The future of streaming seems to be at a crossroads. While user growth is slowing down and the industry is experiencing consolidation, there is a newfound hope for profitability. In a recent interview conducted by The New York Times, industry giants such as Netflix’s co-CEO Ted Sarandos, Amazon’s Prime Video head Mike Hopkins, and IAC chairman Barry Diller shared their perspectives on what lies ahead.
One of the key themes that emerged from these discussions is the shift towards profitability rather than growth-at-all-costs. To achieve this, streaming services have been gradually increasing their prices and introducing more affordable subscription tiers that include advertisements. In fact, some executives believe that raising prices for ad-free subscriptions will encourage more customers to opt for ad-supported subscriptions instead.
The rise of ad-supported streaming could also impact the type of content being produced. Advertisers typically target a mass audience, which could result in a shift towards more mainstream and crowd-pleasing movies and shows. However, executives maintain that they are not abandoning their pursuit of groundbreaking and critically acclaimed content. Netflix’s Sarandos emphasized that they can produce prestige TV at scale while still catering to a wider audience.
Amazon’s Hopkins echoed this sentiment, stating that while tried and true formats perform well for Prime Video, they also need to take big creative swings that leave viewers in awe. The goal is to create content that sparks conversations and compels people to recommend it to others.
Beyond content, industry executives predict other changes in the streaming landscape. There will likely be increased investment in live sports, as it remains a popular and engaging form of entertainment. Additionally, there may be more bundling of services or even the shutdown or merger of existing platforms. The general consensus among these executives is that a streaming service needs to have at least 200 million subscribers to be considered “big enough to compete.”
While some of these changes may be welcomed by viewers, there is a growing concern that the streaming experience may not be significantly different from the traditional cable TV ecosystem. While on-demand viewing is an improvement, compensation for writers, actors, and other talent may suffer. However, with different players at the helm, there may be opportunities for innovation and improvement.
In conclusion, the streaming industry is undergoing a transformation towards profitability. This shift is characterized by rising prices, the introduction of ad-supported subscriptions, and a potential change in the type of content being produced. While some aspects of streaming may resemble the traditional TV model, there is still hope for exciting and groundbreaking content. As the industry evolves, it will be interesting to see how streaming services strike a balance between profitability and delivering compelling entertainment experiences.
