We are currently in a transitional phase in the streaming world: user growth is slowing down, and major platforms are seeking consolidation. However, the long-awaited profitability finally seems within reach, especially for companies like Netflix.
In this context, The New York Times has taken the opportunity to interview prominent industry leaders, such as Netflix’s co-CEO Ted Sarandos; Amazon’s Prime Video director, Mike Hopkins; and IAC’s chairman, Barry Diller, to understand their perspectives on the future.
There is a general consensus on key issues: more ads, higher prices, and fewer major changes in prestige television. All these adjustments are aimed at achieving profitability rather than growth at all costs. The initial prices of many streaming services seemed unsustainably low, and as it turns out, they were. Prices have gradually increased, and platforms have introduced more affordable subscription tiers for those willing to watch ads.
Some executives told The Times that they will continue to raise prices on ad-free tiers to push more customers towards ad-supported subscriptions.
The growth of ad-supported streaming could also influence the types of content produced, as advertisers typically aim to reach a broad audience. This is reminiscent of the golden age of ad-supported TV networks, with their endless shows about doctors and cops, in contrast to HBO’s more ambitious subscription-based fare.
This shift is already happening in streaming, though executives insist they are not abandoning the hope of finding the next “Sopranos” or “House of Cards.” Sarandos, who previously claimed he wanted Netflix to “become HBO before HBO could become us,” said Netflix can “do prestige TV at scale,” but added, “We don’t just do prestige TV.”
Similarly, Hopkins noted that at Prime Video, “procedural formats and other tried-and-true formats work well for us, but we also need big hits that make customers say, ‘Wow, I can’t believe that happened!’ and tell their friends about it.”
Other predictions include increased investment in live sports (“the simplest and most interesting,” according to John Malone, a board member of Warner Bros. Discovery), more bundling, and the potential closure or merger of some existing services. There was apparent consensus among executives that streamers need at least 200 million subscribers to be “big enough to compete,” as expressed by former Disney CEO Bob Chapek.
Some of these changes would be welcome, but they reinforce the feeling that streaming, at least as envisioned by the current industry leaders, will not be so different from the old cable TV ecosystem. Some things will be better (on-demand viewing), others worse (compensation for writers, actors, and other talents), and there may be different players at the top. But in many ways, it will feel like the same old TV.
By: Nestor Castillo, ForAllTechNews Director