Streaming services prioritize profitability to satisfy Wall Street demand.
Entertainment industry faces challenges with content visibility and award recognition.
Streaming platforms focus on marketing and content diversity to reduce subscriber churn rates.
Deep dives
Shift towards On-Demand Viewing
Viewers are gravitating towards on-demand content, with live TV reserved mainly for specific genres like sports and news. The pandemic hastened this trend as media companies focused on streaming services over traditional linear TV, shifting towards more content and subscribers rewarded Wall Street. Companies like Fox are prioritizing bundle offerings to maintain value.
Challenges in Content Consumption and Fragmentation
Fragmentation in the entertainment industry leads to challenges in garnering viewership for content nominated for awards due to the vast array of available shows and movies. Television shows like 'Ted Lasso' and 'The Marvelous Mrs. Maisel' struggle to garner significant viewership despite critical acclaim, adding to the industry's content creation dilemma.
Marketing Strategies and Churn Rates in Streaming Services
Streaming services are exploring marketing strategies to retain subscribers, considering tactics like offering discounted multi-month plans to reduce churn rates. The focus on content quality and varied offerings aims to attract and retain subscribers effectively, as competition increases in the streaming market. Services like Netflix maintain low churn rates by prioritizing content diversity and engagement.
Content Production and Revenue
Netflix's significant content investment and production have been pivotal in its success, along with low churn rates. Competing streaming services are exploring different strategies such as Apple's focus on exclusive titles and brand image. The industry is witnessing diverse revenue models with a balance between content investment and profitability becoming crucial for sustained growth and competitiveness.
Impact of the Pandemic on Streaming Wars
The pandemic has reshaped the streaming industry, with a focus on attracting and retaining subscribers. Companies like Netflix experienced a surge in sign-ups during the pandemic, leading to strategic content decisions. Theatrical markets faced disruption, prompting shifts in release strategies for different types of movies. Smaller, character-driven adult dramas are increasingly leaning towards direct streaming releases, while big-budget films like superhero movies continue to release in theaters.
Consolidation and the Return of Bundling
As streaming services multiply, consolidation and rebundling may become prevalent. The trend towards aggregating various niche services may lead to a scenario resembling cable TV bundles. The convenience and cost-effectiveness of bundled offerings could attract consumers seeking a one-stop entertainment solution. Platforms like Amazon and Roku are positioning themselves as aggregators, potentially shaping the future of content distribution.
It’s time to check back in on the state of the streaming wars, with two binge-worthy conversations. First, Recode’s Peter Kafka talks to analyst Michael Nathanson about Big Media’s new problem: TV ratings are plummeting because all the good stuff is streaming — but now Wall Street doesn’t just want streaming, it wants *profitable* streaming.
Then, we travel into the time stream to talk about the past, present and future of the streaming wars with Dawn Chmielewski, co-author of Binge Times: Inside Hollywood’s Furious Billion-Dollar Battle to Take Down Netflix, and Julia Alexander of Parrot Analytics. We discuss the legacy of Seeso, why the real audience of CNN+ may be the people in front of the camera, and when and if we’re getting the bundle back.
Featuring: Michael Nathanson, Senior Research Analyst at MoffetNathanson
Dawn Chmielewski (@DawnC331), U.S. Entertainment Business Correspondent at Reuters
Julia Alexander (@loudmouthjulia) Senior Strategy Analyst at Parrot Analytics
Host: Peter Kafka (@pkafka), Senior Editor at Recode
More to explore: Subscribe for free to Recode Media, Peter Kafka, one of the media industry's most acclaimed reporters, talks to business titans, journalists, comedians, and more to get their take on today's media landscape.
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