They are just now realizing the its extreamly difficult to actually make a profit with a streaming service. Most major ones like hbo max and disney+ lose billions a year. Netflix and hulu are the only ones that have been able to squeeze out a tiny profit.
The problem isn’t so much that it is hard to be profitable. It is that the Movie industry will just keep raising prices of the content until they are barely scraping by. Since there is 9 major streaming services they are effectively a commodity bidding over the media content. So the free market has squeezed the profit out of it.
Of course the streaming services then turn around and try to restore a profit margin by raising the prices. Now the consumers are facing raised prices for a small slice of available media and realizing that this is both expensive and inconvenient.
Even if the consumers keep using the streaming services at a higher price the media companies will notice that they are making a profit again and jack the prices further. The streaming services are basically helpless middlemen.
This is of course why just about ever streaming service is starting to produce first-party content. This is where the money is as they are in control of the price and don’t have to outbid other streaming services.
Do we have concrete evidence that this is true? I find it highly unlikely Disney+ was hemorrhaging money considering all the parents that are indefinitely subbed to D+ for the Disney catalogue.
Unless the original programming like all the Marvel TV shows (which are pretty low quality scripts) and the remakes (which are low quality) really cost that much to make.
They are just now realizing the its extreamly difficult to actually make a profit with a streaming service. Most major ones like hbo max and disney+ lose billions a year. Netflix and hulu are the only ones that have been able to squeeze out a tiny profit.
The problem isn’t so much that it is hard to be profitable. It is that the Movie industry will just keep raising prices of the content until they are barely scraping by. Since there is 9 major streaming services they are effectively a commodity bidding over the media content. So the free market has squeezed the profit out of it.
Of course the streaming services then turn around and try to restore a profit margin by raising the prices. Now the consumers are facing raised prices for a small slice of available media and realizing that this is both expensive and inconvenient.
Even if the consumers keep using the streaming services at a higher price the media companies will notice that they are making a profit again and jack the prices further. The streaming services are basically helpless middlemen.
This is of course why just about ever streaming service is starting to produce first-party content. This is where the money is as they are in control of the price and don’t have to outbid other streaming services.
Do we have concrete evidence that this is true? I find it highly unlikely Disney+ was hemorrhaging money considering all the parents that are indefinitely subbed to D+ for the Disney catalogue.
Unless the original programming like all the Marvel TV shows (which are pretty low quality scripts) and the remakes (which are low quality) really cost that much to make.
They should report the losses at earning calls and i think they did. But i am to lazy to look it up.
Direct to consumer media lost $659M in Q1 this year https://thewaltdisneycompany.com/app/uploads/2023/05/q2-fy23-earnings.pdf