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What Lies Ahead for Streaming After Netflix and CNN’s Bad Week?

April has been one of the rockiest months of the Streaming Wars in recent memory, but new strategies are emerging as the tide of the battle turns

Getty Images/Ringer illustration

In terms of output, streaming TV seems to be doing better than ever. Rarely does a week go by without some bingeable popcorn like The Ultimatum sweeping social media. And with spring comes the onset of Emmy season, a condensed sprint to premiere high-profile shows so they’re fresh in the Television Academy’s mind when voters begin casting their ballots in June. This year, contenders include Russian Doll (Netflix), Shining Girls (Apple TV+), Undone (Amazon Prime Video), The Flight Attendant (HBO Max), The Offer (Paramount+), and Under the Banner of Heaven (technically FX, but exclusively on Hulu in the United States). Not every show in contention is backed by a streamer; subscribers can nonetheless choose from a plethora of options that streaming platforms hope will justify the monthly cost.

Zoom out, though, and April has been one of the rockiest months of the Streaming Wars in recent memory. Until now, the story of Hollywood’s pivot to digital has largely been one of growth: growth in subscribers, growth in share prices, growth in the field of competitors. High-profile crashes like Quibi’s were the exception that proved the rule. Streaming services made series about hubristic tech companies that flew too close to the sun; they certainly weren’t the subjects.

Yet observers have long predicted that the proliferation of services, from premium hubs like Apple TV+ to free, ad-supported products like Tubi, would eventually correct itself. That day isn’t quite upon us, but it appears to be closer than ever. Within just a few days, one service announced plans to shutter mere weeks after its launch, while the long-established market leader reported an alarming contraction in its user base, sending its stock price into a tailspin. Meanwhile, the industry continued in its usual contortions, with some smaller developments overshadowed by more dramatic reversals. It’s a lot to take in, so we’ll tackle it one issue at a time.

Netflix Stalls Out

If you’re clicking on a story about streaming, you’ve probably already heard the news about Netflix, or at least know it isn’t good, least of all for its shareholders (many of whom are also its employees). To recap: In its latest quarterly earnings report, the world’s biggest streaming service announced it had lost subscribers for the first time in a decade and forecasts losing millions more in the quarter to come.

A slight dip of 200,000 or so users isn’t the end of the world, especially in light of mitigating circumstances like suspending 700,000 active accounts in Russia as a response to the war with Ukraine. But planning for a major exodus? That’s enough to sink not just Netflix’s stock, which is down by more than 40 percent as of this writing, but also competitors like Disney and Warner Bros. Discovery, though those declines aren’t nearly as dramatic. As for Netflix, it’s lost billions in market value, a plunge that is, to quote co-CEO Reed Hastings, “a bitch.”

Interestingly, Wall Street panicked in spite of some more reassuring data points. Netflix revenue actually increased, thanks to a recent price hike; its churn rate, which represents the proportion of users who cancel the service, remains lower than its competitors; and the company continues to produce massive hits like Bridgerton, whose second season just set a platform record for viewing hours on an English-language TV series. But the streaming boom has partly been predicated on an expectation of continued expansion—and indications that the streaming-native content distributor may be close to its ceiling, especially in mature markets like the United States, are enough to make investors look askance at the assumption that subscription-funded streaming is the future of entertainment.

Netflix has put forward a few strategies for stanching the flow, including a crackdown on password sharing and the potential rollout of a cheaper, ad-supported option (more on that shortly). But that’s not the same thing as a serious look inward at what’s gone wrong. For that, we can look to writers like Vulture’s Joe Adalian, whose Buffering newsletter floats a host of theories that include increased competition and a stubborn commitment to potentially outdated methods like a near-exclusive preference for the binge-style release. It’s hard to pin this particular vibe shift down to any single cause, though they add up to a potentially dramatic realignment.

The Best Things in Life Are Free(-ish)

Hastings’s proposal for an ad-supported Netflix tier signals an openness to abandoning one of the company’s foundational principles, a primary differentiator from its old-fashioned ancestors in linear broadcasting. For one thing, episodes of scripted Netflix series are typically written without formal act breaks to lead into commercials; it’s hard to picture an episode of Ozark abruptly cutting to a promotion for this year’s Toyotathon.

A Netflix with ads is nonetheless in tune with recent trends. Last year, HBO Max launched a $10 monthly plan (a third cheaper than the regular price, which is around $15) that includes ads; outgoing WarnerMedia chief Jason Kilar has been talking the option up in exit interviews, telling Bloomberg that “close to 50 percent” of new subscribers are choosing the less expensive tier. For Hulu, which has long offered an ad-supported option, the substantial majority of subscribers allow advertisers to subsidize their viewing experience.

But subscription-based services opting for advertising is only part of the story. Free, ad-supported TV—abbreviated FAST—is one of the great unsung battles of the Streaming Wars. Services like Tubi, owned by Fox, and Pluto TV, owned by Paramount Global, bring in enormous revenue at a much less substantial cost than Netflix’s multibillion-dollar budget for original programming. Earlier this month, Amazon announced it would rename its FAST offering IMDb TV, rechristening it as Amazon Freevee. The new moniker is admittedly silly, but it’s also much more straightforward than the previous one. The service is free to watch, and it’s owned by Amazon, two facts that were previously easy to miss.

The jokes write themselves: The great streaming revolution has innovated itself back into the business model that supported broadcast TV for decades. Netflix is still a long way off from turning into 1990s-era NBC; still, subscriptions are no longer the sole currency of streaming, nor have they been for a while. It’s time to update our assumptions accordingly.

CNN Bites the Plus

Now that the ink is dry on the merger between WarnerMedia and Discovery into the entity known, quite creatively, as Warner Bros. Discovery, changes are afoot. That’s the only way to make sense of what is, at first glance, a pretty baffling about-face: shuttering the service CNN+ at the end of April, just a month after its launch. However dismal the early ratings, the CNN+ team wasn’t given much of a chance to correct them, instead becoming the Streaming Wars’ first major casualty since Quibi.

Viewed through the lens of the corporate baton-passing, the decision is a little less shocking, if still extreme. CNN+ was initially overseen by a head executive, Kilar, and a network leader, Jeff Zucker, who are no longer in charge; Kilar was pushed out by a spinoff deal forged behind his back, and Zucker was forced to resign after failing to disclose a romantic relationship with another CNN executive. Discovery’s David Zaslav now leads the newly combined conglomerate, and Zucker’s replacement, Chris Licht—most recently executive producer of The Late Show With Stephen Colbert—starts next month. It checks out that Zaslav doesn’t want to burden his new hire with a dead-on-arrival project neither have much stake in.

The demise of CNN+ plays into some of Zaslav’s rhetoric about being “careful” and “judicious” (read: not Netflix) when it comes to spending on streaming. It also forecasts a future in which companies may consolidate their streaming options into a single hub to better maximize its value to subscribers. HBO Max and Discovery+ are already combining into a single super-service; why would Warner Bros. Discovery want a smaller service hanging around as an independent shingle? Doesn’t CNN make more sense as another sub-brand on the HBO Max menu, like Cartoon Network or TCM?

We’ve yet to get word on the fate of CNN+ original programming like chef Alison Roman’s yet-to-air cooking show. It nonetheless seems likely at least some of it will end up on Max. Customers weren’t willing to shell out for even more nonstop news, but maybe they’ll go for it as a side dish to other forms of entertainment.

Sports Waltzes Onto Disney+

Let’s close out with a more lighthearted, though still meaningful, shift. Sports, and especially live sports, have long been streaming’s final frontier. With each passing day, that frontier gets increasingly settled. Peacock partially hosted its second Olympics; Apple recently signed on for the first 12 weeks of Friday Night Baseball. Tim Cook’s kingdom is also reportedly in contention for the NFL’s Sunday Ticket.

Held up against these blockbuster deals, Disney’s decision to internally shuffle Dancing With the Stars from ABC to Disney+ barely registered as news. Frankly, Dancing With the Stars barely registers to most people as sports, but it’s a live competition of athleticism and grace—what else do you call it? Still, the move is a telling indication of how Disney plans to diversify its wholly owned, international streaming service. (Hulu is technically still split with Comcast for another few years, and is available only in the U.S.)

Disney is no stranger to the intersection of streaming and sports, or the importance the latter can have to a fledgling product; its Indian edition, Disney+ Hotstar, features cricket from the Indian Premier League, which helped it gain a foothold on the subcontinent. Dancing With the Stars is more targeted, and speaks to how its parent company wants to expand the reach of Disney+ beyond the families and franchise fandoms who make up its core constituencies.

If you’re tuning in for Marvel or Star Wars or Pixar, chances are you’ve already signed up for Disney+. But Dancing With the Stars caters to an older audience, who Disney hopes it can lure onto streaming and help round out Disney+’s demographics. Like the internal consolidation within Warner Bros. Discovery, the decision goes to show just how much entertainment companies are coming to value four-quadrant appeal. There’s only so far you can get when engaging with only young viewers. Much like Peter Jackson’s Get Back, Dancing With the Stars signals how serious Disney+ is about proving it isn’t just for kids. Let the games begin—or rather, continue.