32 (Continued from Page 30) October 2023 On-Demand Media the reduced revenue from cable. Cable operators (such as Spectrum) countered with their own demands to have cable offer the studios streaming ad-supported services. Thus, they are returning in a big way to restore their middleman status — something that the studios have, for years, plotted to eliminate. Along the way, something broke down in the C-suites, otherwise so many blunders cannot be explained. First, studios sold their valuable reruns to Netflix, enabling the streaming service to grow into a global giant. At the same time, U.S. syndication started dying when station groups began buying local stations because they were generating lots of cash. In order to increase profits they triggered cost reductions that affected programming, causing lower ratings. Then came the studios’ cost-intensive money-losing streaming services that were supposed to eliminate the middlemen by weakening linear TV, which accelerated cord-cutting. At this point the studios were losing money on streaming while inducing reduction of revenue from their linear services. The financial burden was ultimately put on the shoulders of the creative community, which erupted in strikes that brought content production to a halt. Moving on to the streaming platform model, which is presented as an alternative to broadcast television, it has an inefficient business model, a high, capital-intensive structure, and is prone to piracy. Because of this, plan B would be to move streaming into live linear TV and preserve the “mass media” business model. After all, consumers don’t care how content is received as long it is easily available and for free: It is a matter of transport. If one sees linear TV as a broadcast media, yes it is going to die. If, on the other hand, one sees linear as a broadband medium, it is going to survive. Recently, the U.K.’s BBC, ITV, Channel 4, and Channel 5 have decided to add broadband services to their broadcasts, so that viewers can watch live TV via the Internet. According to some analysts, U.S. households average four monthly streaming subscriptions, which translate to over $63 per month for the top-priced four tier, and $40 per month for the bottom four. But the two-tier strategy of the top-priced streamers is now to sell bundles at a discount, and to push more subs toward their ad-supported services, which cost much less (about 50 percent less), and generate more money per user than their adfree versions. If it can be of any consolation, uncertainty doesn’t only reign among U.S. entertainment companies and cable systems. Car manufacturers (that are also hit by workers’ strikes) are losing billions with their electric vehicles while energy experts are still betting on hydrogen fuel cars. Then there are airlines (and Delta is the latest entrant) that are rewarding people who don’t fly with a business model based on ancillary spending like hotel accommodations and credit card charges. The rewards will go towards flying-related perks, but it is unclear how these people will actually be benefitting since they’re expected to be infrequent flyers. So, what is generally described as “a time of dramatic change in the media industry” could actually be a passing malaise in the C-suites, which could very well just be a sign of the times. But, to paraphrase the 1975 Woody Allen movie Love and Death, “If God is testing us, why isn’t He giving a written [test]?” (By Dom Serafini) InterContinental Miami January 16-18, 2024 NORTH AMERICA’S GLOBAL CONTENT MARKETPLACE Exhibitors include: The industry’s first market of the year will bring together the most important buyers and sellers of projects in development and catalogue programming as well as decision-makers from the entire media ecosystem spanning content development, licensing, and platform distribution. Speakers include: PROPEL YOUR BUSINESS FORWARD AND REGISTER NOW AT THE BEST RATE Pavillions: Platinum: Gold: Silver: Matthew Ball Industry Expert, Producer Epyllion CEO Izzet Pinto Founder and CEO Global Agency Fernando Szew CEO FOX Entertainment Global MarVista Entertainment Chris M. Williams Founder and CEO pocket.watch
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