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Streaming has overtaken traditional means of consuming TV, both in hours watched and interest from audiences. But as streaming services hunt for advertising revenue, the lines between TV and streaming are blurring. Chris Sutcliffe rounds up the year in broadcast and TV as part of our Media Moments 2022 report.
Streaming now accounts for the majority of time spent with television – in the US, at least. Streamed content across platforms including Netflix, Disney+, Hulu etc accounted for over a third of all viewing (34.8%) beating cable (34.4%) and broadcast (21.6%).
That transition has been a long time coming, but has felt inevitable for the past few years. The sheer scale of investment from platforms like Disney+ has resulted in some of the most talked-about entertainment of the year – and while the pandemic-led wave of sign-ups has peaked, there is still growth to be had in streaming.
A competitive market
That isn’t to say that launching a subscription streaming platform is a guaranteed win. Investors were spooked early in the year by slowing sign-ups and flighty, platform agnostic viewers. Also in the US, CNN+ was cancelled a mere month after launch, the fall out from which saw longtime network star Brian Stelter leaving the cable network.
And even the largest streaming services are having to adapt as competition within the space becomes ever more fierce. Netflix, for example, lost 200,000 subscribers in the first 3 months of this year. As a result, shares in the company dropped 65% and wiped $70 billion off their market cap.
Netflix, crucially, was the earliest proof point for the SVOD model for entertainment, but throughout the course of the year has been refining its advertising-led alternative for launch in late 2022. It is both a revenue and audience play for Netflix, and an admission that it is no longer the only game in town for subscription TV and films. It did, however, add a significant number of subscribers towards the end of the year, outperforming expectations.
Like Amazon Prime Video’s partner channels, the ad-supported model is not wholly free to access. Instead, Netflix Basic costs $6.99. It was seen as an attempt to get ahead of the launch of Disney+ Basic, which will cost $7.99 a month, the same price as its current cheapest plan. But the ad-free version will be bumped up to $10.99 a month – creating price parity with Hulu.
At the same time, the amount the companies spend on creating original entertainment – still seen as the key differentiator by consumers – is approaching unsustainability. Even the coffers of Disney, which is making the most of its acquisitions when it comes creating Originals, do not run infinitely deep.
For the mainstream broadcasters, the quandary lies in the saturation of the streaming space, but also their need to retain the most valuable content in the face of lavish displays of acquisition from streaming platforms looking for differentiators. Sports content, and live ‘event TV’ on linear platforms remain the crown jewels for cable and satellite companies – but even those are subject to acquisitions from SVOD platforms. Amazon in particular is on a rampage when it comes to acquiring exclusive or shared streaming rights – and the inexorable rise of CTV has enabled them to compete directly with traditional broadcasters.
Public service broadcasting under threat
Meanwhile in the UK, public service broadcasting has been under very specific strictures and threats. Channel 4, with its unique ownership structure, has been fighting a rearguard action against the Conservative government and its threats of privatisation, attempting to demonstrate its viability. Despite repeated assertions of support from media and marketing industry bodies, the UK government pushed ahead with plans to sell the broadcaster off.
Its justification was that the channel was financially unviable in the age of streaming (apparently unaware of the severe financial pressures upon streaming services), and needed to be modernised. Channel 4 bosses argued that this would impact its ability to produce public service journalism – which is a net cost to produce – and ultimately was reportedly looking for a trust to purchase the channel and its subsidiaries.
The situation was apparently rendered moot by the revolving door of leadership within the Conservative party, however. In November it was reported that the (at time of writing) Prime Minister Rishi Sunak was minded to drop the privatisation.
Meanwhile, the unviability of new ad-supported rolling news channels was proven by the relative failures of both GB News (now in its second year) and the News UK-led TalkTV. While the latter had a (mostly) lower cost-base due to being an extension of the existing TalkRadio stations, both have struggled to find audiences and revenue.
In August Discovery pulled out of GB News, causing the channel to scramble to find £60 million in new funding. Aside from some notable exceptions, the channel has also failed to find much of an audience for its shows, with its revolving cast of right wing hosts testament to its struggle. Meanwhile, TalkTV somehow contrived to fare even worse in the ratings, frequently recording no viewers and with its flagship Piers Morgan show failing to crack 20,000 viewers on multiple occasions.
All told, 2022 has seen broadcasters grappling with increased competition from one another and from their streaming counterparts. With the fight for subscription and advertising revenue now well underway, the need for broadcasters to deliver quality content as a point of differentiation has never been more apparent.
This chapter is an extract from our Media Moments 2022 report, sponsored by Poool and published in partnership with What’s New in Publishing. To read the full report including case studies, key facts and more, please fill in the form below:
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