Is streaming unprofitable?

[tall_guy1]

I got to thinking...is streaming unprofitable for companies who do it? Are streaming services way too cheap to cover their high cost programming?

 

[TheBigA]

Depends on the company. At Disney, they admit that streaming is not profitable:

Disney+ Still Isn't Profitable, Chapek Confirms More Price Increases

The Disney+ streaming platform still isn't profitable and Disney CEO Bob Chapek has confirmed more price increases for subscribers.

insidethemagic.net

As a result, Chapek was fired and replaced by Bob Iger.

 

[PTBoardOp94]

Streaming can be very profitable, regardless of Disney's management decisions.

 

[Mikey Radio]

Keep in mind that many newer technologies can take a while to make solid earnings. As an example, back when Sirius and XM were started up (both separate companies back then) it took years before they showed a good profit. Regarding your question about streaming, the answer is yes - streaming can be profitable, but those companies need to offer programming that people really want, and they need to offer it at a price consumers are willing to pay. That said, there are and will continue to be some growing pains, as streaming is still relatively new. When streaming first became "a thing", it seemed every network jumped in and began offering a paid streaming service, as did companies like Apple and Amazon. Already we've seen some of them ditch their paid streaming services completely, while others have shifted to tiered pricing where consumers can pay a smaller fee if they're willing to view commercials or have less content available to them. Other streaming services have combined to offer package deals where you can pay 1 price to get access to content from a few different providers.

Personally, in our household we're still able to see and enjoy everything we watch on a regular basis via our Comcast subscription, at less cost than we'd need to pay for multiple streaming services to have access to the same programming. That said, our cable bill jumped $10/month in January so as it continues to rise, as streaming services continue to adjust their pricing and offerings and if it gets to the point where some of the things we watch become available only via streaming, then we may jump in. We have a Smart TV and a laptop dedicated to the few things we do stream here and there, so for us the technology is in place already.

 

[davideduardo]

Keep in mind that many newer technologies can take a while to make solid earnings. As an example, back when Sirius and XM were started up (both separate companies back then) it took years before they showed a good profit.

The issue today is that the only way to make money streaming is with a paid subscription service. Any kind of free ad supported service costs too much in rights payments to be profitable, as the ad rates would have to be much higher than clients are used to paying for each pair of ears.

So we have a situation where those rights payments severely limit the ability to use streaming audio by people who have less disposable income and who can afford paid services.

Sirius/XM only made money when the merged. And then the issue was getting enough subscribers as old cars were junked and new ones with satellite started to fill America's roads.

In the case of streams, every new user costs the service more money, and those costs are the major overall expense. With satellite, there is far lest cost for additional subscribers compared with the cost of total operation and each subscription pays enough to cover the fees as well as a couple of hundred million in fees for each replacement satellite, too.

Regarding your question about streaming, the answer is yes - streaming can be profitable, but those companies need to offer programming that people really want, and they need to offer it at a price consumers are willing to pay. That said, there are and will continue to be some growing pains, as streaming is still relatively new. When streaming first became "a thing", it seemed every network jumped in and began offering a paid streaming service, as did companies like Apple and Amazon. Already we've seen some of them ditch their paid streaming services completely, while others have shifted to tiered pricing where consumers can pay a smaller fee if they're willing to view commercials or have less content available to them. Other streaming services have combined to offer package deals where you can pay 1 price to get access to content from a few different providers.

Right now, there is considerable fallout in video streams and satellite radio due to the quasi-recession and folks realizing that they can't have so many expensive services. Netflix has lost millions of subscribers, and the trades wonder about the sustainability of the services like Paramount+ and the like.

We just paid nearly $8 for a dozen eggs last week. When we have rampant inflation, people cut back on things like satellite, cable and video streaming services.

Personally, in our household we're still able to see and enjoy everything we watch on a regular basis via our Comcast subscription, at less cost than we'd need to pay for multiple streaming services to have access to the same programming.

There you go! You have reasoned it out to be within your own budget. Many others who can't afford the bigger cable packages are cutting back to fewer channels and lower costs. Last week, I tried again to get my cable provider to cut my fees by $15 a month because I did not want ESPN or any of the other US sports channels... they said they could not do that but I managed to get $10 lower rates and two free movie channels.

All that kind of situation does is produce lower income for the providers. I did the same with satellite for two vehicles and got the fee reduced by more than half.

That said, our cable bill jumped $10/month in January so as it continues to rise, as streaming services continue to adjust their pricing and offerings and if it gets to the point where some of the things we watch become available only via streaming, then we may jump in. We have a Smart TV and a laptop dedicated to the few things we do stream here and there, so for us the technology is in place already.

And people will figure out how to make adjustments to get what they most like and skip the less used services or cut back the menu.