The news that Disney + plans to raise its rates on the occasion of the launch of one with advertising has spread like wildfire today. This new rate will be cheaper than the normal one, yes, but at the cost of the version without ads raising its price by almost 40% for US subscribers. It’s the first major wake-up call heralds that the golden age of streaming is doomed.
The end of the idyllic future
As soon as we think about it, streaming it was sold to us as that future with so many advantages that it was impossible to say no. Endless catalogues, contained prices and the possibility of seeing what we want at any time and without having to put up with that annoying advertising that on television sometimes seemed to last longer than what we were really seeing. Here for now they promise that it will be very little, but you start there and then you add more and more.
With certain nuances – there are still many movies and series that have never been available on any platform – that has been the case for several years. First it was Netflix that planted the seeds, made it grow, and then everyone wanted to have their own platform. The problem is that perhaps they never took into account that Netflix has been feeding on an increasingly monstrous debt for years., a problem that we will see when it ends up exploding. For now, they have been making cuts for some time and are much more vigilant about what they spend.
The point is that streaming is not profitable today. At Disney they announced yesterday that between Disney +, Hulu and ESPN + they had accumulated losses worth 1,100 million dollars, a news that may have gone somewhat unnoticed given the fact that it has finally managed to surpass Netflix as the company with the most subscribers. A true statement but with several buts (he has done it with several platforms and it is most likely that there are several that actually belong to the same person).
The program is enlarged if we take a look at its main competitors. For example, Paramount+ expects to lose $1.8 billion this year, while peacock 467 million were left in the second quarter of 2022. In the case of HBO Max, the losses amounted to 518 million dollars in its commitment to streaming also during the second quarter of last year.
In the case of Amazon it is much more difficult to determine how much it may have lost specifically with Prime Video, but it is known that in the second quarter of the year it added losses amounting to 2,000 million dollars. It will be rare that an important part does not come from streaming, because in 2021 it invested 13,000 million in it and nothing indicates that it has gone less this year, because let’s not forget the crazy cost of ‘The Lord of the Rings: The Rings of Power’ .
It’s time to focus on being profitable
What we are left with is a future in which each platform will do everything in its power to be profitable.. After all, they are not investing so much in streaming to lose millions of dollars. For example, Disney has confirmed that it hopes to start giving money in 2024. I’m sure that this strong increase in prices helps that, it is a matter of time before it is applied in other countries.
Let’s not forget either that Amazon also recently announced a price increase in Spain close to 40%, while Netflix did the same a few months ago, also revealing that it was going to start applying a heavy hand to pursue the bargain of shared accounts. And let’s not forget that you also have a plan with ads, good excuse to raise prices again and that this rate has the cost of the cheapest at present.
In addition, it is not convenient to ignore strange cases such as the fact that HBO Max is eliminating both its own movies and series from its catalog, and that everything indicates that this policy has only just begun. Will the same happen with other platforms? It wouldn’t be weird anymore.
There are also several announcements that make it clear that the platforms are going to have to start spending less happily and be more attentive to the profitability of their content. There are already too many signs that point to the fact that the world of streaming is going to get worse and on top of that it is going to be much more expensive.
That leads us to a scenario in which it will also be impossible for all platforms to survive and that the Qibi fiasco ends up being an anecdote compared to what is to come. There just isn’t that much of a market and if you start squeezing the goose that lays the golden eggs, there will come a time when he no longer gives more of himself.