Streaming services! Love them or hate them they are here to stay.
People complain about how streaming is hurting the film industry and the cinema industry.
What streaming services did was replace physical media rentals especially back catalogue movies and classics.
With the advent of broadband internet speeds and smart TVs. films streaming into peoples homes was inevitable.
Netflix was quick to market and did it right.
Netflix changed from a company who rented physical media by sending DVD's to customers through the post via a website to being an online platform to browse a large catalogue of films and TV shows aka "content" this "content" was all made by film and TV companies who would license their "content" to Netflix and Netflix paid the Film & TV companies for having this "Content".
Dare I say it the success of Netflix was actually a revenue stream for the movie studios.
A way of making money post theatrical run.
This situation was deeply unsatisfactory to the men in suits who run hollywood. They were jealous that Netflix was a global hit and had millions of subscribers watching "content" made by Hollywood and Netflix was paying them.
So in a stroke of genius each major studio decided to stop making money from Netflix and decide to sink Millions and Millions and Millions of dollars into developing and launching their own streaming service.
Because why just have money coming in when you could potentially lose the GDP of a developing nation.
The major movie studios in Hollywood are,
Walt Disney Studios / 20th Century Studios
Paramount Pictures
Warner Bros. Pictures
Universal Pictures
Sony Pictures
In November 2019 Walt Disney Studios launched their own streaming service "Disney+" So Disney had not renewed contracts with the likes of netflix so all their back catalog of titles inc Pixar, Star Wars & Marvel all exclusively on their own service and behind a paywall.
Even though Disney could have just done that... Make a streaming service that is a depository for their vast back catalogue and charge $5 a month to access it and it would have been a hit on top of the multi million dollars to develop the platform and App they also decided to spend an additional $500+ million in the first couple of years on origonal content and spend approx $650 million advertising it since 2019. To be fair since it's launch it has grown to the point they now have $8.4 Billion gross a year coming in a year from the platform but I would be interested in how much it costs to have and operate which must be astronomical!
Remember if they licenced out their stuff they would just have money coming in.
In June 2022 Paramount Plus was launched in the UK. It has been available in the US since March 2021. Again Paramount removes its back catalogue from established streaming services and puts it behind their own pay wall. Paramount again will have spent an unbelievable amount of money setting up and launching this and obviously
making their own origonal content for hundreds and hundreds of millions of dollars is a must.
although Paramount are proud to say their subscription base is growing and they boast revenue growth but I think the big revenue growth comes from a price rise more than anything else their gross income from their subscriber base is something like $1.8bn per year but take into account a modern advertising campaign can cost hundreds of millions, Google and Apple take money for having the App, what you have to pay for storage the list goes on and $1.8bn is not cutting it.
Warner Bros. Pictures is the head of loads of companies including Discovery Channel and HBO They launched "HBO MAX" in June 2022 which was then renamed "MAX" Its the same story take on all the overheads and stick your content behind a paywall. Max is a little different since Warner Bros has a massive selection of stuff in addition to Warner Bro movies and HBO series.
They also own CNN, Cartoon Network, Adult Swim, Animal Planet, TBS, TNT & Eurosport and more. We don't have this in the UK we have Discovery+ and Sky's Now TV to access this content. The fact that in America this is what you need to watch The Sopranos, Game of Thrones, John Oliver's Show...the list is vast and it is popular. The year this platform was set up 2022 it made a $2.1bn loss and by the end of 2023 it had broken even then apparently made $100m profit. The future of this platform will depend on what has happened this year.
Safe to say this is not a money spinner.
Universal Pictures are slightly different in their approach to streaming. Universal Pictures are owned by "NBCUniversal" who are a massive cable TV and news network who are famous for NBC and MSNBC news, Saturday Night LIve, The Tonight Show, Late Night with Seth Meyers, Law & Order, The American Office... the list goes on.
NBC operates a catch-up / streaming service called "Peacock" so when I live action film by Universal first appears on streaming it is exclusive on Peacock for a while then it goes on to Prime Video. Universal owns Illumination animation studios so the likes of the Despicable Me / Minions films, Secret Life of Pets, the Sing films and the most recent Mario Brothers film and when their films have finished their theatrical run and have had a period available to rent of buy digitally the films go onto Netflix.
Looking at "The Super Mario Bros. Movie" (2023) it was made for $100m and grossed $1.3bn at the global box office then it made money as a digital rental then it went onto Netflix who will be continuously paying Universal for the privilege of having it.... Dollar Bills Y'all!
Sony Pictures are the other wise company who understood the value of licencing out their films to established streaming services and enjoy having a healthy revenue stream from their back catalog.
They actually licence their films to Disney+/Hulu/FX they also deal with Netflix.
Sony did buy a streaming service but they bought one that already existed and they used their position as a powerhouse in Japanese entertainment to supercharge it Sony purchased "Crunchyroll" in 2021 for $1.2bn that has become the international hub of the Anime community.
Crunchyroll is one of the biggest successes in the streaming industry. Goldman Sachs predicts that by 2028 Crunchyroll will be generating 36% of all of Sony Entertainment groups profits.
Well done Sony!!
A gripe I have is Amazon bought the MGM movie studio in March 2022 so I foolishly thought "Ah MGM's back catalogue of films will now appear on Prime Video making it better value... nope there is a dedicated MGM+ service you have to pay £5 a month for FML!!
Back in the golden age of movie rental you would browse the video shop by looking at New Releases or back catalog which would be split up by genre and displayed alphabetically. This makes sense. What has never been the case has films been organised by movie studios because that does not matter to the vast majority of movie fans.
So the basic concept that a studio could gather their specific catalog of output behind a paywall and "Take on Netflix" is insane!
I have thought about what it may have been like if the movie studios were wiser and stayed friends with Netflix. Studios would be focused on making films of quality that will make them money during their theatrical run. I imagine a system where Netflix could have truly replaced the likes of Blockbuster by having films buy major studios as premium rentals on the app.
So you would pay a monthly subscription but as soon as a film is finished its theatrical run you could click on the movie and pay $5 for a 48 hour rental channeling money back to the studio. BUT NO!
I would go as far as to say the statement.
"Streaming the likes of Netflix has really hurt the cinema business" is not accurate.
"The likes of Netflix and Prime Video made bricks and mortar rental stores such as Blockbuster irrelevant"
what has damaged the cinema business in the movie studios throwing all their eggs into the streaming basket chasing an impossible goal. Letting investment in film suffers due to funds being pumped into streaming projects, making good films and just dumping them onto an under-subscribed streaming service to rot! Even worse shrinking the time window between ending its theatrical run and appearing on a streaming service or even releasing a film DAY AND DATE on streaming and theatrically that is how streaming has damaged the theatrical cinema business.
With streaming replacing the video store to have a wide variety of classic movies from all genres at your fingertips and you don't like adverts your monthly bill could look like this,
Sky Stream - Entertainment & Netflix + Cinema £28
Amazon Prime - £8.99
Disney+ - £10.99
Paramount+ - £6.99
MGM+ - £4.49
subtotal £59.46 a month
In the UK the powers at be expect you to pay a TV licence which is £14.12 p/m
you or your kids may really enjoy anime so
Crunchyroll - £4.99
if you really like Horror
Shudder - £4.99
Total £83.56 a month / £1002.72 a year.
Ok that is an extreme case but you can see how things mount up.
Earlier this year a company called Skydance Media bought Paramount pictures for something like $8bn. So they now own all of Paramount including Paramount+ that is proving to be a bit of a money pit but the story goes "Sundance Media" is run by a guy called David Ellison and his father Larry Ellison owns a big business called Oracle Corporation who are into
Enterprise software, Business software, Cloud computing, Computer hardware & Consulting and apparently Oracle is developing a software solution to change the future of streaming... Apparently! So that will be interesting.
