The Great Streaming Pullback Will Have Consequences

Does responsible spending lead to increased churn? More ads?

Losing billions is out. But will fiscal responsibility in streaming lead to more consumers to bail?

That’s a big question facing the TV industry, which is suddenly touting its restraint. Consider that:

·       Warner Discovery boss David Zaslav, who appears to enjoy Knick games about as much as a trip to the DMV, recently talked up that HBO Max/Max will be profitable this year, and is “no longer bleeding” cash. That reality has surely been helped by the fact that Zaz has spent the past few years severely cutting back on Max’s output

·       Paramount’s stock got hammered last week as the company unveiled a $1.1 billion short term streaming loss. But CEO Bob Bakish spoke about this year representing “peak streaming investment” while predicting that Paramount+ will make money next year

·       Peacock is bleeding cash for NBCU, but this year is it! “As we have said before, we believe 2023 will be peak losses for Peacock, and from there [they will] steadily improve,” said Comcast president Michael Cavanagh recently.

·       Even Netflix has even kept its spending flat for several years

·       And of course, Disney said yesterday it is looking to curtail losses for Disney+ by pulling a bunch of shows from the service. Under CEO Bob Chapek, the company has already said it plans to making fewer programming bets for streaming.

• Alex Sherman @sherman4949 Disney will be removing content from its streaming services and will take a $1.5b-$1.8b impairment charge. Disney will produce "lower volumes of content," CFO says. It's the David Zaslav playbook!

Translation- these companies are all going to spend less, and therefore make less stuff, while expecting you to keep paying the same – or more likely higher – prices.