The streaming wars are entering a new phase
Image: Advanced Television
Later today, Netflix will send out the last of its iconic red envelopes, as the streaming giant’s DVD-by-mail service officially comes to an end after 25 years.
- Netflix says its mail service, which was once the USPS’ fifth-largest customer, is shutting down due to a continually shrinking market for DVDs compared to streaming services.
The move comes as major streaming platforms are rolling out a series of changes aimed at growing, retaining, and monetizing their subscriber bases so they can finally turn a profit (or in Netflix’s case, increase its profits):
- Every major streaming service has hiked its prices over the past year, with the average ad-free subscription cost increasing by 25%.
- Apple TV+ is now the final major streaming platform without an ad-supported tier, after Amazon Prime Video last week said it’s incorporating ads into its base plan next year.
- Netflix implemented a crackdown on password-sharing in late May, then reported a near-record 5.9 million new signups the following month. Disney is planning to follow suit, and will prevent US accounts from sharing passwords starting in 2024.
Streaming platforms are also increasingly turning to live sports. This year, major streamers will spend over $6 billion on the rights to exclusively broadcast major sporting events, which are far and away the most popular category in US television. That figure is up from ~$1.5 billion spent by streaming services on sports rights last year.
📺 On the consumer side: An estimated 84% of all US households are subscribed to at least one video streaming service, with the average American spending $48/month across four different platforms, per Deloitte’s 2023 Digital Media Trends survey.
But Deloitte also found many US consumers are experiencing subscription fatigue. Half of all Americans say they currently “pay too much” for streaming services, and one-third are planning to reduce their number of subscriptions in the near future.
📊 Flash poll: Out of all the streaming services to which you’re subscribed (if you have multiple), which are you least likely to cancel?
See a 360° view of what media pundits are saying →
Sprinkles in favor of the current streaming industry
- Some commentators argue that America’s current streaming landscape is inarguably better than cable TV models of the past, which lacked content on-demand or the option to skip commercials.
- Others contend that streaming services are better positioned for the future than cable TV companies of the past, and can avoid the same fate by integrating more services like ad-supported pricing tiers.
- “Shift to Streaming: Broadcast, cable TV viewing falls below 50%” –Texarkana Gazette Editorial Board
- “How streaming can avoid the same fate as cable TV” –Bill Carter, CNN Business
- “Disney’s CEO can help the world by buying up streaming companies” –Megan McArdle, WaPo
Sprinkles against the current streaming industry
- Some commentators argue that the golden era of streaming is now firmly a thing of the past, and that consumers probably won’t like the current industry trend towards squeezing every dollar out of subscribers.
- Others contend that the streaming industry’s ongoing fight over live sports rights has resulted in a highly-fractured environment where it’s nigh impossible to easily watch all the big games.
- “Streaming Is Sadder Now” –Shira Ovide, NY Times
- “There are no perfect options to watch live sports” –Colin C. Rhodes, Times West Virginian
- “Streaming Video Will Soon Look Like the Bad Old Days of TV” –Matthew Ball, former Amazon Studios exec
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