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Media: Farewell to streaming's bargain ride

What is the future of streaming services?

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Move aside, Netflix, said Mark Sweney in The Guardian, Disney is the new king of streaming. Less than three years after "the serendipitous launch of Disney+ at the start of the pandemic," the entertainment giant's three streaming properties — Hulu, ESPN+, and Disney+ — have amassed a total of 222 million subscribers, surpassing Netflix. In the global streaming wars, "content is king," and Disney laid the groundwork for its domination with "a multibillion-dollar buying spree" in the mid-2000s. It's now "home to many of the world's biggest and most-coveted franchises" after purchasing Pixar in 2006, Marvel in 2009, Lucasfilm's Star Wars and Indiana Jones in 2012, and then 21st Century Fox in 2018. The building out of Disney+ since 2019 and its breakneck pursuit of users hasn't come cheap. Since its launch, the streaming service has cost the company more than $7 billion.

All that spending has been great for subscriber growth, but now the bill is due, said Martin Peers in Bloomberg. Disney announced last week it will hike prices of its existing ad-free version of Disney+ by 38 percent, to $10.99 per month, in December. Like Netflix, it will also roll out a version with ads, at the old $7.99 price. "This is all about stemming the service's losses" and appeasing investors who are demanding a more cost-conscious approach. Streamers can't expect the loyalty they were used to, said Sarah Krouse in The Wall Street Journal. As they've been flooded with options, viewers "have gotten choosier and more frugal." It's increasingly common for them to "churn" through services, canceling once they're done with a favorite series. 

In a very few years, streaming has become "the focus of Hollywood and how millions watch TV and films," said Frank Pallotta at CNN. But the beginning of the streaming era "trained viewers to expect a lot of ad-free content for an inexpensive price." That expectation, analysts say, was unsustainable, and the streaming giants have recognized that. They are "looking at balance sheets" and starting to "cleave to what makes money," namely higher prices and advertising. Streaming's price wars are over.

Indeed they are, said Robert Pitman in Screen Rant, and consumers are turning out to be the losers. The splintering of the streaming industry has meant that users "have to pay for every streaming service to watch the same amount of content that used to be on Netflix." The content itself has also gotten watered down. Quality programming like Squid Game feels like an exception "in a sea of reality shows and geezer teaser movies." With the combination of HBO Max and Discovery Plus, we've almost reverted to the most-hated days of cable, said Sonny Bunch in The Washington Post. Many viewers cut the cord in the first place because they were tired of "paying for things they weren't using." Warner Bros. Discovery seems to be retreading this same path by combining prestige HBO with "cheap reality programming" from HGTV and A&E. It's only a matter of time before "the Great Rebundling" puts us back where we started.

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here

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