles that include the service.

  95. My failed start up self from 2012 is going to laugh when we just build an internet version of cable soon.

  96. I dunno... Maybe stop overpaying the same small pool of actors, writers, and directors and you'll find that there's quite literally a million other people out there trying to find a place in the film industry that would do the same work for a tenth of the price and be tickled. Fucking. Pink for the opportunity to get their project out there/the chance to work.

  97. I disagree with your comment because Chris Pratt is one of the reasons Jurassic Park made billions so I think him getting 30 mil is worth it. This is up for the higher ups to figure out, not the actors.

  98. I think the 2 largest problems in streaming are badly runs services and the generally overpriced nature of the TV and film business. It shouldn't cost over a 100 million dollars to make a 2 hour film. It's idiocy for anyone to think that sounds great. That model is a bad as pro sports. We have to stop paying performers millions of dollars or the industry will eventually implode from what is essentially, talent inflation. That goes triple for marketing.

  99. I see 3 to 4 players in the streaming space The only two I see 100% safe is disney but they will need to merge Hulu and espn+ into Disney+ and Amazon prime video

  100. I don't buy the reasons in the article given for shelving Batgirl. Big studios release total garbage all the time, so that's definitely not a deterrent.

  101. It’s possible that they realize where DC movies’ reputation is at right now, and then compared that to Batman movies specifically.

  102. We are in the final days/years of the golden age of streaming. It’s going to evolve for the worst. HBO situation will probably be seen as the turning point of the age. We are already past the golden age of EVERYTHING being on Netflix and mashing it up with Hulu to get all content.

  103. because every fucker with a production company or local tv station has a fucking pay for streaming service. who the fuck can afford 250 subs to shit like peacock and candian tv?

  104. For most movies, I agree. Say, any movie that costs more than 25 million. Series make sense for streaming. More hours of content for your investment (both for the producers and the consumer).

  105. Like it or not, streaming is not only the future, it is the fast approaching and inevitable future. Cable is almost dead, and piecemeal contracts make satellite iffy and expensive. Literally what choice will anybody have other than to stream? I'm for it, just saying the quiet part out loud.

  106. This title is being taken out of context. Streaming itself, as a distribution mechanism and business model, is not a financial loss. What is a loss is the way its being used as a repository for accessing wide ranges of content, including box office flops that incurred financial loss on the publishers. In other words, if you create a cheap piece of content and you don't make money from a hyped theatrical distribution then streaming is where these shows are placed longer term.

  107. When I was younger I used to pirate everything, Now in my late 20s and can afford to buy shit but at the rate streaming is going I’m going to cancel everything and pay for a vpn instead, Yo ho ya scallywags

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