Subscribers play musical chairs with streamers as costs rise

As Hollywood studios move forward with their plans to expand their direct-to-consumer streaming offerings, the price of content is getting more and more expensive.

NBCUniversal will delay Peacock’s launch in Australia by at least two years, with the studio in the market to sell its content under an output deal that will be hotly contested and costly for the eventual winner.

For consumers, this is good news because there will be no other streaming service to pay for. For Stan and Binge, the availability of more marketable TV shows and movies will be positive, but the cost of getting that deal will be high and complete with a poison pill clause in the contract allowing NBCU to go straight to the consumer at any time. .

The other big competitor likely to launch in Australia is HBO Max. He wants to be in 190 territories by 2026, suggesting Foxtel’s stranglehold on the HBO contract, which expires in December 2023, is not guaranteed.

HBO Max is set to merge with Discovery+ within the next 18 months following WarnerMedia’s merger with Discovery, which was completed earlier this month. This merger has already led to the quick death of a US-based streaming service – CNN shut down CNN+ on April 30, a month after it launched.

Discovery CEO David Zaslav plans to consolidate all of the company’s brands under one streaming service, mimicking Disney’s approach to international markets where it ruled out the launch of Hulu, favoring the distribution of this content in Disney+. Australia is a good test market to see how a combined HBO Max and Discovery+ offer will be received.

Local players Binge and Stan have built their subscriber bases through content aggregation, supplemented by investments in local originals. Hollywood studios’ push toward DTC has hurt their ability to acquire highly marketable TV and film content, driving the price of remaining content skyrocketing.

So far, the answer has been for streaming services to impose that cost on their subscribers, but Netflix’s churn rate suggests that leverage will no longer be a viable option.

“Netflix is ​​constantly reviewing its pricing structure and to some people it feels like it just keeps going up, and maybe it’s reached a tipping point,” said Marc C-Scott, master of on-screen media lectures at Victoria University.

“We are coming out of a pandemic, there are people reconsidering where their entertainment dollars are going. If you have so many subscription options, you’re going to choose one over another, or you’re going to bounce between them.

Netflix CEO Reed Hastings pointed to shared passwords as a problem. For streamers looking at their potential market, it seems like there is room to grow, but in reality, these people are already using these streaming services, they just aren’t paying for them.

For all of these companies, the goal is to convert dollars into viewers, and back into dollars, but that’s getting harder and harder as content becomes more and more expensive to create and acquire, and the market Australian will feel the effects.

As content becomes harder to find and subscribers vote with their credit card, it will become a game of musical chairs as there is unlikely to be enough content to sustain all services. urge.