The Wall Street Journal recently reported that the streaming industry is finally showing a profit. But, for consumers, it’s messy. The second sentence seems to be an understatement.
Most of us subscribed to a cable TV package for years. And most of us saw significant increases year over year until we ultimately decided we no longer needed cable TV. The ultimate factor was an option to switch to streaming companies like Netflix, Hulu and others that provided a new generation of must-see TV — at prices Americans were comfortable paying.
To be fair, cable TV providers were being hit with increases for fees to carry popular channels, and they were, in most cases, simply passing that along. Regardless, enough was enough.
So, we happily subscribed to services like YouTube TV, Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, and Peacock. And, we now unhappily keep paying increases in these fees to the point where many of us are now paying as much or more than we were with cable TV. Maybe that’s what all the “+” symbols mean.
As a result, streaming subscribers are cycling in and out of services, timing their starts and stops to popular show releases or sporting events. As reported in the Wall Street Journal, that means streaming companies are constantly adding and losing significant numbers of subscribers.
Netflix continues to be the king of streaming services, nearing $3 billion in adjusted quarterly earnings. Warner Bros. Discovery has also shown a profit in the last three quarters, as has Disney. Paramount and Comcast are still losing money but are moving in the right direction.
The change is happening the same way most any business becomes profitable — by increasing revenues and cutting expenses. From 2007-2010, the average number of streaming subscriptions per household was one. Today, it is nearly five. The demand and desire clearly exists.
The report shows how premium streaming services have also aggressively cut costs, in part by making fewer shows and films. They are also increasing the use of bundling and trying to limit password-sharing while pushing more advertising.
The streaming industry, which began so wonderfully simple, has become complicated, convoluted and costly — the same words so many of us used to describe cable TV. Messy, indeed.
Have a terrific Tuesday, and thanks for reading.
Shane Goodman
