November 3, 2024, 12:39 pm | Read time: 8 minutes
Streaming has become an integral part of everyday life for many, just like the corresponding services. The market is now worth several hundred billion U.S. dollars, with growth rates exceeding 15 percent. So, more and more people are spending more money on more content. A win-win situation for everyone?
There’s unrest again in the streaming market. Recently, the announcement that Warner’s streaming service Max (formerly HBO Max) will come to Germany in 2026 caused a stir. Additionally, recent survey results on streaming user satisfaction—unsurprisingly negative given various price increases and expanded ad subscriptions—have drawn attention. TECHBOOK takes a closer look at the current streaming landscape and asks: Are streaming services actually in crisis?
Overview
The Streaming Market is Booming
First of all, the raw numbers clearly speak against it. Subscription numbers are not developing as rapidly as during the COVID-19 pandemic. However, almost all providers are seeing growth. According to Statista, Netflix had nearly 270 million subscribers as of August. Following that is Prime Video with 200 million, Disney+ ranks third with nearly 154 million, Max had almost 100 million at that time, and Paramount+ had over 71 million. Netflix now has almost 283 million subscribers, marking the largest growth among the services. But the trend is positive for the others as well. And the numbers continue to rise—more for some, less for others.
It is also a fact that more and more streaming services are turning a profit. For Paramount+, it was the first time in Q2 2024, similar to Disney+. However, this truth also includes the fact that this was not the case for years, and for services like RTL+, it is still not the case today. Additionally, there have been multiple waves of price increases in recent months.
Several Price Increases in Recent Times
Since mid-October, for example, Disney+ customers have had to dig deeper into their pockets. The streaming provider increased the price of both ad-free subscriptions. Sky and Wow, on the other hand, did so at the beginning of the year—but it mainly affected the sports subscription. Since August, RTL+ has also announced several smaller price increases and subscription restructurings. In September, YouTube Premium users reported price increases.
Netflix, however, made a sweeping move in the spring. Existing plans became more expensive, and the cheapest ad-free subscription, the basic package, was removed for new customers and later for existing ones. In a way, Amazon Prime Video also became more expensive with the introduction of the ad-supported subscription in February. Since then, those who want to watch the streaming program without ads have to pay extra.
(More) Advertising
Speaking of advertising. Almost all major streaming services now offer ad-supported subscriptions. These are generally significantly cheaper than other plans. In return, viewers are regularly shown ads. Despite outraged reactions and surveys, the shift seems to be paying off for the services—in terms of both subscription numbers and financially.
The result: even more advertising. For instance, Prime Video announced just a few weeks ago that it plans to show even more ads starting in 2025. Netflix also recently emphasized the success of its ad-supported subscription. As reported by ZDF, the ad-supported subscription recently accounted for more than half of new subscriptions in the countries where it is available.
Streaming Customers Often Have No Other Choice
It can be noted that more and more people are opting for ad-supported subscriptions. The reason is simple: They are—sometimes significantly—cheaper than ad-free options. With an ever-growing range of streaming services, many users have no other choice.
A simple calculation suffices. The cheapest ad-free Netflix subscription currently costs 13.99 euros per month, Disney+ is currently 9.99 euros. To watch Amazon Prime Video without ads, you have to pay 11.98 euros per month. Sky’s streaming service Wow charges 9.98 euros for its film and series subscriptions, Paramount+ demands 7.99 euros. After Apple TV+ was priced below the competition for years, users have had to pay 9.99 euros per month for the service since the end of 2023. Those who want to watch RTL+ without ads pay 8.99 euros per month. That adds up to 72.91 euros per month—and there are theoretically even more streaming services, not to mention sports subscriptions.
That’s a lot of money, which is why many streaming users ultimately opt for the lower price and “pay” with ads instead. At the same time, satisfaction with the services’ content seems to be decreasing.
Are Contents Getting Worse?
According to a recent study by TiVo, fewer and fewer users rate the content of major streaming services as “average to very good.” The apparent connection between the subscriptions booked is interesting. While the satisfaction of ad-free subscription users fell from 78.6 percent (Q2 2022) to 74.5 percent (Q2 2024), the decline is more pronounced among subscribers who see ads. In 2023, when many ad-supported subscriptions were introduced, it was still 74.2 percent, but this figure is now only 60.8 percent.
Ad interruptions apparently lead users to intuitively rate the content lower. Scott Maddux, vice president of global content strategy at Xperi, TiVo’s parent company, also assesses it this way. “As more consumers switch to ad-supported SVOD services (Subscription-Video-on-Demand), the perception of content quality may have shifted slightly downward.”
Other studies show similar trends. However, there are differences between individual providers. A survey by CableTV shows a decline in satisfaction for Netflix, Disney+, and Paramount+, as well as for providers like Hulu and Max, which do not exist in this form in Germany. On the other hand, the content from Apple TV+, Prime Video, and the service Peacock, which is associated with Disney+ in Germany, fares better.
Movement in the Streaming Market
In principle, several trends can be observed, which the aforementioned subscription numbers can only partially obscure. One key point has already been mentioned. After many companies and film studios took advantage of the hype during the COVID-19 pandemic to launch their own streaming platforms, this has now subsided. Nevertheless, new providers are still emerging, or—like Max—existing services are expanding. A growing range of offerings meets a target audience that is not growing at the same rate.
Several streaming services—including Netflix and Disney+—have already announced and partially implemented cuts to their content budgets. Quality over quantity is the mantra in many places. However, for streaming services, quality primarily means relying on established brands. A true flood of spin-offs, remakes, and reboots has been observed for some time.
Also interesting: TECHBOOK editor: “The many new series spin-offs are just annoying!”
Current examples can be found with all providers. Prime Video recently released the second season of the “Lord of the Rings” series “The Rings of Power.” Shortly before that, the second season of the “Game of Thrones” spin-off “House of the Dragon” aired (in Germany on Sky/Wow). Netflix will release the second season of its most successful series to date, “Squid Game,” in December. At the same time, another project related to the series with star director David Fincher seems to be in the planning stages. Meanwhile, Disney+ recently aired the new Marvel series “Agatha All Along,” a spin-off of “WandaVision,” while RTL+ secured a major deal with German TV legend Stefan Raab.
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An Industry Under Pressure
The hype around certain productions is growing ever larger. At the same time, the marketing concepts of streaming services are more extensive than before. Consider the aforementioned “Squid Game” or the Netflix series “Wednesday.” However, this also increases the pressure for success on the respective productions. If a series does not pay off for the providers, it is canceled more quickly than before. The pressure is different for films, but no less present.
This development is not exclusive to the streaming market. Looking at other areas of the entertainment sector, such as cinema or gaming, similar trends can be observed. While AAA productions like “The Witcher 3: Wild Hunt” cost 32 million U.S. dollars in 2015, budgets have now increased significantly. Rumor has it that the upcoming blockbuster game “GTA 6” already has an incredible budget of 2 billion U.S. dollars.
Studios are taking enormous risks with such projects. The potential for impact is enormous. At the same time, the risk of failure increases exponentially. This is ensured, just like in streaming, by an incredibly competitive market.
Streaming Market Heading Toward a Crisis
Experts are therefore certain that sooner or later a counter-movement will emerge. This was already predicted one to two years ago. Apparently, however, streaming services have managed to delay the development once again with the introduction of cheaper ad-supported subscriptions.
But looking at the bare facts, one must say that the crisis in the streaming sector has been simmering beneath the surface for several years. Offers will eventually have to be bundled. Some services will likely disappear from the market because they are not profitable in the long run.
A key factor will be the content—or it already is. Exclusive titles are the most important argument for a subscription. However, this also requires a strict licensing policy that does not foresee showing originals on another service at some point. The quality of the content will also become even more important in the future. Because with rising prices, users also expect corresponding productions—a vicious circle for streaming providers. We are therefore likely heading toward a future with fewer streaming services that offer less content—but hopefully absolutely worth watching.