Every day, the streaming landscape looks more and more like the beast it sought to kill: cable.
The looming talk of platform bundling comes as major streamers offer ad-supported plans, limit password sharing and shift toward live sports coverage. The goal of exponential subscriber growth, fueled by pandemic lockdowns, has changed. Wall Street wants profits.
Perhaps the key to achieving this is depth, not breadth.
Last year, many streaming services began shrinking their once-robust content libraries in order to pay lower licensing fees. (Streamers must pay to license even their own movies and TV shows, like when NBC paid more than $500 million to buy the rights to “The Office,” an NBC show, in 2019.)
Faced with profit pressures and increasing competition for viewers, streamers have moved to remove content to avoid residual payments and licensing fees. This dynamic has divided major streaming companies into two camps: buyers and sellers.
On one side is Netflix, Amazon And Apple – companies that agnostically license content from other studios to bolster their streaming libraries. Then there is Disney, Universal, Discovery Warner Bros. And Primordialwho rely on decades of existing content to develop their own services and also generate capital by auctioning it off to the highest bidder.
“Brands that acquire these titles are thinking about how to operate more profitably by not creating things but buying licenses,” said Stephanie Fried, chief marketing officer at Fandom, the world’s largest platform for fans of entertainment.
Sellers get money, while buyers get content that has a proven track record of reliability and consumer value. This is especially important for Netflix, which is a relative newcomer to Hollywood and therefore has fewer long-running and binge-watching series. Just look at how NBC’s “Suits” took off on the service last year.
Notably, Netflix is already profitable. Amazon and Apple have said they view streaming as a complement to their overall businesses, not an essential part of them. The other major streaming players are still working towards profitability.
Shrinking content libraries naturally imply a need for differentiation.
The initial flowering of new platforms over the past 15 years has seen most entrants take an “all things to all people” approach, trying to become the only streaming service you’d ever need. This meant that aside from the user interface, most streaming services started to look the same over time.
Fried said this lack of distinction could ultimately be negative as the landscape stretches. She suggested streamers look at the type of content their subscribers consume and choose complementary shows and movies that haven’t yet been licensed.
This model has worked well for smaller streaming services like BritBox, which offers a wide range of British dramas, mysteries and period pieces; and Shudder, focused on the horror genre.
Netflix, for example, which found success thanks to nostalgic sitcoms like “Friends” and “The Office,” could add similar shows like “Fairly Odd Parents” and “Hey Arnold” from Nickelodeon and Paramount, “Boy Meets World ” and Disney’s “Hey Arnold.” American Dad” as well as NBC-owned “Saved by the Bell,” according to Fandom data.
Fandom, which hosts more than 50 million wiki pages on entertainment properties from television, film, gaming, comics and more, has a “very good sense of the overlap between all of these walled gardens,” a Fried said.
Original shows on Apple TV+ like “Severance,” “Defending Jacob,” “Home Before Dark,” and “Servant” have captivated and frightened viewers. This type of dark investigative thriller centered around character-driven storytelling would pair well with Warner Bros.’ “The Leftovers.” Discovery, Netflix’s “Haunting of Hill House” and early seasons of Disney-owned “Twin Peaks,” Fried said. .
On Amazon Prime Video, subscribers have opted for action-packed shows like “The Boys,” “Jack Ryan,” “Reacher” and “Invincible,” as well as high-fantasy series “The Rings of Power” and “Wheel of Time.” ” Fandom data suggests that shows like Netflix’s “Jupiter’s Legacy,” Warner Bros. Discovery’s “My Adventures with Superman,” Paramount’s “Mayor of Kingstown” and Disney’s “The Americans” would appeal more to the streamer’s audience.
Likewise, Fandom data could tell streamers what types of shows they should invest in when looking to create new products.
On Disney+, family entertainment is essential. Fried noted that Disney’s best opportunity to differentiate itself is to double down on its efforts to be the leader in content for kids and families. Disney-owned Hulu, meanwhile, has found success with 30-minute sitcoms and “feel good” prestige dramas, according to Fandom data. NBC’s “Parks and Recreation” and the ’90s version of “Fresh Prince of Bel-Air” alongside Paramount’s “The Nanny” could serve Hulu’s audience well, according to Fandom, along with “Queen’s Gambit” and “Black Mirror” from Netflix and the BBC show “Orphan Black”.
Universal’s Peacock is all about crime dramas and medical series, and Paramount+ is the perfect place for viewers to get their sci-fi fix. At Warner Bros. High-quality prestige shows have long been HBO’s bread and butter, and high-fantasy programs like “Game of Thrones” and “The Last of Us” have attracted younger audiences.
To do well and double down in certain segments requires keeping your viewers longer, Fried said: “When they think about cutting your service, it’s like, ‘I can’t, because they have all my type X emissions.”
Disclosure: Peacock is the streaming service of NBCUniversal, the parent company of CNBC.
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