“The streaming wars are dead. Long live streaming”. That’s a section title from a CNN article this month called “The streaming wars are over”.
While that seems somewhat counterintuitive, CNBC’s analysis describes the situation in a lengthier article title, even though it is back from May: “The first act of the streaming wars saga is over — Netflix’s fall from grace has ushered in the pivotal second act”.
And what is in the second act of The Great Streaming Wars (which may now be The Regular Streaming Battle)? Well, as The Wall Street Journal explains, companies can’t just chase after subscribers. And so if they can’t just keep encouraging people to sign up, how else are these services going to get money?
Well, let’s take a look at what’s happening in the world of streaming today.
Netflix Patches the Bleeding
Netflix has long been the king of streaming. But after losing subscribers for the first time in a decade in the first quarter of 2022, Netflix predicted it would lose 2 million subscribers in Q2, much worse than the 200,000 it lost in Q1.
However, Netflix surprised even themselves by losing just under 1 million between May and June. That’s still the biggest drop in the company’s history, but that’s much better than what they had braced themselves (and Wall Street) for.
Still, Netflix has got to do more to prevent the company from fully losing its throne. While Netflix still has the advantage in the number of unique subscribers, Disney has surpassed Netflix in number of subscriptions. (One person can be counted multiple times in Disney’s numbers depending on how many of Disney’s streaming services they have.)
One of the things Netflix is doing to spur growth again is to launch an ad-supported tier by early next year. That alone is not going to be a cure-all, but perhaps it may not be a huge boost to the service’s numbers. That’s because when it launches, Netflix-with-ads won’t have all of the shows and movies that’s available on Netflix-without-ads.
One of Netflix’s CEOs said “the vast majority of what people watch on Netflix” will be included, but there will likely be shows and movies that are limited to the ad-free options. Netflix is in negotiations with companies like Sony and Warner Bros. to have their produced content on the ad-supported plan.
All that content may be added later once agreements are signed, but when the new plan launches, some stuff will be restricted. So anime fans who were hoping ad-supported Netflix would better fit their pocketbooks will need to wait to see what’s on the service. I’m sure it will be a valid option for most, but l could see some of their exclusive licensed anime have legal issues preventing it from being immediately available on the ad tier, like the Sailor Moon Eternal movies.
Disney+ + Ads…or More Money
The Walt Disney Company’s streaming service, Disney+, debuted back in 2019 at the rate of $6.99 a month. And even before launch, they spurred sign-ups with a deal that made the effective cost of $4.99 a month for three years (paid upfront). The low price was clearly a challenge to Netflix, the industry leader.
Since then, the service has expanded globally and has added more of its back catalog and new productions to its service. That includes anime, the first slate of which was announced back in October 2021. It was earlier that year in March Disney+ raised their price for the first time to $7.99.
Now, though, Disney fans and fans of its anime series like Summer Time Rendering may need to reevaluate the service as of this December. Starting then, Disney+ is now going to have an ad-supported option instead of being strictly ad-free. But for those who were hoping that means getting Disney+ cheaper than it is currently, well, prepare for disappointment. The current $7.99 plan will remain at $7.99, but it will add ads. To stick with the current ad-free plan means paying $10.99 a month, a $3 increase.
Hulu, which is also owned by Disney, features quite a few anime series that are available on other platforms, like My Hero Academia, Naruto, and Sailor Moon. That too will be getting a price hike of $1 for the ad-supported plan or $2 for the ad-free plan.
Disney is trying to push people toward bundling with its other services. Subscribers to the Disney+ bundle, which has Disney’s other streaming services Hulu (with ads) and ESPN+, will either pay $1 more than the current rate to get Disney+ without ads or save $1 per month than now by watching ads. For $19.99 a month, Disney+ and Hulu will be ad-free in the bundle. But for viewers who just want those two and not ESPN+, Disney+ and Hulu will be bundled together with ads for $9.99 a month. There are also other options.
Disney has not expected Disney+ to turn a profit until 2024, but current operating costs are higher than what analysts had expected even though the service added subscribers. Disney has now lowered its prediction for their 2024 subscriber numbers but still believes Disney+ will make money by then.
This is quite a jump. Even moreso since the $7.99 plan no longer has a discounted annual option at $79.99, which made it cost about $6.67 a month. I know I will be reconsidering, as so much of Disney+’s content plays on TV and/or I own a copy. Yes, it has some highly-acclaimed exclusives, but so does Netflix, and I don’t subscribe to that service. I might stick with it for another year on the annual plan since the current $79.99 package will convert to the Disney+ Premium no-ads version. But I’m definitely not paying $109.99 next year. That’s too much, even if Disney is planning on pushing further into Japanese content.
HBO Max and Discovery+ Are Discovering Merger Pains
AT&T spun off its WarnerMedia division to sell to Discovery, home of networks like The Discovery Channel and HGTV. The plan was to eventually merge the two companies’ streaming services, HBO Max and Discovery+, into one after initially offering a bundle option.
But “eventually” is turning out to be sooner than what most people had predicted. Warner Bros. Discovery now aims to integrate the two platforms into one in summer 2023.
The company is looking to cut costs immediately, as it is currently valued at less than what Discovery paid for WarnerMedia from AT&T (about $33 million vs $43 million) and lowered its forecast after a disappointing quarter. Among those moves are canceling big-budget film Batgirl (which was already in post-production) as well as Scoob 2: Holiday Haunt (which was “95% finished” according to the co-writer) for tax purposes.
Layoffs are also incoming, and The Wrap reported as much as 70% of HBO Max staff will be getting the axe as the company aims for more reality-based (unscripted) content.
But Warner Bros. Discovery’s CEO insists HBO Max’s Originals line will continue.
Still, to throw away projects featuring some of their biggest properties and not even sticking them on HBO Max (or whatever its named successor is) is upsetting to the staff and to fans who were looking forward to those titles. And if nearly-done, albeit big-budget productions can be canned, who knows what else will be on the chopping block.
I like HBO Max, but I have 0 interest in the Discovery+ lineup. I’m on a promotional rate now for HBO Max, but I doubt I’ll stick with it at $14.99 a month — let alone whatever they charge for the integrated version, as I’m sure it will be more. And especially not if they are going to be canning a lot of projects to pay for the merger.