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Post-Peak Performance in the M&E Universe

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Paris’ 1889 Exposition Universelle not only yielded the city’s defining structure, the 300-meter Tour Eiffel, but marked the 100th anniversary of the storming of the Bastille and the downfall of the French monarchy. (Never mind that the “century of republicanism” celebrated at the fair had twice been interrupted by coups d’état and lengthy Bonapartist interludes.) Before settling on Gustave Eiffel’s architectural pièce de résistance, the exposition’s organizers briefly crowdsourced the concept, stipulating only that it had to stand taller than the Washington Monument, which had been completed across the Atlantic the year before. The cleverest proposal they received was a 300-meter guillotine, submitted in ironic salute to the invention that brought the republic the fair would fete inexorably to life.

Although it long predates my time in the streaming world, I’ve heard more than one grizzled industry veteran attribute streaming’s early success (not to mention its first purpose-built tech) to the distribution of adult content that we might be disinclined to commemorate publicly today. But years from now, when we look back on the M&E universe’s current inflection point—contending with the end of the era of peak TV and the recognition that COVID-era subscription numbers are unlikely to return—how will we say streaming survived and thrived, as its primary drivers shifted from unprecedented levels of creative content development to consolidation, ad-tiering, and licensing wars?

Early indicators are mixed and are not exactly the type of triumphs to which we’d want to build monuments. Probably the most eye-catching success story of late 2023 was Netflix’s strikingly successful implementation of a password-sharing surcharge. With 35% of American subscribers now paying for a service they had previously accessed for free, Netflix enjoyed its largest single-quarter subscription boost (13.1 million) since 2020. But given that lockdown- and crackdown-driven spikes are likely to be one-off events, these bumps will look like unmistakable outliers in the coming years.

The recent Subscription Wars report commissioned by U.K.-based digital payments tech company Bango points to consumer dissatisfaction with the fractured state of subscription services in general and the increasing appeal of indirect subscription options and super-bundles of aggregated services sold through telcos like Optus in Australia. Perhaps it’s another sign of less-than-inspiring times that the best thing consumers say streaming services can do for them is to stop standing out from the crowd and start disappearing into it.

Some of the biggest streaming news of early 2024 has concerned high-profile bundling plans, with a rumored Paramount-Peacock mer­ger (uniting two companies coming off combined billion-plus quarterly losses) following fast on the heels of ESPN, Fox, and Warner Bros. Discovery announcing a massive sports licensing joint venture. Although the Peamount deal ran aground quickly and the latter merger has been variously criticized as a Disney Q4 earnings call concoction that represented no actual deals with the NFL or any other significant sports leagues, as well as a monopolistic power grab designed to freeze out legitimate competition, it may well fail simply because it doesn’t eliminate enough of the competition, said Hub Entertainment Research principal Jon Giegengack at Streaming Media Connect 2024.

“Even if you take it at face value,” Giegengack said, “optimistically, you’re still missing about 30 percent of all the sports content that’s out there if you don’t have NBC or CBS. And something that has 60 or 70 percent of sports is not 60 or 70 percent as valuable to consumers—it’s 0 percent as valuable. It’s a complete non-starter.”

The biggest barrier to establishing super-bundles that would aggregate all of the content consumers want and make their individual sources indistinguishable from one another, Giegengack says, is that “they’re all still hanging onto this idea that ‘I’m going to be the next Netflix, so we all have to guard our brand and not collaborate too much.’”

An exciting prospect in a time when Netflix’s last signature win came from cashing in on punishing password-sharers. Vive la révolucion.

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