In just a few short months, streaming has gone from the fountain of youth — a virtual Schwab’s drug store where 100-year-old media companies have found themselves rediscovered — to a money-eating headache for digital natives and newbies alike.
Even during the pandemic, streaming remained an all-consuming colossus and something of a fever dream. Many billions were spent over a six-month period from late 2019 to 2020. Apple came in after years of tremors stretching back to the Steve Jobs era. Disney, WarnerMedia and NBCUniversal also joined the frenzy to catch up with Netflix after years of happily cashing their checks. Discovery+ and the revised Paramount+ followed a short time later.
That big swing would be costly, media giants warned investors, but soon they would have direct relationships with consumers. Fewer intermediaries, such as cinema owners or pay-TV operators, who haggle over terms. Less ambiguity about the goals of their advertising and programming messages. Finally, the mantra would be a reality – entertainment anytime and how the customer wants it. Tech players like Roku and Apple, meanwhile, believed Original Streaming Plan would be an ideal fit for the infrastructure they were building — especially if rewards could be added to the shelf.
This year, however, something funny happened on the way to Shangri-La. Netflix fell out of bed and reported its first subscriber losses in more than a decade, got off to a rocky start in ad-supported streaming, and struggled to bill subscribers for the long-free benefit of password sharing. All streaming operations came under intense scrutiny and stock prices plummeted, further weighed down by a souring global economy. Profits and the ability to sustain them—not just the rush to gain subscribers—became the new prize.
“Capital intensity has increased significantly,” wrote Ben Swinburne, a media analyst at Morgan Stanley, in a recent review of 2022, “and content asset sales and returns have declined.” He expects the net number of subscriber additions in 2023 across all streaming outlets will be about half what it will be in 2021. “The industry is clearly entering a new phase,” the analyst added, “one that we believe will be characterized by 1) cost rationalization, 2) consolidation (of services and/or businesses), and 3) exiting the DTC business altogether.”
With those sobering thoughts in mind, Deadline takes a look at eight of the major players in subscription streaming, assessing their performance in 2022 and what challenges lie ahead for the year ahead. Here’s our rundown (in alphabetical order):
STREAMERS: AppleTV+
HIGHLIGHTS 2022: An Oscar win for best picture KODA and an Emmy win for Outstanding Comedy Series for Teddy Lasso underscored a breakout year on the awards front.
2022 LOWLIGHT: Apple TV+ still has a tiny library of licensed content. As subscription cycling grows in popularity, a library of content is key to making subscribers stay.
MAIN CHALLENGE FOR 2023: After adding Major League Baseball games and bidding on NFL rights Friday night, can Apple capitalize on its esports push with the launch of a sibling streaming offering co-owned and operated with Major League Soccer?
BIGGEST QUESTION FOR 2023: With a cheaper tier of ads due to launch soon, will the Apple TV+ be more popular than the competition?
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STREAMERS: Disney+
HIGHLIGHTS 2022: Dancing with the starsABC’s move to Disney+ was a milestone in streaming, and the service was booming with content from some of the company’s most popular IPs war of stars and amazement Santa Claus and National Treasure.
2022 LOWLIGHT: Disney’s direct-to-consumer business, which includes Hulu and ESPN+, lost $4 billion this year even though the company added 12.1 million subscribers in the fiscal fourth quarter.
MAIN CHALLENGE FOR 2023: To get back on solid footing following the departure of Bob Chapek as CEO and the dismantling of the Media Distribution Unit’s centralized streaming structure.
BIGGEST QUESTION FOR 2023: Despite Chapek’s departure, will Bob Iger remain committed to making Disney+ profitable by fiscal 2024 — and at what cost?
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STREAMERS: HBO Max
HIGHLIGHTS 2022: The Emmys, where HBO and HBO Max won 38 trophies combined, doubling their 2021 tally.
2022 LOWLIGHT: Cancellations by the new Warner Bros Discovery regime, including In-the-Can titles like bat girl and bitchwhich have sparked backlash internally and within the creative community.
MAIN CHALLENGE FOR 2023: The merger of HBO Max with Discovery+, with a delicate rebranding effort that will likely remove the platinum HBO name.
BIGGEST QUESTION FOR 2023: Can DC’s overhaul – perhaps the ultimate rebuild embedded in the WBD empire – yield a Marvel-esque growth engine for HBO Max (or whatever its successor will be called)?
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STREAMERS: Hello
HIGHLIGHTS 2022: With original series like Intoxicated and Only murders in the building One click and the Hulu + Live TV bundle is gaining ground, the total subscriber base grew by 8% compared to 2021, reaching 47.2 million.
2022 LOWLIGHT: While Hulu was a pioneer when it first launched, lately it’s been showing its age from a product standpoint. It’s almost 2023 – can someone at least give this UI a fresh coat of paint? Even Prime Video in 22 finally overhauled its long-shaky home screen, leaving Hulu as an industry laggard.
MAIN CHALLENGE FOR 2023: With Iger back at the helm at Disney, it’s up to Hulu to figure out what the 15-year-old streamer wants to be when he grows up. It was in limbo until Disney was able to buy out Comcast’s 33% stake in early 2024.
BIGGEST QUESTION FOR 2023: With the Comcast buyout floor set at $27.5 billion (and likely higher depending on an independent party’s assessment), will Disney pull the trigger? And will it try to consolidate it within Disney+, as many insiders have suggested?
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STREAMERS: Netflix
HIGHLIGHTS 2022: Massive viewership for series like Wednesday and dahmer and event films like The gray man and Glass Onion: A Knives Out Mystery.
2022 LOWLIGHT: The harrowing first few months of the year, in which 70% of market value was immediately wiped out by subscriber losses and the indiscriminate announcement of a decision to reverse course and accept advertising.
KEY CHALLENGES FOR 2023: Gain traction with the slow-starting $7 per month ad-supported subscription tier; Getting customers to pay extra to share their passwords; Breakthrough in video games.
BIGGEST QUESTIONS FOR 2023: Will the competitors close the gap? And will the company crack down on its professed aversion to theatrical performances and live sports, just as it has reversed itself in advertising?
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STREAMERS: Outstanding+
HIGHLIGHTS 2022: The release of 1923the yellowstone Prequel series directed by Harrison Ford and Helen Mirren, two weeks before the end of the year. The premiere episode broke Paramount+ viewership records and signaled a victory for the streamer’s original content.
2022 LOWLIGHT: Investing in streaming drove parent company Paramount Global’s earnings down, prompting executives to eye “significant and substantial” cost cuts for the new year.
MAIN CHALLENGE FOR 2023: Balancing streaming with linear television is a dilemma for all major media companies, but a particular one for CBS, MTV, Showtime and a host of other network brands.
BIGGEST QUESTION FOR 2023: Will Paramount Global be able to reduce costs without sacrificing investment in original content?
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STREAMERS: peacock
HIGHLIGHTS 2022: Soccer World Cup brings huge crowds in the door for Telemundo coverage.
2022 LOW LIGHTS: The abrupt change of soap opera days of our lives from NBC; Day-and-date streaming from Halloween ends it debuted in theaters at the same time in October, a pandemic-esque move that likely shaved millions from its opening weekend box office.
MAIN CHALLENGE FOR 2023: Growing subscriber numbers and justifying projected increases in content spend. Peacock ended the year with just 18 million subscribers — to be fair, however, the number has grown noticeably over the past year as the company’s strategic focus shifted from the free basic tier to premium subscriptions.
BIGGEST QUESTION FOR 2023: Could parent company Comcast attempt to rise via a joint venture (as is the case with Paramount Global in Europe) or some other form of M&A?
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STREAMERS: Prime video
HIGHLIGHTS 2022: Originals and live sports led by staggering viewership for The Lord of the Rings: The Rings of Power and the debut of exclusive NFL streams Thursday night soccer.
2022 LOWLIGHT: News that Jeff Blackburn, a 25-year company veteran and architect of Amazon’s streaming video strategy, is retiring in January.
MAIN CHALLENGE FOR 2023: Blackburn’s departure will result in some senior management reshuffle at a time when the company is already grappling with the integration of MGM.
BIGGEST QUESTION FOR 2023: how to follow The Rings of Power with another series of events.