2024 – the year of streaming consolidation?

In 2023, streaming services not named Netflix lost a collective $5 billion, according to a recent report by the Financial Times. And this is causing many streamers to put at the top of their New Year’s Resolutions: “reevaluate our strategy for 2024.”

Background: Major studios mimicked Netflix's business model of spending billions of dollars in content to attract millions of subscribers worldwide. They entered the streaming industry with low prices to gain market share, and Wall Street applauded companies that saw strong subscriber growth.

But things have changed. These days, there’s more of an emphasis on profitability > growth – something that favors Netflix, which reported a net income of $1.68 billion in Q3 – and it’s causing other streamers to focus more on being cash-flow positive.

• In 2022, prices for the 10 largest streamers increased an average of 10%. Last year through October, prices had increased another 10% on average.

This focus on profitability has tradeoffs, however. One being a higher cancellation rate. ~25% of US subscribers to major streaming services have canceled at least three of them over the past two years, per recent data reported by the WSJ. Two years ago, that number stood at 15%.

One interesting thing: Data shows people are increasingly round-robining streaming services, canceling a subscription and then picking it back up at a later date. One in four people who cancel a premium streaming service typically resubscribe within four months, and one in three do so within seven months, per the WSJ.

👀 Looking ahead… Analysts predict 2024 will be the year of streaming consolidation, as some services – like Paramount – look to combine forces or bow out of the streaming wars altogether.