Business & Economy

Amid signs of market saturation, streaming platforms seek new growth avenues

By Guillermo Azabal

Los Angeles, Sep 5 (EFE).- The global market for video on-demand streaming platforms has shown signs of saturation for months, forcing companies to devise new strategies to halt subscriber bleed, recover from financial setbacks, avoid more layoffs and boost revenue.

Netflix has lost nearly 1.2 million subscribers since the start of 2022, while CNN+ shut down just weeks after it debuted and Apple TV+ has been growing slowly and currently has just a 6 percent market share in the United States despite major investment outlays.

Nearly a dozen major streaming services, with Netflix and Disney+ in the lead, are locked in a fierce battle for subscribers and, according to experts, will only be able to achieve sustained growth if they go the merger route, launch cheaper ad-supported tiers or stream live events.

The next steps taken by Netflix, Amazon Prime Video, the Disney empire (Disney+, Hulu, Star and ESPN+) and Apple TV+ will be scrutinized by their own investors and smaller rival platforms that also are trying to make a dent in the video on-demand streaming market.

One significant merger has already taken place in that industry, with Warner Bros. Discovery announcing in August that HBO Max will be combined with its corporate cousin Discovery+ and start operating in the summer of 2023 as a single streaming service.

The merged entity will kick off with around 100 million subscribers worldwide between HBO Max’s 76 million and Discovery+’s 24 million (mainly in the US).

Separately, even though ad-free spaces were an initial benefit offered by the streaming platforms, times have changed and the widespread incorporation of advertising-supported tiers now seems inevitable.

Netflix said in April that starting next year it will begin offering a lower-priced subscription featuring ads.

Watching series or films with ads is nothing new for HBO Max’s subscribers, who since last year have been able to opt for a lower-cost ad-supported tier.

Robert J. Thompson, a professor at Syracuse University and founder of the Bleier Center for Television and Popular Culture, said Disney+ will raise prices in December to $10.99 a month for its current ad-free service.

He added that subscribers who want to pay the same $7.99 cost as before will have to switch to a new ad-supported tier.

David Craig, clinical professor of communication at the University of Southern California, told Efe for his part that advertising “is going to be probably the easiest path to add more revenue, but (is) not without risk.”

“It’s not exactly sure how they’ll do programmatic advertising, which is done through artificial intelligence, meaning they won’t be selling in each market. There’s not a lot of global advertisers that you can immediately identify,” he added.

Live content also has emerged as potential key source of income, one that some of the streaming giants are now seeing as a viable possibility for the first time.

Disney’s subscription sports streaming service, ESPN+, was introduced in 2018, while London-based DAZN streams live and on-demand sports content – with a heavy dose of European soccer – in more than 200 countries and territories.



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