Streamed vs. traditional TV: the shifting sands of Hollywood

The global rise of streaming

The entertainment industry has witnessed unprecedented growth over the past two decades, thanks to the advent of streaming. Platforms like Netflix, Amazon, and Disney+ have redefined how audiences consume content, enabling global day-and-date releases of blockbuster shows such as “House of the Dragon,” Stranger Things, and Squid Game.

The convenience of on-demand content has created an expansive playing field, allowing sensational series to captivate viewers worldwide instantaneously.

Hollywood’s internal turbulence

Amid this golden age of content, Hollywood has been grappling with persistent turmoil. The industry’s structural changes began even before the pandemic, but COVID-19 and subsequent labor strikes have exacerbated issues. Despite a booming entertainment market, Hollywood struggles to balance traditional revenue streams with the demands and profitability challenges of streaming.

The new revenue paradigm

The success of streaming platforms has upended traditional profit models. TV shows and movies that once thrived on advertising and syndication now face a complex marketplace where only the giants can thrive. Major studios and legacy media companies find it increasingly challenging to maintain profitability.

Streaming services have democratized access to quality content, but at a significant cost. The ease with which audiences can binge-watch their favorite series has led to a fragmented market with heightened competition, disrupting long-standing financial models.

The unforgiving world of streaming

The streaming landscape hasn’t been kind to every player. While giants like Netflix and Disney have carved out successful niches, others lag behind. Paramount Global’s arduous sale process exemplifies the difficulties smaller entities face in this cutthroat environment. As the streaming race intensifies, only those with deep pockets and vast content libraries can weather the storm.

In the U.S., traditional linear cable TV endures a severe drought of viewers and investment. While the focus shifts to linear sports, this content lacks the universal appeal of iconic shows like “ER”, “Seinfeld”, and “Law & Order”. Local TV stations no longer invest aggressively in rerun rights, further diminishing the profitability of older models.

The downfall of domestic syndication

The domestic syndication market has crumbled, leading to a shortage of successful sitcoms that once fueled local TV stations. With audiences flocking to cable and streaming, the era of era-defining hits like “Friends”, “Home Improvement”, and “Modern Family” has ended. This fragmentation has fundamentally altered the media landscape.

Rose Oberman, a media analyst, notes that the industry has shifted from growth to maturity. Despite a predicted gradual decline in revenue and cash flow, viable business models still exist. The challenge lies in adapting to the new normal.

Syndication and international licensing

The growth of streaming platforms has significantly reduced the supply of shows available for syndication and international licensing. As Netflix, Disney, and Warner Bros. Discovery focus on keeping their biggest properties in-house for streaming, traditional avenues for revenue generation dry up.

European resilience

Interestingly, Europe’s major broadcasters—such as the UK’s BBC, Germany’s RTL, and Italy’s RAI—have fared better. Cord-cutting is slower, offering these companies more flexibility to experiment with direct-to-consumer models without dismantling older, stable revenue streams. This dynamic will significantly benefit Warner Bros. Discovery as they balance their investments between streaming and traditional distribution.

Warner Bros. Discovery’s recent deal with a major cable provider indicates a possible future where streaming and cable co-exist more harmoniously. This blended approach may offer the financial stability needed to navigate an evolving industry.

Financial resilience and future outlook

Despite concerns, Warner Bros. Discovery operates from a position of strength, capable of weathering industry consolidation. Their global footprint and creative talent pool provide essential wiggle room for monetizing international content, making them resilient against industry shifts.

As the TV business grows more global, survival depends on scale. Smaller entities may pivot to producing content for tech-backed giants like Amazon and Apple, serving as “arms merchants” in the global media war. However, this role may not satisfy the ambitions of larger media companies unless substantial changes occur.

The TV industry is undeniably entering a new era, and its success hinges on adapting to the shifting sands of media consumption, investment, and global reach. For more insights and updates on the evolving world of entertainment, stay tuned and share your thoughts on our social media platforms.