The final stretch

Eyevinn Technology
4 min readAug 7, 2023

S07E07: Game of Streams (The final stretch)

Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you do not want to miss an episode.

In a recent interview, Disney CEO Bob Iger stated that: “Disruption of traditional TV business happened at a greater extent than I was aware,” indicating that Disney will sell the channels, stations, and cable TV networks and they “may not be core to Disney”.

Traditional TV distribution and especially cable TV has historically been a very profitable business, during the peak TV days and before Netflix disrupted the business, cable TV had profit margins of nearly 40 percent among the six largest US cable companies.

These days are counted, and the number of traditional TV subscribers continues to drop. In the latest report, Comcast reported a loss of 543,000 subscribers during the quarter to 14.98M. During the same quarter, Charter’s video customers decreased by 200,000 to 14.7M subscribers.

The trend toward streaming is clearer than ever. The Nielsen Gauge provides a monthly macroanalysis of audience viewing behaviors across key television delivery platforms, including broadcast, streaming, cable, and other sources. In September 2021 the share of streaming was 27.7% and in June 2023 this figure was 37.7%.

Traditional TV packages and distribution is on the final stretch.

To fight back against the cord-cutting trend, Charter Communications split its existing TV package, into two packages. One which will include RSNs and other higher-cost sports channels like league-owned channels; and one which will not have those higher-cost sports channels.

Disney has held early conversations to find a new strategic partner for ESPN, to transition the sports network to streaming. A partner that according to Bob Iger “comes to the table with value that enables ESPN to make a transition to a direct-to-consumer offering”.

Sports has long been the reason to keep the traditional TV packages. By separating sports from the traditional TV packages and the effort to find a partner to take ESPN towards a direct-to-consumer product, traditional TV packages and distribution is on the final stretch.

On the other side

At the same time, sports are serving as a propeller of growth for streaming. But with the extremely high content costs, especially for sports content rights, the missing lucrative distribution fees, and relatively high costs for delivery the streaming services are far from the same profit margins for the traditional TV distribution. Except for Netflix and a few others, the streaming services struggle to make a profit at all.

As an example, Comcast reported that Peacock now has 24 million subscribers, up from 22 million last quarter and 13 million a year ago. Still, Peacock continues to lose money, reporting a loss of $651 million in the quarter, compared to a loss of $704 million last quarter, and $444 million a year ago.

Another example is Viaplay, a Swedish video streaming service with a focus on premium sports, series, films, and documentaries. They have lately announced big financial problems resulting in layoffs of more than 25% of its staff as it pulls out of the large parts of the international expansion and focuses on the Nordic and Dutch markets.

In the latest annual report from Viaplay, you could read that they have future payment commitments in respect of contractual program or sports rights in the coming three years of more than 38 billion SEK, or 3.26 billion euro. With these content costs it is understandable that we see financial problems if the subscriber count and revenues don’t compensate these figures.

Disney, Comcast, and Viaplay are not unique when it comes to streaming services that struggle to reach profitability. To make streaming services profitable changes need to happen. The streaming industry needs to adapt to the new economic environment compared to traditional TV.

In the future, we will have fewer streaming services, more reasonable content costs, and more cost-efficient technology platforms.

We will see declining content investments and costs, especially around the extremely expensive content rights for sports. I believe we have seen the peak in sports content rights and future deals will see lower and fewer bids. The market needs to adapt, and we will see new business models and cooperation between leagues and streaming services.

In general, will see increased consolidation through cooperation, mergers, and acquisition. The tech giants will continue to invest in streaming, and local broadcasters and streaming services need to cooperate and consolidate to be able to compete.

And finally, we will see efforts in more efficient content production and distribution workflows. When it comes to content distribution workflows, we have already seen big improvements in the last years and content production improvements will need to follow.

In the future, we will have fewer streaming services, more reasonable content costs, and more cost-efficient technology platforms.

To watch out for the coming months…

The build-up for the annual trade show International Broadcasting Convention, more commonly known as IBC, has started more intense and aggressive than ever before. The expectations of the show in September are higher than in many years. I expect that the trends will follow the path of the streaming services market with consolidation and efficiency as the guiding stars. Watch out for some interesting product announcements around more efficient content production workflows and continued consolidation of tech vendors.

Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.

Follow me on Twitter (@svensson00) and LinkedIn for regular updates and news.



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