What can save Netflix? Who killed CNN+? What the hell is going on between Disney and Florida Governor Ron DeSantis? It’s a big media hellscape roundup. Rich Greenfield, general partner at LightShed Ventures, forecasts a rocky future for streaming. Nick Papantonis, a reporter for WFTV in Orlando, explains that Florida’s war against Disney might have some surprising collateral damage. Part of their conversation has been excerpted below.
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Derek Thompson: So I’ve interviewed you a few times in the last few years, and typically it’s been about how streaming was eating the world and traditional TV was in consistent decline. And now the worm has turned a little bit. Netflix is losing subscribers, and says it will lose more next quarter. The stock is way down. My big first question for you is: Is this about Netflix or is it about streaming? Did Netflix mess up in ways—and we’ll talk about all the various ways it might have—or is the big picture here that we’re just in a new chapter of streaming where these big Goliaths are fighting over a relatively zero-sum pie?
Rich Greenfield: I think that’s sort of the multi-trillion-dollar question. So I do agree with the premise that this has always been about the transition from linear TV to streaming TV. And it looked like there was huge long-term opportunity. I mean, you had guys like Jason Kilar from Hulu and then most recently from WarnerMedia within AT&T talking about a billion subscribers potentially, and Reed Hastings talking about 700-800 million and how the next hundred million subs will come from India. And here we are, and growth overall for the sector is slowing pretty dramatically. Everyone is talking about a slowdown in subscriber growth. This is not just Netflix.
I mean, Netflix is obvious—they’re the giant in the category, and so them seeing negative subscriber growth in Q2 and talking about, you know, some level of growth for the year but certainly nothing near what people were expecting has certainly made everyone sort of step back and go, “Is streaming over?” Like, is it mature? Is it just timing, meaning the pace of growth to get to 700 million, a billion subscribers is gonna be much, much more extended than expected?
Maybe part of that was COVID accelerating and we just overshot. And now it’s gonna take a couple years to work its way out. Maybe that’s part of the answer. And remember, a lot of these services were just launching during the pandemic, so you sort of turbocharge some of these services, so maybe that’s all played into it.
The economy is weakening. Obviously we’ve got inflation rearing its head, Europe sort of teetering on recession, recession talks about the U.S. Like, there are a lot of factors. We’ve still got supply chain issues for connected TVs overseas.
And then on top of it, certainly companies like Netflix, calling them out specifically, I think has had less iconic programming, less breakthrough programming, than they had hoped for, or they had done in prior years. I think they just haven’t had as many sort of iconic big hits that have really worked relative to what they’re spending.
So I don’t know if there’s one specific answer, but I will say that it does feel like the story of wild up-and-to-the-right growth of streaming does feel very much dampened. And the question that everyone should be asking is, well, linear TV’s dying. If streaming TV is a smaller business or not as profitable of a business, then what? What are these companies supposed to do? Like, what is Plan C if A and B are not [working]? And I don’t have that yet. I don’t actually know. I think that’s what all these management teams need to be thinking about. Like, they were all chasing Netflix. If Netflix isn’t as sexy to chase, what do you do now?
DT: Yeah. If Plan A was linear television, that’s in structural decline. Plan B, streaming, seems to be flat-lining. What’s Plan C? I have some ideas about what Plan C might be, but that’s a question for a few minutes from now.
This excerpt has been lightly edited for clarity.
Host: Derek Thompson
Guests: Rich Greenfield and Nick Papantonis
Producer: Devon Manze