Streaming services are in crisis, they are at war, and they are desperate. Yes, the business model is the trend, yes it is the future, but yes, it has not found the balance that Disney, Netflix, Warner Bros. Discovery and others expected. You are with the signs that denote that they are in crisis and that the war continues to see who gets more users, who finds balance sooner and who prevails.
Selling content to other platforms
Although it has not yet been officially announced at the beginning of February, it was striking that at the beginning of February Robert Iger, CEO of Disney, declared that he “explores the sale of some films and series to his rivals.” Yes, a few years ago the strategy was just the opposite: remove all Disney content from any platform or not renew any licensing it had. Wow, your Netflix productions like “Daredevil” or “Jeassica Jones” are no longer on that platform and now they live with the rest of Marvel’s content on Disney+. The possibility indicates that Disney sees in it an opportunity to monetize its content in ways other than its own platform. The impact that this could have on subscriptions is surely part of what they analyze. It is certain that there are users who are faithful to it and who would not leave the service because a title is now on Prime, for example, but will it happen to everyone? If it happens, it will be necessary to see if this applies to all the titles or to which and what are the conditions that probably consider 1) a limited time of exhibition of those contents, 2) an additional cost.
Decrease in the cost of membership
Contrary to the trend, Netflix has announced just a couple of days ago that it will reduce the cost of membership in more than 30 countries in Asia, Europe, Latin America, Africa and the Middle East. The measure is due to the existential crisis and seeks that users do not cut their membership as part of the reduction of expenses. The reduction is not minor, in some countries it will be half the price with which they started in 2023. It is a risky strategy in terms of collection, but it makes sense if one considers that it is better to have the user than not to have it and that It is certain that as the economic situation improves, so will the cost. On the other hand, there is no risk that you will cancel and then not return or decide to move to another platform. No other streaming service has yet announced a similar move. Now, the cut will undoubtedly impact what is already one of the topics that is most analyzed, the production of original content.
Reduction and cancellation of new content
One of the main differentiators of streaming services is original content, both in terms of titles and quantity. Netflix has always been the one with the most new titles week by week, but, even if attention has been paid, at least the first weeks of 2023 the profile of the titles has been better, more so compared to what it had at the end of 2022. Other services release less new each week, they even do it a couple of times a month or they use as a strategy for series not to release the entire season, but a chapter or a couple each week, which makes the viewer captivated At least for the duration of the series. It wouldn’t be long for Netflix to even change its release model to something in between, giving them more life and taking a bit of pressure off for new ones.
The big question is, how much new content should you have? This would determine the balance between income and what is earmarked for new productions, which seems to be one of the great intrigues. In recent months HBO Max and Netflix, above all, have been surprised by the announcement of cancellations. In HBO Max the most radical was the case of “Batgirl”, a film already filmed and in post-production that will not see the light yet and when it cost 90 million dollars. Netflix, for its part, announced the cancellation of series such as “Warrior Nun”, “Inside Jon”, “Uncoupled”, among many others. Some of them seemed to have been successful, but clearly not enough to warrant a new season. And that is the question, the business model, although it was known that it would not be profitable until years later, is proving to be progressing at a slower pace than expected and presenting more challenges than planned, including the recession caused by the pandemic. Meanwhile, the crisis is over.