When Is Streaming Not About Streaming?

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No-one is more fixated on who will lord it over Hollywood than Hollywood itself. The runners and riders in the streaming wars have all left the paddock; time to reassess the odds on the winners.

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Not surprisingly Netflix, Walt Disney, Amazon and Apple rank first among equals when it comes to entertainment. According to Bloomberg journalist Lucas Shaw they are likely to remain that way since “they are too big to sell…unless Apple tries to buy Netflix or Disney, but that seems unlikely.”

You could say the same about the pending WarnerMedia and Discovery merged entity. “HBO Max already generates more sales than any streaming service but Netflix,” says Shaw.

Then there are the “tweeners” - NBCUniversal and ViacomCBS. “These companies aren’t quite big enough to compete with the [other] five, at least in terms of global spending. They could sit pat and push for Peacock and Paramount+ to capture fifth and sixth place, or they could join forces, as they have in Europe.”

The next rung down includes AMC Networks and Lions Gate Entertainment, two companies that are “minnows” relative to the major streamers. “They have some valuable streaming services and programming assets, but don’t have the scale to even try to compete as a mass-market streaming service. They are selling themselves as more niche-oriented businesses.”

Apple is the one to watch, according to Bloomberg. Not least because it has deep deep pockets: “Spending money on entertainment is a rounding error for Apple, a company that generated $365 billion in sales in its most recent fiscal year.”

The company is already spending billions of dollars a year on programming, and is now doubling its real estate holdings in Culver City. It got a taste of success with Ted Lasso, and it wants more.

“Apple is investing in media to market its devices. The more time you spend using Apple Music and Apple TV+, the more likely you are to remain (or become) an Apple customer. When the company opened up a new Apple store in Los Angeles, it brought the cast of the sitcom to help.”

That media was just a loss leader for converting customers to its hardware may have been a previous strategy for Apple but Bloomberg suggests that it can’t ignore the numbers from its digital media business. Apple’s services business has grown into a $68 billion business – bigger than Netflix and Spotify combined.

“Apple has also discovered that these services can be more than marketing. A multi-trillion dollar economy has formed around the devices that Apple and other companies sell, and Apple sees an opportunity to make money from digital media services.”

The fly in the ointment for Apple are claims that the company is anti-competitive, otherwise, expect it to keep building out a studio.

Amazon, another company using film and TV to entice subscribers to pay for free posting of items bought via its Prime service, bought MGM this year to bulk out its back catalog. So far, Apple has avoided buying or licensing catalogs. “It’s more of a premium add-on than a service you can use every night,” says Shaw. “Yet if it wants to compete with Netflix and HBO Max to be a service that has something for everyone every night of the week, it will need to add catalog.”

Criterion is one option, Lions Gate or AMC are others.

Hulu is relegated in this selection, primarily because parent Disney treats it as second class to Disney+. That’s particularly the case overseas where Hulu was never launched internationally because its owners didn’t want to jeopardize their TV businesses in those territories.

“Disney is betting its company’s future on streaming but it has made Disney+ the top priority, and Hulu is second fiddle.”