Major streaming services are all struggling to break out of the red in spite of a record-setting year for subscribers and viewership.
- This year has been hard on streaming services like Disney+, Hulu, Netflix, Paramount+, and HBO Max, which all reported double-digit year-to-date losses, The Wrap reports.
- Streaming became one of the dominant forms of entertainment in 2020 during the COVID pandemic as home entertainment filled a need for entertainment. Now theatrical distribution is slowly beginning to reassert itself with eight billion dollar grossing films this year like Top Gun: Maverick and Jurassic Park: Dominion.
- The major streaming services are closing the year with increased subscriber numbers though—including Netflix (223 million), Disney+ (164 million), HBO Max/Discovery+ (95 million), Paramount+ (46 million), Hulu (47 million), and Peacock (15 million).
Why it’s Important
Streaming has proven to be on shaky ground this year. Streaming services are entering 2023 in the red, struggling to shake off loss leaders, and grasping for any way to increase profitability.
Amazon Prime Video and HBO Max saw two of the largest premieres in television history with the launches of House Of the Dragon (10 million) and The Rings Of Power (25 million) over the summer. Amazon has also been rapidly expanding its content offerings through new creative partnerships, theatrical distribution, and sports partnerships.
Additionally, Netflix is now celebrating having its third series reach over 1 billion hours of streaming—Dahmer, Squid Game, and Stranger Things.
The expansions and record-setting successes have been mitigated by subscriber losses and low profitability. All streaming services saw subscriber growth this year but not by large margins. Disney+ saw the largest growth of any platform in 2022 with 12.1 million new subscribers, while Netflix briefly dropped streamers in the first quarter, but slowly recovered by the third quarter. Disney is facing its own profitability issues though and removed CEO Bob Chapek on November 20.
HBO similarly saw controversy over the summer over its plan to cancel in-development films like Batgirl, canceling several projects and removing a large portion of the HBO Max library as a tax write-off.
Almost all streaming services are considering mitigating profitability losses by raising prices and implementing a lower-tier advertising level of subscription. Speaking at the New York Times Dealbook Summit last Wednesday, Netflix CEO Reed Hastings says he was wrong in his reluctance not to implement ad-supported plans, Variety reports.