- High-profile series and feature film cancellations are signals of a reorientation of the content model by premium streamers.
- Common-denominator programming is being prioritized to secure eyeballs on ads over more risky but expensively produced drama.
- Post-pandemic, the streaming model hasn’t delivered the same returns as the old model of release windows and rights sales.
Streaming has hit an economic reality check and with it the rules of engagement are changing.
Rather than attracting a base of paid subscribers, the next phase in streaming is about reaching a wider audience to secure eyeballs for ads — and that means more mass-market risk-averse programming and far less experimental and niche content. Is the golden age of streaming over?
Paris Marx, writing at Business Insider, thinks so.
“After promising to upend the entrenched players, streaming services are starting to feel a lot like cable: surfing through tens or hundreds of channels only to declare, ‘There’s nothing on!’” says the tech writer and host of the Tech Won’t Save Us podcast.
Alex Cranz at The Verge thinks so too. “For the last half-decade, we’ve enjoyed a golden age in entertainment. But over the last few months, we’ve seen a reorientation of how these services do business, and it’s clear that this glut of content we’ve enjoyed, for the mere cost of a monthly subscription, is about to end. Some of us are going to keenly feel the pain of that more than others.”
The trajectory goes something like this. Shows like The Wire, Breaking Bad, Man Men and The Sopranos were the apex of the Golden Age of TV drama, which media archaeologists chart between 1999 to 2010.
Enter House of Cards in 2013, which showed that Netflix could play major league broadcasters and Hollywood at their own game. Followed by Orange Is The New Black. And Sense8. And GLOW. And Squid Game.
“Netflix made an explicit choice to invest in content from women, queer people, people of color, and non-Americans, bucking the homogeneity of creators elsewhere in the industry,” says Marx.
Other streamers piled in and everyone upped their game. “It was a blast,” says Kranz. “It was another golden age. Netflix started pouring money into Hollywood in an effort to build a cache of big hits so it could compete with the likes of Disney…. they were also willing to experiment in a way that was uncommon before the streaming wars.”
Now it’s all gone sour. Netflix has canceled queer shows like Warrior Nun, HBO has benched Westworld after four seasons alongside the Joss Whedon-directed The Nevers. There won’t be a second season of Minx, on HBO Max at least, and the HBO parent made the most high-profile axing of $100 million blockbuster Batgirl despite it being finished. The cost to market it proved too high for Warner Bros. Discovery, which is prioritizing cost cutting to save its $40 billion+ mega-merger.
It’s the economics stupid. Streamers have realized that no matter how many millions they pour into originals they are still leaking subscribers. Competition and the effects of recession are squeezing both the total pot and the share of viewing for each service.
The pandemic may have seen huge audiences flock to streaming platforms but the same existential market force brought home to studios quite how important the windowing release strategy was to long-term revenue.
“There’s been a general acknowledgement that the streaming model simply isn’t delivering the same returns as the old model, in which a film or television show had many opportunities for additional rights sales and releases,” says Marx.
Another reason could be, as Krantz points out that, the price of keeping shows in perpetuity on a streaming service — which meant continuing to pay royalties — was no longer stacking up.
Next year, the Writers Guild of America, the Directors Guild of America, and the Screen Actors Guild will all negotiate new contracts with the Alliance of Motion Picture and Television Producers, and streaming residuals are going to be a major point of discussion, as Variety’s Cynthia Littleton reports.
READ MORE: The End of Ownership: Why the Battle Over Paying TV Creatives Is Only Getting Crazier (Variety)
As studios pulled licensed properties such as The Big Bang Theory and The Office back from Netflix to fill out their own streaming services, Netflix has sought to fill the gap itself, funding shows like reality cooking show Iron Chef and dating shows like Love Is Blind.
According to documents shared with Business Insider earlier this year by talent agencies, Netflix is on the lookout for “big, broad stories that can be told on a budget,” Marx notes.
“Sure, the streamer is still pouring billions of dollars into content, but it’s not overwhelmingly targeted at expensive, groundbreaking ideas like in the past,” he says.
The launch of advertising-supported services have only doubled down on this content strategy. Instead of investing in the highest quality, streamers have refocused on quantity to ensure there’s always something new in the library.
“As a result, streamers are retreating from any sort of creative risk in favor of humdrum, lowest-common-denominator shows. And now the ‘disrupted’ film and TV industry is starting to look the same as what it was trying to disrupt.”
As it stands today, viewers won’t be complaining. If anything, there is too much great quality binge-worthy content to digest from features like Glass Onion on Netflix, also home to 1899 and Wednesday, and hip-smart HBO series like Succession and White Lotus or more seasons of House of the Dragon to look forward to (LOTR: The Rings of Power, not so much).
The worry will be in six months to a year from now when these will be the exception, not the rule.
Big content spends, tapping emerging markets, and automated versioning: these are just a few of the strategies OTT companies are turning to in the fight for dominance in the global marketplace. Stay on top of the business trends and learn about the challenges streamers face with these hand-curated articles from the NAB Amplify archives:
- “RRR:” Changing the Game for the Global Marketplace
- “1899:” Making a Mystery in Multiple Languages
- “Squid Game” and Calculating the “Value” of Global Content
- Global SVOD Market to Hit $171 Billion in Five Years
- Think Globally: SVOD Success Means More Content, Foreign Content and Automated Versioning