• by Wayne Friedman , Staff Writer, September 21, 2023

For new streaming platforms, the math to success will depend on.... other platforms?

To an extent, this could be true if we look at the most glaring issue that continues to face streamers: content spending.

Veteran media observer and analyst Brian Wieser -- who now writes under the Madison and Wall substack brand -- figures the race to the bottom, or the top, depends on how much competitors push the pace or hang back.

“Media companies don't need to increase spending on content to grow necessarily, “ he writes, “but if they fail to make such increases, they will then depend on others to cut if they want to avoid consumer time-share losses.”

He adds: “A studio/packager who holds the line or increases budgets while others are stable or declining should expect to grow on a relative basis.” And in theory, consumers will follow.

In other words, there will be an overall industry-wide adjustment in consumers' streaming behaviors when it comes to expected new/fresh content.

This is somewhat like the gas station owner who pulls out binoculars to see if a competitor down the street is raising or lowering prices -- all because of demand, or lack of it, from automobile owners.

Drive that idea around the block.

Premium streamers have already been doing much of this -- that is cutting back on production and/or removing some content and selling it to third parties to make some needed cash. 

But it is not clear whether consumers are recognizing these changes. 

Some of that might come with the activity around canceling and then re-signing up to one’s favorite streamers.  Right now there is a mixed picture which shows this “churn” is anywhere from a 5% to 12% monthly rate of departing streamers subscribers depending on the platform.

Currently, Wieser says some of this will be the result of the actors'/writers' strikes. Many believe that both actors and writers will get rate hikes, but the end result will be a lower number of near-term streaming productions -- for TV series and movies.

No matter what streamers do internally, all this will be obscured, at least to an extent. No advertising message will tout less content -- the overall streamers' premise will continue to be “We have thousands of hours of programming. Just take a look.” 

Perhaps some streamers that want to stand out will say to some degree, via on-air TV show promotional/advertising: “We have the most popular/critically acclaimed program.”

How, then, will consumers figure out that less might be more? That if everyone is cutting back, they and premium streaming executives can still reside in a happy place?

For decades, marketers touted that 200 to 300 cable TV networks in one big $75- to $100-a-month bundle was a major reason that consumers should buy in. 

With respect to what is happening today, how has that now turned out for cable network groups now desperate to compete in the streaming world?