Bubble bursting and bundles
March 27, 2023
Everyone knows the old fable about the Emperor and his lack of clothing. One person eventually calls out his nakedness and, eventually, everyone agrees; the collective illusion, the group think, is broken. The first truth-teller has to be brave, or have nothing to lose. But, in some ways, the most important figure is the second caller, the first one to agree and support the truth that everyone can see but no one wants to articulate.
Step forward Casey Bloys, head of HBO Max. At the recent Series Mania in France, he essentially agreed with James Dolan of AMC: global streaming is not working. In a slightly more forensic analysis, Bloys said streaming was ‘right in the middle’ of its correction and, that correction was akin to the bursting of the dotcom bubble in 2000-1.
Of these two points, the first seems optimistic as it implies the ‘correction’ is already half-way through. It seems to me to have barely begun. By the time it ends we may have only half the global streamers we have now. The second seems pessimistic; the dotcom bubble was an existential collapse of a massively over-hyped sector that wiped billions off whole markets and cut tens of thousands of jobs.
I’m sure from inside the streaming bubble the ground shaking seems apocalyptic. But to the world at large, it will be a ‘small earthquake, not many dead’ as we cynically say in the news business. This will be particularly so as, eventually, to the consumer, it will seem like a return to the status quo ante.
The shift to DTC was like the diverting of a river. It was a big undertaking that many were reluctant to get into – they were doing just fine downstream already. But, there was an uneasy recognition the old river was under pressure, the waterflow had to be shared with too many others – the network and service providers – and, anyway, what if someone else diverted the river and everyone switched to them for their H2O supply?
Netflix, of course, was the innovative civil engineer who cut a new riverbed. Then it was just when, not if, everyone had to make a DTC play. The surprise is that some – those oh so comfortable with their provider bundle deals and scared of cannibalisation – took so long to take the plunge.
Now there are too many streamers chasing too few willing consumers in an economic squeeze. And they are trapped in a model where expensive content can only be exploited, effectively, once – and sometimes by buyers who sign up for only a week or less.
Part of the answer – which is also want consumers want – will be to make more content more available in more places, so a market place for content between and among the streamers. Consolidation will also play a part. And so will ‘bundling’ of streamers, maybe of genres, maybe of individual content, and all with a UI that lets viewers find what they want when they want (and want to pay for it). Massive technological, rights and business rules breakthrough? Kind of. But also, kind of, the status quo ante.