Streaming platforms have tough choices in a world of fresh opportunities

livemint.com:

Even as the profitable linear TV and its appointment viewing business dies a slow death, streaming and binge viewing, while being a dream scenario for consumers, isn’t a profitable business for media companies yet. Netflix and its 265 million premium subscribers globally exist in an ad-free world; at 4 users per subscription, this is over a billion premium consumers who aren’t easily reached by traditional advertising. The streaming service had a head-start built on content from traditional studios and TV networks.

By the time others woke up, it had enough momentum to create original content to feed its global service. Companies seeking to emulate Netflix struggle with the economics of it: Content is costly, as also customer acquisition and retention of low-paying, high-churn customers. Now with many competitors in the mix, consumers are not paying for every service.

Indians have figured how to alternate between services to get the best of all worlds. Since late 2022, with the first ‘fall in subscribers’ quarterly guidance, Wall Street has punished (perhaps irrationally) the entire streaming business. To add to their woes, in 2023, writers and then actors went on strike in the US.

Many have deferred expansion plans, cut costs, revised strategies and sought consolidation. While it is the same storm, not all platforms are in the same boat. For some, it is just another business vertical.

For others, it’s their only business. Some have deep pockets, others seek prestige, some have momentum, and many need revenue to drive growth. All this can make for curious content strategies.