Streaming Wars | Who’s Winning, Losing, and Sharing Passwords ?Netflix Is Laughing, Cable Is Crying, and Amazon Is Sneaking Up
Highlights for Today
- Trends and Market Share
- Disney: Streaming Profits on the Rise
- Comcast: Cable Restructuring Underway
- Warner Bros : Box Office Challenges
- Paramount: Streaming Growth Amidst Challenges
In the Battle for Loyalty, One Fact Stands Out: Netflix vs the Rest
1. Trends and Market Share
Platforms like YouTube Premium, Amazon Prime, and Apple TV+ do not report quarterly numbers. Additionally, Disney+ Hotstar is excluded due to its planned merger with Reliance in 2025.
Streaming continues to replace traditional linear TV, benefiting all players. Nielsen reports streaming comprised 41% of US TV time in September 2024, a 3.5-point increase year-over-year, primarily at Cable’s expense.
Key Trends to Watch
-Password-Sharing Crackdown: Following Netflix’s success, Disney introduced paid sharing in the US in late September, with effects expected to emerge in Q4. Max is also gearing up for this initiative.
-Amazon Prime’s Growing Presence:CEO Andy Jassy revealed that Prime Video attracts over 200 million global viewers monthly. Combining exclusive content, live sports, and e-commerce integration, Amazon’s ecosystem presents a credible challenge to Netflix.
-YouTube’s Dominance in Living Rooms: YouTube accounts for over 25% of US streaming TV time (excluding YouTube TV) and continues to grow. Alphabet disclosed that YouTube’s ads and subscriptions brought in $50 billion in revenue over the last 12 months, surpassing Netflix’s $38 billion.
-Subscriber Trends: Tentpole events, like the Olympics for Peacock or hit series like House of the Dragon for Max, drove sign-ups. However, retention remains a challenge for all but Netflix.
2. Disney: Streaming Profits Rise
Disney’s fiscal year ends in September, with Q3 FY24 covering the June quarter.
-Streaming Profits:Disney’s direct2consumer (DTC) segment, which includes Disney+, Hulu, and ESPN+, posted its second consecutive profitable quarter, generating $321 million in operating income. Core Disney+ subscribers rose by 4.4 million, reaching 123 million, driven by ad-supported tiers.
-Box Office Wins: Hits like Inside Out 2 and Deadpool & Wolverine powered $316 million in studio profits. Disney became the first studio to surpass $4 billion in global box office revenue in 2024.
- Challenges in Parks: Parks and Experiences revenue dropped 6% to $1.7 billion, impacted by hurricanes, rising costs, and competition from the Paris Olympics. Domestic attendance held steady, while international parks struggled.
- Linear TV Decline: Revenue fell 6%, with profits plunging 38% to $498 million as cord-cutting and reduced ad sales weighed heavily. Disney plans to integrate streaming and linear TV rather than divest assets.
- Optimistic Outlook: Disney expects earnings growth in FY25 (high single digits) and double digits in FY26 and FY27. Blockbusters like Moana2 and Mufasa:The Lion King are anticipated to maintain momentum.
Takeaway: Disney’s Q4 highlighted strides in its streaming turnaround, buoyed by box office wins. However, the decline in linear TV underscores the challenges of transitioning in a shifting media landscape. Strong content and a focus on profitability position Disney for success under Bob Iger’s leadership.
3.Comcast: Cable Restructuring
-Olympics Drive Growth:The Paris Olympics boosted NBCUniversal’s revenue by 37%, generating $1.2 billion in advertising and adding 3 million Peacock subscribers, which now total 36 million.
-Streaming Expansion: Peacock’s revenue rose 82% year-over-year to $1.5 billion, with losses narrowing to $436 million from $565 million last year.
-Cable Struggles: Cord-cutting led to a loss of 365,000 cable TV subscribers, with video segment revenue down 6.2%. Comcast is exploring a spinoff of cable networks like Bravo and CNBC to prioritize growth areas.
-Theme Parks Slow: Theme park revenue dipped 5% to $2.3 billion as domestic attendance normalized post-COVID.
-Broadband Trends:Despite losing 87,000 broadband customers, revenue increased 3%, with higher average revenue per user.
Takeaway:Comcast’s Q3 reflected both opportunities and challenges. While the Olympics showcased its media strength, declines in cable TV and theme parks persist. Streamlining through a cable spinoff could sharpen its focus, but sustaining growth in Peacock and broadband remains critical.
4.Warner Bruh : Box Office Challenges
-Streaming Growth:Max gained 7.2 million subscribers, reaching 110.5 million globally, supported by international expansion and hits like *House of the Dragon*. Streaming revenue rose 9%, marking Warner’s first profit since 2022.
-Box Office Struggles:Studio revenue declined 17%, with theatrical revenue falling 40% due to a weaker film slate (*Beetlejuice Beetlejuice* and *Twisters* compared to last year’s *Barbie*). Video game revenue dropped 31%.
-Mixed Network Results:Network revenue grew 3% from the Olympics and *Shark Week*, but advertising revenue fell 13%. The $9.1 billion NBA impairment from Q2 continues to loom.
-Debt and Cash Flow Issues:** Free cash flow dropped 69% to $632 million, with $41 billion in debt. Warner renewed its Charter Communications deal to bolster stability.
-CEO’s Confidence:David Zaslav emphasized Max’s momentum, projecting $1 billion in streaming profits by 2025 and hinting at password-sharing monetization.
Takeaway:Warner’s Q3 highlighted streaming success but underscored its dependence on Max as traditional film and TV segments falter. Balancing debt, declining cash flow, and expanding streaming profitability will be key to its stability.
5.Paramount: Streaming Growth
-Streaming Success:Paramount+ gained 3.5 million subscribers, reaching 72 million, thanks to sports like the NFL and UEFA and shows like *Tulsa King*. The streaming unit achieved a $49 million operating income, its second consecutive profitable quarter.
-TV and Film Challenges:TV revenue fell 6% due to lower ad sales and declining cable subscribers. The film division saw revenue plummet 34%, with theatrical revenue dropping 71%.
-Merger Progress:Paramount’s merger with Skydance Media is on track for early 2025, following the exploration of 12 potential bidders.
-Cost-Cutting:Paramount has completed 90% of its $500 million cost reduction initiative, resulting in layoffs and asset write-downs.
-Strategic Shift:Paramount is seeking a streaming joint-venture partner to better compete with Netflix and Disney while managing cable TV’s decline.
Takeaway: Paramount’s streaming gains are encouraging, but traditional TV and film struggles persist. The Skydance merger offers a potential transformation, though stabilizing legacy businesses remains a significant hurdle.
