Streaming has been the darling of Hollywood for several years, also counting on the support of Wall Street, where it was expected that it would end up producing millionaire benefits. However, stock market experts are increasingly clear that betting so heavily on this was not a good decision and they are clear that the time has come to move on to a much more complicated stage.
“not a good deal“
In The Hollywood Reporter they have collected the conclusions of different Wall Street analysts, highlighting the resounding conclusion of a team of moffettnathanson:”Instead of being the new bread, investors and executives have accepted that streaming is not a good business, at least compared to what came before.“.
From that firm they are clear that the life of streaming can be compared to the division by acts of a film. In the first, the rise of Netflix caught everyone on the wrong foot and ended with that company “on course for world domination and with the established order struggling to muster an answer too late“.
The second act focused on companies betting big on streaming in an attempt to imitate Netflix“but even though subscribers poured in, the benefits remained elusive“. And they conclude that we are now about to enter the third, with the whole world having to face multi-million dollar debts and that “once-great companies will have to face the reality that they can no longer afford to burn money looking for benefits that do not exist“.
The conclusion is clear, it is time to rationalize the commitment to streaming and Reif Ehrlich of Bank of America notes that “streaming operators will take a more balanced approach, focused on driving profitable growth“. The problem is how to achieve it, since that will force a consolidation phase that can leave several financial corpses along the way.
And it is that in addition to not giving benefits, streaming has caused other sources of income such as cable television to suffer significantly. From Deloitte they are clear that what does not compensate for what has been achieved in return:
Streaming has also disrupted profitability. Gone are the revenues of the cable TV era, which once approached those of the global energy sector; by some estimates, streaming generates a sixth of the household income than pay TV.
One of the lights at the end of the road that you see in Deloitte It is the commitment to include advertising in streaming services, but they point out that it is still too green, because “advertising success requires more data and better ad technology to put the right ads in front of the right eyes“.
a new phase
The last nail in the coffin puts it Benjamin Swinburneanalyst of Morgan Stanleywho concludes that the growth rate of streaming has slowed and that “According to our estimates, streaming platforms (excluding Netflix) will lose more than $10 billion in operating revenue in 22 years.” -let’s remember that Disney+ recently announced losses worth 1,470 million dollars in a single quarter-. it’s unsustainablefurther concluding the following:
The sector is clearly entering a new phase which, in our opinion, will be characterized by 1) the rationalization of costs, 2) the consolidation (of services and/or companies) and 3) the total exit of this business
Come on, the platforms are going to have to spend less, there is going to be no choice but to proceed with mergers or for a platform to be bought by another company or that it is directly going to be necessary to shut down and assume losses. Black future for streaming.
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