The promise has changed.
The promise was “you will have everything in the same place and you can see it whenever you want”. Disney+ announced in its quarterly report, before Wall Street and Hollywood, that it will reduce the content produced on its streaming platforms (Disney+ and Hulu or Star+) and also the catalog. The decision is part of a strategic restructuring and responds, in the words of Bob Iger, CEO of Disney “to the maturation process” of the platforms. For what is this? What are the consequences?
In the first instance, the growth of the platforms is no longer what they expected. The pandemic gave hope that it would have a higher rate, but with the return to the “new normal” consumption decisions have also changed. Users have a different distribution of expenses due to the economic recession, on the one hand; on the other, there are the entertainment options that are no longer limited to what can be seen “from home”. Added to this is the wide offer and a question that is still on the table, how many streaming services will there be?
The foregoing has caused not only growth in streaming services to be less rapid, but also loss of users, as has been the case with Netflix. The reasons go from cost to content, going through new adjustments to services such as the fact that it will no longer be possible to enter with the same account from two IP’s (in Spain, it cost him a million subscribers). Fewer subscribers mean less income, and less income means adjustments on all fronts: operation, maintenance, and content production.
A couple of differentiators of streaming services are in their catalog and their premieres. The first was taken for granted (having “everything Disney”) and it has been a topic to be sought by Netflix precisely because it does not have (or had, depending on how you want to see it) classics like “Friends” or properties that result in a universe that it can develop and exploit (as it happens with Harry Potter, Star Wars, Marvel and others) and that it is now just building with properties like Bridgerton, The Gray Man, Stranger Things. However, although the catalog gives quantity and a “universe of possibilities” it is not the star content or the attractive content at the moment, but it is content that costs.
In the end, the catalog in digital services does not work so differently from how it happened with physical stores (Blockbuster or Videocentro): having more titles takes up space, requires maintenance. When a title was new, there were more copies; a few months later they were reduced. If the title was not rented, it was removed from the catalog. It’s the same in streaming services. There are titles that are not seen or are hardly seen and then the platforms will have to decide one of three options or perhaps a combination of them: 1) leave the title out permanently, 2) bring the title back when appropriate because it has turned interesting for a date or another premiere, 3) license it to another service. Of the latter, the question remains, if it is not seen on Disney, will it be seen on another service?
Now for the premieres. The premiere is the magnet for users to subscribe. It is the novelty, what is on the agenda, what is fashionable. Most streaming services have opted to have a couple of flashy titles a month, maybe a couple more. Movies have the characteristic of impacting “once” in the sense that, for example, “Peter Pan and Wendy”, to mention a recent release, will be striking the week it arrives and a few more. How much more? It is a topic on which there is still not enough information. Streaming services aren’t sharing this, but it’s probably a box office-like phenomenon. That is to say, the first weekend sets the tone for the impact, the second gives an account of how much the views have been reduced and from there the decline continues. If a title is more in conversation, it will last longer “on the billboard”.
The series have the advantage that by making up several episodes, one can be released a week as all services do except Netflix (which has done so on some occasions such as “Stranger Things” or the Luis Miguel series). Doing so has the advantage that the product “performs” more, you can keep more time on the agenda or conversation and, once the viewer is “stung”, they will not leave the platform while the project lasts. Before that happens or before the end of the month, another series is released that avoids, for example, unsubscribing; he is held captive.
The Disney+ action seeks, on the one hand, to reduce its operating costs and, on the other, to focus on quality rather than quantity. How many premieres does it take? Do you really see all the premieres? Is it worth investing in producing so much new? Netflix still seems immune to such questions, but the password sharing issue is another actionable measure and it will inevitably have to take a stand. HBO Max, Prime Video, Apple TV and others will have to act. The moment of the diet has arrived.