Craft Worldwide’s Post

The average cost of major ad-free streaming services is rising by almost 25% in a year, as companies like Disney, Peacock, Max, Paramount+, and Apple TV+ raise their prices. In March 2023, 94% of Disney+ subscribers in the US accepted a $3-per-month hike instead of switching to an AVOD plan. 📈 This marks a new phase in streaming platforms, as companies seek profitability after incurring significant losses. They are testing customer loyalty by increasing prices, hoping that it won't lead to cancellations. However, this may result in more people cycling in and out of subscriptions and opting for lower-cost ad-supported options. 📺

🚨 Attention broadcasters! Recent cancellations from a major advertiser have left stations in a financial and operational bind. Is it time to reassess cancellation policies in the broadcasting industry? Let's discuss potential solutions to protect your revenue and airtime. #BroadcastingIndustry #CancellationChallenges 📺🎙️📻 https://hubs.li/Q02stn-y0

Streaming companies will soon run into a wall. In order to make their services profitable, they must increase subscriber numbers and raise sub prices, as well as lower costs. But there are limits to both. For example, after raising prices last year, @DisneyPlus added just 1% more subs in the last quarter y-o-y, and both @Hulu and @ESPNPlus were flat. So there was already consumer price sensitivity. Now @Disney is increasing prices again. This will not exactly boost sub numbers. On the cost side, to stick with the Disney+ example, they cut losses from roughly $1B to $500M - but only 100M came from cutting costs. Running a streaming service is very expensive. What happens when the first publishers just can't make the math work? M&A. --- The average cost of watching a major ad-free streaming service is going up by nearly 25% in about a year, according to a Wall Street Journal analysis https://lnkd.in/da7mPHFw via @WSJ

I believe they can raise prices CONSIDERABLY before the cost exceeds the utility to consumers. If you consider that the all-in monthly cost of what most streaming services are offering would have been in the hundreds of dollars in, say, the year 2000, they have TONS of headroom in terms of raising the price to match the overall consumer utility. In the year 2000, access to that volume of high-quality entertainment (theatrical release movies, "prestige" TV which didn't even exist yet, high-quality libraries such as Disney's, etc) would have cost someone several hundred dollars a month in movie tickets, video rentals (plus late fees), and cable subscriptions. The internet tricked everyone into thinking content can be free or near-free while still being of decent-to-high quality. It can't. These streaming subscription prices are still coming off a base of $0. And you can't compare streaming to pre-streaming basic cable bundles. Basic cable TV content was/is FAR lower-quality than streaming. Even premium cable was a waste of money: the likes of HBO/Showtime would release *maybe* 2-3 first-run movies per month and then rerun them ad nauseum. If this was all economically viable as recently as the 2000s, it will be economically viable again. Consumers are willing to pay for entertainment. The internet doesn't fundamentally change many of the basic moving parts. We just got a bit off-track because the first 25 years of the internet were heavily HEAVILY subsidized by venture capital, private equity, M&A, and major media companies and allowed to operate at a loss.

🤔 Prime Video Ads - perhaps a genius move or a PR disaster? 😲 This was always the next logical step for Amazon, regarding advertising for Prime, and also the real reason Amazon has been pumping millions into quality content is eyeballs for their advertising (and retail business). Investments in the Grand Tour pay back 2m viewers an episode, which is a huge captive audience to target with hyper-targeted ads using OTT video via DSP for example. Offering a high-income audience that is hyper-targeted on streaming TV, with high engagement, is something Netflix, ITV or online press can only dream of.... However, increasing the Prime Video fee £2.99 to avoid these targeted ads from Amazon could be a big PR disaster too....? Certainly, advertisers are hugely interested but traditional media see this as a threat to their ad dollars - it's interesting to note right wing media in the UK are up in arms about this; as the Mail, Express and GB news appear to be running a co-ordinated PR campaign to trash Amazon Prime Video, as a move to stir up a consumer backlash? Could they be running scared of this strategy or do they have a point 🤔 - that Amazon, the most customer service-orientated company on the planet, has scored an own goal? What do you think? #amazon #prime #advertising #ecominsights

Here is a fun nugget. Many thought that the rise of streaming (especially with tighter window times) would negatively impact each other, but what if they were actually economically complimentary?  While the theatrical space took a relatively significant step toward normalcy last year, spending on digital purchases of theatrical titles (electronic sell through and Premium VOD) was up more than 13%, according to UK-based research firm Omdia. In fact, purchases rose more than 30% percent for theatrical titles like Barbie, The Hunger Games: The Ballad of Songbirds and Snakes, Indiana Jones and the Dial of Destiny, Mission Impossible: Dead Reckoning Part 1, Oppenheimer and The Super Mario Bros. Movie. Go figure. Btw, overall disc sales and rentals dropped 25% for the full year so don't expect Netflix to bring them back. https://lnkd.in/gQghmRKb

Interesting news update you bring up! Definitely think that the rise of streaming on demand is becoming the more dominant form of entertainment consumption, but what could this imply for the theatrical distribution business? Will this be a threat that could heavily impact theatrical sales and cinema business? I think it’s definitely something for theatricals in the industry to consider… #theatricaldistribution #theatricalspace #entertainmentnews #entertainmentindustry #entertainmentbusiness #streaming #streamingsales #homeentertainment #streamingbusiness

✅🖥️ WSJ (8/15): “The average cost of watching a major ad-free streaming service is going up by nearly 25% in about a year, according to a Wall Street Journal analysis, as entertainment giants bet that customers will either pay up or switch to their cheaper and more-lucrative ad-supported plans. The recent wave of price increases signals a new phase in the streaming wars. After years of charging bargain-basement prices in pursuit of fast growth, most of the big players face a financial reckoning, with tens of billions of dollars in losses piling up. “Can you raise prices by 30% and not increase churn? That’s the big question,” said Rich Greenfield, an analyst with LightShed Partners.” ⬇️ #streamingtv #ctvadvertising https://lnkd.in/e_YP3sDQ

Michael J. Wolf, featured on Bloomberg TV, addresses the challenges posed by cable contracts for companies like The Walt Disney Company. Despite limitations, the surge in affiliate fees is a noteworthy revenue driver. His insights emphasize that programming is an enduring investment, not merely an expense. How will your business approach content creation and distribution given this information? Read our full report: activate.com/insights #ActivateInsights #ActivateGrowth #ActivateOutlook2024

Netflix recently pulled off a clever advertising move using two #billboards for their upcoming movie, #LEO. They were quite innovative to create a captivating display. And now, they did something similar in #India for their new show called "#Archies". However, the billboard for Archies appears to be only halfway done. It would have been exceptional is Netflix went all out and connected all the straws. But still the illusion was good enough. Have you seen any cool billboards lately? #Bluwave #MarketingInnovation #BrandVisibility #OfflineAdvertising #Billboards #WaterBottles #Netflix