Today’s episode is about the entertainment and media industry’s tumultuous summer, the streaming wars, a come-to-Jesus moment for movie theaters, and a dramatic revamp at CNN—which tells a lot about the state of the news industry. My guest is Matt Belloni, host of the Ringer podcast The Town and a founding partner at Puck News. He tells us what he’s hearing from his deep industry sources about the future of the blockbuster, the demise of the romantic comedy, the purge at HBO Max, and the murky path forward for Netflix. He also indulges me as I try to think of restaurant analogies for all of the major streaming companies as they try to differentiate themselves in a crowded field. (If you’re not familiar with the amenities of the Tri-State area, this might be a good time to look up “Wawa.”)
In an effort to understand differentiation in streaming, Derek and Matt compare the major streaming companies to restaurants.
Derek Thompson: I’m really interested right now in the way that the streamers are trying to differentiate themselves, because I feel like in the before times, before inflation, before the pandemic necessarily, before you had rising interest rates and these companies’ stock prices collapsing, there was this anticipation or this expectation that they could just grow and grow and grow. And when your fortunes seem relatively infinite in terms of growth, you don’t really have to differentiate. You’re just trying to make as much stuff as possible. But now that it seems like the pie is a little bit more zero-summy, I see them trying to differentiate themselves.
And I thought that one fun, silly, maybe entirely stupid way to think about their attempts to differentiate themselves is to think about the streaming companies as restaurants. So I have three restaurant metaphors that I want to throw at you. And then you can throw back at me any deeply held criticism that you have. So this is for Netflix, Disney+, and Amazon Prime Video. We’ll save HBO Max for the end.
So Netflix is like Starbucks. It’s everywhere. It’s popular. It’s almost a utility. A lot of people use Starbucks as a literal public restroom that happens to just serve coffee. And the same way that Starbucks has surprisingly sophisticated espresso equipment and a handful of high-end roastery locations that serve pretty fancy coffee, Netflix is this incredibly widespread, popular public utility that seems kind of middlebrow, but also is always reserving a bit of its slate for Oscar and Emmy fare. So it’s mostly middle class, but it has a couple of things that it really wants to be prestige.
Disney+ is like Dunkin Donuts. It’s fundamentally a kid’s food place, but somehow most of the clientele is actually adults. These are donuts. It’s cake with icing on it, but people are eating it. Adults are eating it who are 40 years old and it’s like, yeah, OK, fine. You have sugar cake for breakfast.
Matt Belloni: Or 50, if you’re Ben Affleck.
Thompson: Or 50 if you’re Ben Affleck, right. And it’s the same with Disney+. Disney+ is Pixar and superheroes, but it’s fundamentally for children ages zero to 100. That would be their tagline.
Belloni: And you’re right, because Disney says that the majority of their customers on Disney+ are adults with no children, which is a shocking stat to me.
Thompson: A shocking stat, but not shocking if you think of them as Dunkin Donuts, because Dunkin Donuts serves cake for breakfast, but somehow Ben Affleck is there every day.
Amazon Prime Video is like Wawa. And if you don’t live in the New Jersey area, this is going to be a little bit tougher for you. But Wawa is basically this very popular convenience store, kind of like a mega 7-11, but it also serves some original food. And that to me is what Prime Video is. I use Amazon Prime Video mostly to rent movies and buy movies when I realize that they’re available to rent and buy. But every once in a while, I’m hanging out in Amazon Prime Video and I’m like, “You know what? Yes, I will watch Bosch. I will watch a few episodes of Reacher.” And that’s the same way that you’re in the Wawa. You’re buying your whatever, your gum and your aspirin, and then you’re like, “You know what? I could really use a hoagie.” And so you make use of their ready-to-go features.
So that brings me at last to HBO Max, which really stumps me because I’m actually not sure what [David Zaslav] is trying to build here. Is it a place for adults, like prestige and drama and dragons? Is it something else? So I give you way too much with that prompt, but if you have any objections to my metaphors, let me know and go with HBO.
Belloni: Yeah. I think there is a restaurant analogy here because for much of its existence, HBO was trying to be, let’s call it a Ruth’s Chris or Morton’s or Mastro’s these days, where it’s a national fancy steakhouse, where there were a lot of people that it was for, but there were just as many people, if not more, that it was not for. And you knew when you saw the HBO brand that this was either for me, or it was not for me.
What they’ve tried to do with HBO Max over the past couple years is introduce some fish and some veggie options and things that will bring in a different clientele into the fancy restaurant. And that seems to be the model for HBO Max. Now what’s coming is they’re going to mash it up with Discovery. So they’re going to essentially try to take the Mastro’s and combine it with an Outback Steakhouse, and then maybe throw in a couple Big Macs from McDonald’s and see if they can bring more people into this, let’s call it a food court of meat, where there’s the fancy version, there’s the midlevel version, and then there’s the dirt-cheap 90 Day Fiancé version of the hamburger. And they’re going to see if they can take that global and compete with a Netflix with that kind of product.
And I’ll be honest, I am in the target demo for HBO. I am a white male in his 40s who loves premium television. HBO is for me, but over the past couple years, they’ve done stuff that my wife loves and they’ve done more women-oriented shows. She loves The Flight Attendant and she was watching more of the reality stuff. So they think that they can create this thing that appeals to men, appeals to women, appeals to premium, appeals to down market, all in one place. And whether that works, we’ll see.
This excerpt was lightly edited for clarity.
Host: Derek Thompson
Guest: Matt Belloni
Producer: Devon Manze