Streaming accounts do not come out: only the big ones seem to be able to endure burning money

We are in a cycle change in audiovisual consumption, and like all changes, they entail a crisis. What remains to be seen is how you get out of it and with which winning actors. The streaming platforms and the companies and companies have turned spending on their content into a money-burning race in search of retaining the attention of the spectators in their homes at a time when that battle is more competitive than ever.

Netflix, Prime Video, Disney Plus, HBO Max (pending its merger with Discovery), Apple TV +, AMC +, Paramount, Peacock in the United States, Starzplay. And all without counting the platforms of each territory. And practically allexcept for some lesser known exceptions of the account— are not profitable.

The big question in the medium and long term is who will be able to maintain this level of spending and when the wheel will turn to profit. Excessive spending on content and marketing has been Netflix’s recipe for many years, for example, playing with him cash flow and the euphoria of investors, plus the not insignificant growth in subscribers, to keep its catalog fresh and attractive.

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The problem has come when the economic context has changed, users begin to have more competition to chooseand investors are afraid.

But let’s see how we got here and where the main platforms are.

This is right now the waste to capture attention and retain subscribers

Prime Video is, with the premiere of The Rings of Powerthe platform what more money do you spend. Of course, having behind the stamina that the entire Amazon conglomerate can give you. A situation similar to the one with Apple TV + —which in a complicated way can be profitable, but is an addition to its offer on Apple One— or even Disney Plus, whose parent company has recovered with the improvement of the pandemic what has always been its most profitable business: that it is not the cinema , but the amusement parks.

But let’s go with the red giant in low hours. Netflix has outspent Amazon over the past decade and has produced a much higher volume of shows. However, keep in mind that Netflix’s only business is itself, streaming, not e-commerce, the cloud, or devices like Amazon or Apple.

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However, for the last few years Netflix has been valued as a technology company. That’s right. Its apps and recommendation algorithms are its biggest asset, but its shares were surely getting closer to those of Apple than those of Disney, where it is still closer. Netflix remains, to a large extent, more of a competitor to the big TVs than to any Big-Tech.

We have known the bump this year. During the three-month period ending June 30, Netflix posted a loss of 970,000 subscribers.. His first major drop in a decade… Exhaustion?

Despite that, you have to give Caesar what is Caesar’s: Netflix still has 220.67 million subscribers and said it expects to add a million in the third quarter.

Of course, certain cries of alarm are already heard. The company has laid off about 450 employees, has announced a cheaper ad-supported subscription plan thanks to a new partnership with Microsoft and has gotten tough on password sharing. Changes are coming, and, if things went well, there wouldn’t be so many.

A global and changing market

There are also aspects of Amazon’s business where its success is not fully appreciated. It has a large audience in foreign markets such as Western Europe, Japan, and India. Amazon is the leading streaming service in Japan and second only to Disney in India, according to Media Partners Asia.

The business of the company that sells other streaming services generates a lot of revenue and viewers. Services like Paramount+, Starz and Showtime get a significant chunk of their customer base from Amazon, according to Antenna, a third-party data company.

And the most important. Amazon can afford to play for the long haul. Even with the purchase of MGMIt’s probably not going to supplant Disney as the world’s biggest entertainment company. You don’t need it either. There are worse ways to spend billions of dollars than funding art to market toilet paper.

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We close this tour with Disney, the great entertainment giant, which despite that with its great bet on Disney Plus continues to lose money.

Disney spends aggressively on content, marketing and technology infrastructure, but losses from Disney’s streaming division topped $1 billion, up from losses of $300 million a year earlier. Streaming revenue increased 19% to $5.1 billion.

In the years to come we will know how many of these names continue and with what strength. In the meantime, let’s enjoy the era as viewers with the most choice in history.