Where is the streaming media industry headed?
Streaming media industry changes are coming, and the market we know today could be radically different in a few years.
Remarkably, it’s less than 20 years since YouTube launched, and only 16 years since Netflix began streaming movies and box sets instead of posting out DVDs.
There followed 15 years of meteoric growth in streaming media, culminating recently in soaring numbers of streaming platforms available to UK consumers.
BritBox, Disney+, Peacock, Now TV, Amazon Prime Video, Paramount Plus, Apple TV+… the list goes on.
Then we have audio-only streaming services like Spotify and Apple Music, alongside dedicated podcast sites such as SoundCloud and Anchor.fm.
The list goes on with niche providers like Viaplay, who now host live sports including UEFA Nations League games, PDC tournaments and La Liga matches.
Yet this surge in companies offering paid subscription packages for streaming media has coincided with a global downturn in economic fortunes.
Even if you disregard legendary investor Michael Burry’s $1.6 billion bet on an American stock market collapse before Christmas, hard times are undoubtedly on their way around the world.
As such, streaming media industry changes are likely to accelerate rapidly, through a mixture of consolidation, cost-cutting and collapse.
Here’s how the sector is likely to be impacted, both in the UK and internationally…
Stream of consciousness
We mentioned a dozen streaming platforms above, but there are plenty of others in the UK market.
Even at a time of affluence, there’d be far too many services for any household to consume in sufficient quantities to justify all those subscription costs.
Needless to say, this is not a time of affluence, as millions of British households struggle with soaring inflation and stagnant incomes.
Multiple monthly subscriptions are increasingly unjustifiable for many people, especially on top of existing triple-play subscriptions, ISP contracts and the BBC licence fee.
This is going to have major ramifications throughout the streaming sector…
Change in the house of FLACs
We’ve already seen hugely significant streaming media industry changes in recent months, following the introduction of adverts to formerly ad-free platforms.
It’s always been understood that the licence fee keeps adverts off the BBC’s TV, radio and digital channels, while the same was historically true for the likes of Netflix and Disney+.
Yet both these brands are rolling out slightly cheaper subscription packages which are paid for in the traditional way, yet also peppered with ads.
That’s a significant break from previous streaming models, which chose one funding method or the other. YouTube is free but ad-supported; Amazon Prime Video is paid for but ad-free.
Admittedly, consumers could pay a further premium to remove ads, but this two-tier subscription service chips away at a key USP of paid streaming platforms – uninterrupted viewing.
Even bolstered by additional ad revenue, the sheer number of platforms (and the resulting fragmentation of content) is clearly unsustainable.
A wave of mergers and acquisitions has already begun; HBO Max and Discovery+ are in the process of merging, while Disney+ and Hulu are also set to be combined into one app.
It’s unlikely that services currently unavailable in the UK will come here, now that the number of British households subscribing to multiple streaming services is in decline.
The write intentions
Finally, it’s impossible to overstate the damage the ongoing writers’ strike in Hollywood will do to on-demand services that justify monthly fees with a constant churn of new content.
As series currently in-production are released, there’ll be nothing coming along behind them.
Soon, the only new content offered by American platforms will be independent productions, imported shows or low-budget reality TV.
None of these will persuade cash-poor consumers to maintain subscriptions to video streaming services, though audio content won’t be unaffected.
Because British writers and artists aren’t on strike, this might also allow home-grown content to flourish.
Free services like BBC iPlayer and ITVX may be among the few beneficiaries of market contraction, as people seek to maintain streaming habits without paying for them.
Domestic outlets should thrive, then, even as the array of streaming apps on your smart TV and smartphone begins to dwindle…
