Ankler Preview: Streams Like Old Times

Streme de la Streme; Wake Me Up Before You Frodo

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Real live stage blood was spilled in the streaming war this week as things suddenly got deep. For a while there, during the heady COVID days, it seemed like all you had to do was turn on your app and laissez le bon temps roulez while the subscriptions poured in. To paraphrase one film classic: Streaming services aren't our destination, they are our destiny.

But this week, there were signs that, you know, not everyone is necessarily going to make it through this "transition." Or maybe even not anyone, by the looks of it.

Amazingly it all comes back, once again, to Ankler Rule #1: This is a business run on hits. Whatever app you build, whatever your valuation, whatever deals you've cut—in the end, if you don't give people something new to be excited about, you got plenty o' nothin, and nothin's going to be plenty for you.

The Service Stumbles

As we were saying, live by the hit, die by the hit.

Netflix this quarter, as execs revealed in their earnings call this week, didn't have many big hits. And lo and behold, they didn't have many new subscribers either. At least, not as many as they hoped they would have.

Lots of excuses: production on hold, you know. But when you're a juggernaut, you're supposed to be in the business of miracles, not excuses. If halted production and a price increase helps the P & L, now you get a sense of the cost of that on the other side.

Of more concern, Netflix now has had approximately 2,000 shows to get its algo-charged development process fired up to run circles around earth-bound producers, yt its batting average remains fairly grim. Netflix is still putting out as many new shows a week as some of the other services put out in a quarter, but the breakthroughs seem to be getting fewer and farther between. The Service can still pull out a Bridgerton or a Lupin; with that many at bats, it better. But with the competition getting even more ferocious, breaking through isn't going to get any easier. Neither is locking up the best talent and projects.

Consider the announcement of the Sony/Disney deal. When the Sony/Netflix pact was announced a few weeks ago, it was hailed as a historic alliance, a deal on the level of the Camp David accords.

Now it turns out that while it seemed like Netflix was buying the Sony catalog, lock stock, and IP, it was, in fact, only buying the first window. It turns out, there's a second. Who knew?! And that’s where the Sony catalog will go to make its real home after the first window passes.

Now it's clear why Ted Himself didn't put his name on the release of the Historic Pact. Another nice pile of change for America's Most Beloved Entertainment Executive. But it also shows how much tougher the marketplace is becoming for The Service, which for so long has been the prohibitive bidder.

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