Cuts and Mergers at Streaming Companies

[ncted]

It’s “shakeout” time as losses of Netflix rivals top $5 billion

Disney, Warner, Comcast, and Paramount are contemplating cuts, possible mergers.

arstechnica.com

 

[Bruce]

It’s “shakeout” time as losses of Netflix rivals top $5 billion

Disney, Warner, Comcast, and Paramount are contemplating cuts, possible mergers.

arstechnica.com

Story was just not about streaming, more about how the whole entertainment world is ****** up, part of that is because of cord cutting and the transition to streaming.

Beyond their streaming losses, the traditional media groups are facing a weak advertising market, declining television revenues and higher production costs following the Hollywood strikes.

Rich Greenfield, an analyst at LightShed Partners, said Paramount’s deal discussions were a reflection of the “complete and utter panic” in the industry.

“TV advertising is falling far short, cord-cutting is continuing to accelerate, sports costs are going up and the movie business is not performing,” he said. “Everything is going wrong that can go wrong. The only thing [the companies] know how to do to survive is try to merge and cut costs.”

Then we have this story about more advertising $$$$ moving to streaming.

Advertisers Will Tune In To Streaming In 2024 As More Services Court Brand Dollars

With Netflix, Disney and soon Amazon joining the chase, advertising in streaming is in a boom phase. Will viewers stay tuned?

deadline.com

 

[primestar31]

Translate: "We are losing money left and right because of cord-cutting due to people not wanting to pay our high prices! We must raise prices on the remaining subscribers EVEN HIGHER to compensate!"

Idiots... Their greed has no bounds.

 

[Bruce]

Translate: "We are losing money left and right because of cord-cutting due to people not wanting to pay our high prices! We must raise prices on the remaining subscribers EVEN HIGHER to compensate!"

Idiots... Their greed has no bounds.

That is not what it said, they are losing money on all their entertainment, Traditional TV due to cord cutting ( more then 30 million have left) and the lost of advertising ( average of 50-75% less in $$$$ from ads).

Theaters/Movies up over last year, but still down from 2019/pre-covid, expected to be a $1 billion less then 2023 in 2024, due to the strike delays.

Now streaming, yes, they are losing, but all business lose when they start up, for example, DirecTV and Netflix took 6 years to turn their first profit, Dish and Amazon, 9 years.

Disney+/Paramount+ are expected to turn profitable 3rd or 4th quarter 2024, that means it will take Disney+ 5 years ( 1 less then DirecTV/Netflix).

Paramount+ officially started in 2021 when Viacom/Paramount took over, but it was CBS ALL Access before that, only owned by CBS, so it’s road to profit is more convoluted.

Peacock/AMC+ should give it up.

Services that have already turned a profit-MAX, ESPN+ and Hulu.

 

[FTA4PA]

Perhaps they are losing money because a lot of people, especially after Covid, have realized just how valuable their life and health really is and don't want to spend their days sitting in front of a box. Probably not... but maybe.

 

[Bruce]

Perhaps they are losing money because a lot of people, especially after Covid, have realized just how valuable their life and health really is and don't want to spend their days sitting in front of a box. Probably not... but maybe.

For Traditional TV yes, ratings are way down ( except for Football).

Streaming subscriptions are still going up.

 

[FTA4PA]

So I guess the oldsters (traditional tv) got the message while the youngsters (streaming) still think they are invincible.

 

[navychop]

I question if the author is fully up to date with making a statement like “Sports continues to be a beacon of hope.”

Otherwise, informative.

 

[Bruce]

I question if the author is fully up to date with making a statement like “Sports continues to be a beacon of hope.”

Definitely not, since the only sport that attracts good ratings in today’s world is the NFL.

All the other pro leagues, the ratings are in the toilet, for example, the World Series only averaged 4 Million Households ( out of 131 Million in the United States), just 7 years ago, it averaged 11 Million, that was right before cord cutting started.

While Paid Live TV has lost 30% of it’s subscribers, the World Series lost over 60% and the rest of MLB regular season is even worse.

The problem with the NFL, is it is a loss leader for the Networks since the rights fees are so high, the only time the Networks make a profit is when they have the Super Bowl.

 

[ncted]

Story was just not about streaming

Well, pretty much all media companies are streaming companies these days, so tomato-tomahto.

 

[Bruce]

Well, pretty much all media companies are streaming companies these days, so tomato-tomahto.

While almost true, like I said, not strictly a Streaming issue, it is an everything under the tents of Studio/Media/TV Provider issue.

Also shows why I have been saying the next 2 years will be a major transition time.

By the end of 2025, everything will be totally flipped, all small/Medium Cable/Providers will have given up on Video, almost all RSNs will be gone or close to it, most streaming will be profitable, the ones who have no chance will have merged or given up, a lot of cable channels will have shut down because of the loss of per sub fees ( mostly the rerun channels).

The biggest, both DirecTV and Dish will be at or close to unprofitability , their main issue is they do not have broadband like Charter and Comcast.

 

[Juan]

Perhaps they are losing money because a lot of people, especially after Covid, have realized just how valuable their life and health really is and don't want to spend their days sitting in front of a box. Probably not... but maybe.

Just don't want to pay thru the nose for it

 

[Juan]

Definitely not, since the only sport that attracts good ratings in today’s world is the NFL.

All the other pro leagues, the ratings are in the toilet, for example, the World Series only averaged 4 Million Households ( out of 131 Million in the United States), just 7 years ago, it averaged 11 Million, that was right before cord cutting started.

While Paid Live TV has lost 30% of it’s subscribers, the World Series lost over 60% and the rest of MLB regular season is even worse.

The problem with the NFL, is it is a loss leader for the Networks since the rights fees are so high, the only time the Networks make a profit is when they have the Super Bowl.

Not true at all..they sell billions in ads

 

[savarese04]

To be honest, if you are an advertiser and you have $100 to spend, which option sounds better:

A) Traditional TV for one spot where you are blasting a bunch of eyeballs, stuck among 7-8 spots during a ~4min ad break, and 85-90% of your audience actually DVR/FF through the add you paid for
B) Streaming where you can program the ad to target your specific demographic, prominent among 1-2 spots and under 60 sec ad break, and your audience is forced to watch the ad because there is no DVR skip

The reason Super Bowl ads are so $$ is because you have combination of eyeballs, no skip, plus pop culture moment that lasts longer than the ad itself. That has to be the only scenario where your ROI on traditional TV makes sense, despite the insane cost.

 

[Bruce]

To be honest, if you are an advertiser and you have $100 to spend, which option sounds better:

A) Traditional TV for one spot where you are blasting a bunch of eyeballs, stuck among 7-8 spots during a ~4min ad break, and 85-90% of your audience actually DVR/FF through the add you paid for
B) Streaming where you can program the ad to target your specific demographic, prominent among 1-2 spots and under 60 sec ad break, and your audience is forced to watch the ad because there is no DVR skip

The reason Super Bowl ads are so $$ is because you have combination of eyeballs, no skip, plus pop culture moment that lasts longer than the ad itself. That has to be the only scenario where your ROI on traditional TV makes sense, despite the insane cost.

And that is why ads during NFL Games are not being discounted and in demand because of no loss and a slight uptick in ratings.

While all other advertising slots on Broadcast/Cable Channels are being heavily discounted, while the strikes did not help, this is a trend that started about two years ago.

 

[MikeD-C05]

Translate: "We are losing money left and right because of cord-cutting due to people not wanting to pay our high prices! We must raise prices on the remaining subscribers EVEN HIGHER to compensate!"

Idiots... Their greed has no bounds.

Well they already killed the goose that laid the golden egg when they kept raising prices and fees on satellite and cable. Now everyone is streaming shows, but not paying the higher prices and even rotating streaming apps as they need them. So there answer is to now kill streaming off by merging back into forced bundles and hiking prices over and over again. We might just end up with the big 4 ota networks like we had for years now, for all our entertainment. I will not start paying more and more on streaming apps like we did with Satellite and cable. I might just end up with ota and Netflix, that my phone company pays for. I have an ota dvr that records everything fine for me and I can record 4 shows at the same time with my TABLO.

 

[ncted]

To be honest, if you are an advertiser and you have $100 to spend, which option sounds better:

A) Traditional TV for one spot where you are blasting a bunch of eyeballs, stuck among 7-8 spots during a ~4min ad break, and 85-90% of your audience actually DVR/FF through the add you paid for
B) Streaming where you can program the ad to target your specific demographic, prominent among 1-2 spots and under 60 sec ad break, and your audience is forced to watch the ad because there is no DVR skip

The reason Super Bowl ads are so $$ is because you have combination of eyeballs, no skip, plus pop culture moment that lasts longer than the ad itself. That has to be the only scenario where your ROI on traditional TV makes sense, despite the insane cost.

C) Paying for an AI influencer to promote it on Social Media
D) If you're big enough, do what eBay did and cut your advertising spend way back because everyone already knows who you are and what you do, so keep your $100.

 

[Joe The Dragon]

The biggest, both DirecTV and Dish will be at or close to unprofitability , their main issue is they do not have broadband like Charter and Comcast.

and what will fill what commercial establishment need?
some areas don't have the bandwidth to push 10-15 HD feeds at the same time and if 4-5 bars on the same cable node need to do that?

will commercial establishment really want to deal with 2-5 different box types? over 2-5 differnt accounts? with 2-5 different UI just to get all of the sports they get now?

 

[Bruce]

Well they already killed the goose that laid the golden egg when they kept raising prices and fees on satellite and cable.

Prices are still going up at a more extreme pace, Comcast, Charter and now DirecTV raise the price twice a year ( this is the 3rd year in a row Comcast/Charter have done it, first year for DirecTV).

Comcast’s increase starts Jan.1, package went up, Broadcast Channel fee went up, RsN went up, average increase total was $17-19 more s month.

Now everyone is streaming shows, but not paying the higher prices and even rotating streaming apps as they need them.

Actually streaming is still a lot less expensive, you get get the highest tiers (4K, no commercials, etc) of Hulu/Disney/ESPN, Paramount+/Showtime, Peacock, AMC, MAX (HBO),
with all those, you would get the vast majority of what is on Paid Live TV, all the streaming shows, etc, total would be only $77, of course you do not have to get all those if you do not wish to.

Now imagine how much Comcast or DirecTV would be with HBO and Showtime, Imwould assume about $140-150, about double the streaming price.

So there answer is to now kill streaming off by merging back into forced bundles and hiking prices over and over again.

That is just financial analysts pushing mergers, with interest rates so high and the bond market pretty stagnant, the media companies will not be making deals for a while.

For example Warner is carrying about $45 Billion in debt, but it has a market cap of only $25 Billion, so they will not be making any deals until more debt is paid down and rates get a lot better.

Comcast is carrying about $100 Billion in debt and has to deal with the disaster that is Peacock.

The only ones that can make deals are the one that are flush with cash-Google (nope), Amazon ( nope, just bought MGM) and Apple ( they are always mentioned when deals are being pushed, never happens).

 

[Keith Brannen]

So there answer is to now kill streaming off by merging back into forced bundles and hiking prices over and over again.

Don't forget commercials, first a few, then more and more, and all unskippable.