The streaming wars to come

Netflix vs. Disney vs. everyone else

After years of speculation and hype, major players in Hollywood and Silicon Valley are getting ready to challenge Netflix.

It’s only been a few months since Apple launched TV+, followed quickly by Disney launching Disney+. And there’s more to come this year, with AT&T-owned WarnerMedia preparing to release HBO Max, while NBCUniversal does the same with Peacock.

Even before they’re available to subscribers, these new offerings are shaking up the status quo: As part of their preparation, Hollywood studios are consolidating, and they’re reclaiming key titles like “Friends” and “The Office” from rival platforms.

Netflix, in turn, has been preparing for a world where its old content partners are either unwilling to license key titles, or charging a much higher price when they do — hence the service’s seemingly endless flood of original content, and its exclusive contracts, worth hundreds of millions of dollars, with big-name creators.

Studios don’t have much of a choice here: with declining box office at U.S. movie theaters and declining ratings for traditional TV, audiences are shifting and Hollywood must move with it, or be left behind.

That doesn’t necessarily mean that every studio needs to start a Netflix competitor; Paramount, for example, has actually signed a multi-picture deal with Netflix. But for these large conglomerates, as investor Matthew Ball explains, content functions less and less as a business and revenue source on its own, and more and more as a cog in a larger strategy, whether that’s driving more Prime subscriptions for Amazon or wireless subscriptions for WarnerMedia’s new owner AT&T.

So becoming a simple producer of content that gets sold to Netflix wouldn’t just leave these companies vulnerable. It also fails to serve their larger goals.

What’s less clear is whether these corporations have translated their business needs into a clear message for consumers. The apparent difficulties around simply naming the new services — with the clunky placeholder references to “untitled WarnerMedia streaming service” and “untitled NBCUniversal streaming service” giving way to the equally uninspiring HBO Max and Peacock — suggests that they have not.

And just as marketing alone will no longer bring an audience to theaters on opening weekend, these companies cannot simply will a subscriber base into existence without a value proposition that sets them apart from other services.

Add to that the much-discussed risk of “subscription fatigue,” which may be making the leap from headlines to reality. Yes, most of us feel like we need a Netflix subscription, but what about Disney+, TV+, HBO Max and Peacock — not to mention Prime Video, Hulu, ESPN+ and CBS All Access? And what about niche services like the Criterion Channel and Shudder?

Streaming providers know that there’s a challenge here, and they’re trying to appeal to jaded to consumers by setting their prices as low as possible — free, in some cases. But the competition isn’t just for dollars. It’s for consumer attention, which is becoming more and more scarce. (Netflix CEO Reed Hastings memorably remarked that one of the service’s biggest competitors is sleep.)

To be clear, there’s room for more than just one or two winners: technical hiccups aside, Disney+ appears to have had a spectacularly successful launch, with more than 10 million subscribers shortly after launch (a number boosted by free subscriptions offered through our corporate parent Verizon). And perhaps even more impressive, Google said “Disney+” was the biggest search trend of the past year in the United States.

But Disney+ has some unique advantages, like the studio’s current dominance of the movie business and its widely recognized consumer brand. Maybe this is just my personal indifference to old sitcoms speaking, but it’s hard to believe that “Friends” alone will be a similar draw.

So it could be a brutal battle for third place. And for now, everyone seems to be pursuing a similar playbook, combining the costly purchase of key older titles with aggressive spending on original content — though only original in some senses, since these are increasingly remakes and reboots based on existing intellectual property. And if there’s a big star attached, all the better.

Even Quibi, the short-form video service from Jeffrey Katzenberg and Meg Whitman, seems to be relying on familiar names and familiar formats.

In that sense, our streaming future may not look that different from our present or the cable TV of the pastNor is that entirely a bad thing. By all accounts, it’s a boom time for writers, directors and other creative types, and we should be particularly grateful to Netflix for backing big swings like Martin Scorsese’s “Irishman” — the kind of risky, ambitious drama that studios seem increasingly unwilling to spend serious money on.

Still, there’s an inescapable sense that the streaming wars are turning into a contest between lumbering dinosaurs. The opportunity that remains may be for small, nimble mammals — the ones that find ways to reinvent the TV and movies that we love, rather than simply trying to repackage old ideas for a new distribution channel.