It also raises an interesting question: Can streaming even work as a business model? And it’s a situation made worse by the WGA and SAG-AFTRA strikes, which closed the pipeline for TV shows and films. It’s a dire situation, particularly with Wall Street no longer valuing streaming companies as tech giants. And some, like Paramount+ and Peacock, have yet to see their losses peak. Only Netflix reported a profit: $6.5 billion. Discovery and Paramount lost a combined $10 billion on their streaming services in 2022, according to a review of their annual reports. The result has been tens of billions of dollars flowing into streaming content and away from linear TV … and massive losses for the legacy media companies that entered the space. In the aftermath of that debut in 2019, the floodgates opened, with NBCUniversal introducing Peacock and the arrival of Paramount+ and HBO Max (now Max). Netflix’s success panicked Disney into announcing in 2017 that it would pull all its content from Netflix and launch what would become Disney+. Its stock price, which opened 2017 at about $130 per share, would soar to more than $360 in 2018 as Wall Street began valuing the company as a tech platform, giving it a multiple rivaling the likes of Google and Facebook. Yes, Netflix had been serving original content for a decade before that, but in 2017 its streaming business kicked into high gear, with annual net income jumping from $186 million to $559 million (it would double again to $1.2 billion in 2018). The so-called “streaming wars” really trace their origin to a few fateful months in 20. There’s just one problem: The streaming battles took very lucrative entertainment giants and made their rich profits vanish faster than CNN+. And the drive for scale means that streamers have been available at a bargain price, with the ability to cancel or resubscribe at will. The fierce competition between services means more choices than ever. Consumers can watch what they want whenever they want. Image Credit: Peter Kramer/Peacock/NBCU Photo Bank via Getty Images In the meantime, however, the industry must still grapple with five crises the strikes might have overshadowed but certainly did not solve. I think we’re going to see over the next couple of years, hopefully, more productivity and more selectivity, and in some ways, I think it’s a good thing.” “Writers are, producers are, and studio executives are. “People are hungrier now,” says producer Todd Black. For some creators, more guardrails and feedback will be welcome. Post-strike, expect companies to be pickier about what they make and talent and financiers to be more closely aligned on fiscal responsibility and quality. Whether it’s a big movie or TV show or a small one, we have to make it good.” “There needs to be more of a focus on quality,” says Avatar producer Jon Landau. “Where was the incentive to stay on budget or make something great?” asks an agency source. It’s a system, many industry sources say, that led to a lot of crap. Post-strike Hollywood also is likely to transition from what has been a strange era in the entertainment business, one when success was often divorced from compensation, thanks to the streaming formula of big up-front paydays without the prospect of performance-based rewards - or even information about how a show or film did on a platform. For the working-class writer, director, producer, you’re going to see a contraction.” “This business has now gone through a pandemic, a dual strike and an economic downturn, and the companies have sobered up,” says one agency executive. The new, post-strike Hollywood is going to be a much leaner one. But that heyday has officially ended, thanks to unsexy factors like high interest rates and industry consolidation, and the strikes gave studios cover to drop their unwanted deals and trim their budgets.
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