The Streaming Climate Changed From Blue Skies To Storm Clouds In 2022 — So What’s The 2023 Forecast? – Deadline

In just a few months’ time, streaming has gone from fountain of youth — a virtual Schwab’s Drug Store where 100-year-old media companies felt like they would be discovered again — to a cash-guzzling headache for both digital natives and newbies alike. .

Even during the pandemic, streaming remained an all-consuming colossus and something of a fever dream. Over a six-month span from late 2019 through 2020, many billions were spent. Apple got into the game after years of dithering dating back to the Steve Jobs era. Disney, WarnerMedia and NBCUniversal also entered the frenzy to catch up with Netflix after spending years contentedly cashing its checks. Discovery+ and the revamped Paramount+ followed a short time later.

This grand pivot would be costly, media giants warned investors, but soon they would have direct relationships with consumers. Fewer intermediaries, like movie theater owners or pay-TV operators haggling over terms. Less ambiguity about the targets of their advertising and programming messages. Finally, the mantra would be reality — entertainment available whenever and however a customer wanted it. Tech players like Roku and Apple, meanwhile, believed original streaming fare would be ideally suited to the infrastructure they have built — especially if awards could be added to the shelf.

This year, though, a funny thing happened on the way to Shangri-La. Netflix fell out of bed, reporting its first subscriber losses in more than a decade, and got off to a rough start in ad-supported streaming and struggled with how to charge subscribers for the long-free perk of password sharing. All streaming operations fell under intense scrutiny and stocks plunged, additionally burdened by a souring global economy. Profits and the ability to sustain them — not just the headlong rush to rack up subscribers — became the new prize.

“Capital intensity has increased significantly,” Morgan Stanley media analyst Ben Swinburne wrote in a recent 2022 recap, “and content asset turnover and returns have fallen.” He expects the net number of subscriber additions in 2023 across all streaming outlets to be roughly half what it was in 2021. “The industry is clearly heading into a new phase,” the analyst added, “one we think will be characterized by 1) cost rationalization, 2) consolidation (of services and/or companies), and 3) outright exits from the DTC business.”

With those sobering thoughts in mind, Deadline is taking a look at eight of the major players in subscription streaming, sizing up their 2022 performance and what challenges lie ahead for next year. Here’s our rundown (in alphabetical order):

Apple TV+

2022 HIGHLIGHTS: A Best Picture Oscar win for Code and an Emmy win for Outstanding Comedy Series for Ted Lasso punctuated a breakout year on the awards front.

2022 LOWLIGHT: Apple TV+ still has a tiny library of licensed content. With subscription cycling becoming more popular, a library of content is key to getting subscribers to stick around.

KEY CHALLENGE FOR 2023: After adding Friday night Major League Baseball games and bidding on NFL rights, can Apple cash in on its sports push with the launch of a sibling streaming offering co-owned and -operated with Major League Soccer?

BIGGEST QUESTION FOR 2023: Will Apple TV+ get more traction than rivals have with a lower-priced tier with advertising, which is said to be on the way soon?

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Disney+

2022 HIGHLIGHTS: Dancing With the Stars‘ move from ABC to Disney+ marked a milestone in streaming, and the service was booming with content from some of the company’s most popular IP, from Star Wars and Marvel to The Santa Clause and National Treasure.

2022 LOWLIGHT: Disney’s direct-to-consumer business, which includes Hulu and ESPN+, lost $4 billion this year, despite adding 12.1 million subscribers during the company’s fiscal fourth quarter.

KEY CHALLENGE FOR 2023: Getting back on solid footing after Bob Chapek’s departure as CEO and the dismantling of the media distribution unit’s centralized streaming structure.

BIGGEST QUESTION FOR 2023: With Chapek out, will Bob Iger remain committed to Disney+ reaching profitability by fiscal 2024 — and at what cost?

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HBO Max

2022 HIGHLIGHTS: The Emmys, which saw HBO and HBO Max win a combined 38 trophies, doubling their 2021 tally.

2022 LOWLIGHT: Cancellations by the new Warner Bros Discovery regime, including in-the-can titles like Batgirl and Minxwhich have drawn backlash internally and in the creative community.

KEY CHALLENGE FOR 2023: The merger of HBO Max with Discovery+, with a delicate rebranding effort, which will likely remove the platinum HBO name.

BIGGEST QUESTION FOR 2023: Can the revamp of DC — perhaps the ultimate remodeling effort embedded within the WBD empire — produce a Marvel-like growth engine for HBO Max (or whatever its successor will be called)?

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Hulu

2022 HIGHLIGHTS: With original series like Dopesick and Only Murders in the Building clicking and the Hulu + Live TV bundle gaining ground, the total subscriber base grew 8% compared to 2021, reaching 47.2 million.

2022 LOWLIGHT: While Hulu was a pioneer when it launched, it has been looking long in the tooth lately from a product perspective. It’s almost 2023 — can someone at least give that user interface a fresh coat of paint? Even Prime Video in ’22 finally overhauled its long-wonky home screen, leaving Hulu as an industry laggard.

KEY CHALLENGE FOR 2023: With Iger back at the controls at Disney, the task for Hulu is to determine what the 15-year-old streamer wants to be when he grows up. It has been in a limbo state pending the early 2024 window for Disney to buy out Comcast’s 33% stake.

BIGGEST QUESTION FOR 2023: With the floor for the Comcast buyout set at $27.5 billion (and likely higher, depending on the assessment of an independent party), will Disney pull the trigger? And will it look to consolidate it within Disney+, as many insiders have indicated?

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Netflix

2022 HIGHLIGHTS: Massive viewership for series like Wednesday and Dahmer and event films like The Gray Man and Glass Onion: A Knives Out Mystery.

2022 LOWLIGHT: The jarring early months of the year, with 70% of market value instantly erased by subscriber losses and the haphazard announcement of a decision to reverse course and accept advertising.

KEY CHALLENGES FOR 2023: Gaining traction with the slow-starting $7-a-month ad-supported subscription tier; getting customers to pay extra to share their passwords; breaking through in video games.

BIGGEST QUESTIONS FOR 2023: Will rivals narrow the gap? And will the company go against its stated aversion to theatrical exhibitions and live sports, just as it reversed itself on advertising?

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Paramount+

2022 HIGHLIGHTS: The release of 1923the Yellowstone prequel series led by Harrison Ford and Helen Mirren, two weeks before the end of the year. The premiere episode smashed Paramount+ viewing records and signaled a victory for the streamer’s original content.

2022 LOWLIGHT: Investment in streaming drove down income for parent company Paramount Global, prompting execs to eye “meaningful and sizeable” cost cuts going into the new year.

KEY CHALLENGE FOR 2023: Balancing streaming with linear TV — a dilemma for all major media players, but a particular one at the home of CBS, MTV, Showtime and a host of other network brands.

BIGGEST QUESTION FOR 2023: Will Paramount Global be able to cut costs without sacrificing the investment in original content?

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Peacock

2022 HIGHLIGHTS: World Cup soccer bringing giant crowds in the door for Telemundo’s coverage.

2022 HIGHLIGHTS: The abrupt shift of soap opera Days of Our Lives from NBC; day-and-date streaming of Halloween Ends in October at the same time it debuted in theaters, a pandemic-y move that likely shaved millions from its opening-weekend box office.

KEY CHALLENGE FOR 2023: Growing subscriber numbers and justifying projected increases in content spending. Peacock came into the end of the year with just 18 million subscribers – although, in fairness, the tally has grown noticeably in the past year as the company’s strategic emphasis moved from the free basic tier to premium subscriptions.

BIGGEST QUESTION FOR 2023: Could parent Comcast look to level up via a joint venture (as it has with Paramount Global in Europe) or some other form of M&A?

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Prime Video

2022 HIGHLIGHTS: Originals and live sports, headlined by gigantic viewership for The Lord of the Rings: The Rings of Power and the debut of exclusive streams of the NFL Thursday Night Football.

2022 LOWLIGHT: The news that Jeff Blackburn, a 25-year company veteran and the architect of Amazon’s streaming video strategy, is retiring in January.

KEY CHALLENGE FOR 2023: Blackburn’s departure will prompt some executive shuffling at a time when the company is already grappling with the integration of MGM.

BIGGEST QUESTION FOR 2023: How to follow The Rings of Power with another event series.

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