Judy: After years of free
spending, the peak era of
streaming may be ending.
Streaming services are raising
pricing and the addition of more
advertising.
Content could be affected, too.
Exact numbers are hard to pin
down but Netflix alone
reportedly spends more than $17
billion a year on content for
its 220 million subscribers
combined.
Streaming companies may spend
more than $100 billion each
year.
Jeff benntt breaks down what it
all could mean.
>> As streaming evolves, the
industry's experience and some
growing pains.
Netflix is hemorrhaging
customers for the first time in
a decade.
It expects to lose even more
this year.
Netflix planes rampant password
sharing but there is also more
competition and the company's
decision to increase prices.
And CNN plus, the streaming
service launched three weeks
ago, announced they are shutting
down at the end of the month.
For more on the shakeup in the
streaming world, we turn to Kim
masters, the Hollywood reporter.
After a decade of incredible
growth, Netflix has reached what
is likely its lowest point, it
has lost subscribers for the
first times in 10 years, the
stock is getting pummeled.
What accounts for this stumble?
>> Well, the theory was the
sky's the limit.
We can get to one billion
subscribers.
What happened is, the model just
didn't deliver.
They have raised prices.
People complains that there is
too much content, it is not good
enough and they do not know how
to find it.
They H-- spent and spent.
They have been gung ho about
throwing billions into content
and for a while it worked.
But they have had a series of
problems.
They lost friends and the
office, the most popular content
as their competitors all ramped
up their own streaming services,
Disney plus and HBO.
And that has been another
problem.
They have competition now.
Competition that is taking back
some of the programming that
built them in the first place
when they took a cheaply.
They got deals on old shows,
very cheaply.
These guys looked at Netflix and
said, we had better compete and
they took those things back and
they are competing at lower
prices.
>> So Netflix says it is going
to be open to offering lower
priced subscriptions with
advertising.
For years, they said they did
not want to have commercials.
They are clamping down on
password sharing and they will
invest more in gaming.
Will any of that move the
needle?
>> It is a very tricky path.
First of all, the -- it was
heresy.
They vowed, we will never
advertise.
And now they're basically saying
uncle.
It is not something you flip a
switch and suddenly you have
advertising.
Some of those competitors spent
years and years developing this.
You need to staff, you need to
figure out how it works.
And so, that hasbeen one.
I wondered whether people who
got used to the Neff looks model
with no ads and churned out
because of the price and come
back in, will go, wait, there is
too much ads now.
The ad load is a big question.
Password sharing is a little
dicing.
You have to go after the people
who are paying money and are
used to this.
Everything has a risk.
>> What does this mean for
legacy studios that are going
all in on streaming, especially
for Disney plus or HBO that have
a smaller subscriber base than
Netflix?
>> The smaller base is a good
thing because they have room to
grow.
Netflix is the biggest with 200
million but Disney is not there
in neither is HBO max.
So, it is very ironic because
this is Wall Street driven.
Wall Street was all about
streaming, streaming is the
future.
Everybody in Hollywood sort of
pivoted and threw so much
resources into streaming.
Now all of a sudden, diversity
is the new sexy, and the legacy
studios where people alike, they
have got this dying cable
business.
The dying cable business throws
out a ton of money.
All of a sudden these guys that
were apologizing and say, we are
working on our steamy service,
they are kind of like don't we
look good?
They are hurt by this, make no
mistake because their stock
price was dragged down with the
hit that Netflix took, and the
anxiety about Wall Street has
pivoted.
Now they are saying that
streaming is not the future.
They're hurt, too.
They all have streamers but we
have heard -- who just took over
at what is now Warner bros.
Discovery saying already before
this happened, we will compete
but we are not going to kill
ourselves.
>> The question about that, how
is that dynamic, the questions
about streaming, add to that the
pandemic, how does that change
what gets greenlit>
I'm curious about how we watch
and how that has transformed
what we watched.
>> One of the things that
Netflix has done, which is not
pandemic related is the binge
model, where you get everything
at once and you can stay up all
night and watch it.
We compete with sleep.
The other ones have been a
little bit more cautious.
We're going to drop one or two.
They want that water cooler
moment.
They want to have a big moment,
an episode and you talk about it
and maybe at the office the next
day or on a zoom call.
That is a model that Netflix has
clung to, that they may want to
We'll see.
In the terms of the
pandemic we have a glut of
shows.
A lot of content creators and
producers and their agents are
very nervous that all of those
nice commissions are not going
to be so rolling in so freely.
>> Kim masters, editor at large
for the Hollywood reporter.
Thanks for seeing you.