Blue Light Special On Streamer Binging
Hollywood CEOs tell investors they'll slash prices, but more importantly not escalate the content budgets powering hit shows -- or any shows
The Hollywood moguls who run the industry’s dominant streaming services sent out a surprising message in recent weeks: They all intend to slow down spending on exclusive new streaming series and movies.
Warner Bros. Discovery’s David Zaslav, Disney’s Bob Chapek, Netflix’s Ted Sarandos and Paramount’s Bob Bakish never met in person to discuss how to avoid runaway streaming spending to lure subscribers. They didn’t have to. Studio chief executives used quarterly earnings calls with Wall Street analysts to make their point.
And one by one over 22 days, Hollywood CEOs scaled back on what Morgan Stanley projected will be $140 billion spent this year on streaming programming — after recognizing the limits of streaming subscriber growth, including Netflix’s surprise loss of 200,000 customers last quarter.
As Lightshed Partners analyst Richard Greenfield put it, “Investors have soured on direct-to-consumer streaming as losses pile up while Netflix’s dramatic slowdown in the past six months has undermined the idea of achieving the necessary scale to drive robust profitability.”
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Sarandos, the longtime creative force behind Netflix shows, seemed unwilling to throw in the towel during the company’s conference call with Wall Street analysts even after reporting its stunning loss of subscribers: “Look, I think we’ve got to continue to invest in content…” But his own chief financial officer, Spencer Neumann, quickly corrected the narrative by stating, “We’re pulling back.” (The company soon announced layoffs, dropped multiple projects in development and signaled further belt-tightening.)