As the coronavirus and subsequent global shutdown forces film and television production into an unprecedented standstill, streaming services are accelerating their takeover of the industry.
Already on the ropes, movie theater-chains have suspended screenings through at least April. To fill the gap, streaming services are experiencing massive subscriber growth.
Like many others, the entertainment industry is revising its development strategy, which will result in belt-tightening after years of unbridled spending.
According to a WSJ Harris Poll, Americans, on average, spent $37 in March on streaming services, up from $30 for the month prior. For families with children at home, spending has reached $60.
Unsurprisingly, viewership is through the roof, with many households spending an extra four hours a day streaming. Netflix is the biggest winner in this surge, followed by Amazon, Disney+, and Hulu.
Just as Netflix’s subscriber numbers were flattening in the US towards the end of 2019, the company is seeing a massive surge of new subscribers over the last month. However, given the financial insecurity that most are experiencing as a result of the shutdown, this surge is more than likely temporary.
Through January, Disney+ had 28.6 million subscribers, up from 10 million just weeks after it debuted, an impressive start by any metric.
However, since the shutdown, Disney+ has accumulated over 50 million subscribers, which is on pace to shatter its goal of 60 to 90 million subs by 2024.
Disney is by far the best positioned among all competitors trying to catch Netflix, given its highly popular back-catalog, control over Hulu, and the quick rise of its new streaming service.
Hulu, which is now controlled by Disney, will become the home to more adult edgier fare. Disney announced in March that its FX Networks would also produce original shows for Hulu.
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The Unlucky Ones
WarnerMedia, already late to the streaming party, was planning to launch HBO Max in May, highlighting new and old shows alike. Its centerpiece was to be a Friends reunion special, but the show is not ready. Likewise, NBCUniversal is preparing the launch of Peacock in July without substantially new content designed to attract picky subscribers to a seemingly saturated streaming market.
Although both companies have extensive back catalogs of popular film and episodic titles, several of its new shows being prepared for the launch are on hiatus while others have been canceled altogether.
The promotion of both these new services was to be highly-dependent on linear advertising. AT&T’s HBO Max planned to advertise heavily during the NCAA college basketball tournament in March. While NBCUniversal was planning to showcase Peacock during its coverage of the Summer Olympics in Toyko.
Perhaps the biggest loser, unsurprisingly, is Apple TV+. The streaming service’s miserable slate of shows and films failed to excite even the most cultish Apple fans. Now that followups to some of its debut shows are on hold, the service will fall farther behind its rivals.
Comcast’s NBCUniversal and AT&T’s WarnerMedia are racing to reinvent their core media business as consumers cancellations from traditional broadcast and cable television accelerate. For these companies, transitioning customers to their streaming subscriptions has to work.
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This two-monthlong shutdown will forever change the economics of film and television production. Just as the pandemic was the pinprick that burst a 10-year asset bubble, it will act as the major turning point in how projects are developed, packaged, and greenlit.
Moving forward, the industry will likely place less emphasis on high-profile on-screen talent, and more attention on delivering unique material from more diverse sources.
Hopefully, this generational event will significantly reduce the number of sequels, remakes, and comic book movies that have contributed to the decline of moviegoing.