Are Streaming Investments Too Big to Fail?
July 01, 2021
By Rich Nachmias
There is no denying that Americans spent much of 2020 streaming everything they could get their hands on. In Q1 2021, 46% of U.S. households with internet access reported subscriptions to four or more streaming services; in Q1 2020, it was only 22% of households, per Next TV. But are we tired of streaming? Statistics from The Drum indicate the average number of streaming services viewed by an individual dropped from 7.23 in November 2020 to 7.06 in April 2021. Since this metric had consistently increased in the past, the recent decline may indicate the average viewer is growing fatigued and is not as eager as they once were to subscribe to the growing number of streaming services available.
Whether this fatigue is due to viewers needing a break, market equilibrium or people heading back to outdoor activities, big companies in the streaming business are working hard to keep viewers interested. From mergers and acquisitions, to new partnerships with well-known industry giants, companies like Netflix, Amazon and Warner Bros. are creating new and exclusive content, all while gaining access to libraries with popular movies and TV shows.
Amazon’s recent purchase of MGM will allow them to provide audiences both new content and an existing catalog of Oscar-winning films and fan favorites. However, they are not the only entertainment company increasing their market value with new partnerships and purchases. Netflix recently announced a new partnership with Amblin Partners, Steven Spielberg’s production company, in which Spielberg will create multiple films for Netflix. According to Deadline, this partnership comes after the successful and exclusive Netflix release of Amblin’s Oscar-nominated The Trial of the Chicago 7. Netflix hopes by creating new content with exclusivity and well-established productions they will reach new customers and increase engagement with their current audience.
WarnerMedia and Discovery are also combining forces with the newly named WarnerBros. Discovery. The goal is to compete alongside Netflix and Amazon in the streaming market. Deadline further reports that this merger, likely to be finalized in 2022, will consolidate entertainment and media such as HBO and HBO Max, HGTV, TLC, TNT, TBS, Food Network, CNN and DC Comics, to name a few. The creation of this vast library of popular content will allow WarnerBros. Discovery to offer its audience a comprehensive viewing experience. The belief that the consumer wants more content under one service roof is driving this merger and setting the strategy of this new company.
While the rise of streaming viewership has taken a temporary pause (for whatever reasons) streaming moguls are continuing to jockey for the lead with new investments. Viewers may be temporarily distracted, but the interest is still there. And with recent collaborations and purchases, it’s clear the streaming world has gotten too big to fail.