Ankler Preview: The Great Streaming War Power Rankings COVID Era Edition Part 1
The Battle Is Joined
Since the dawn of The Ankler a couple years ago, these pages have been dominated by two mega-issues: the upheaval released by various waves of social unrest targeted at the industry and the upheaval released by the influence of one mega-pocketed company, the response to which coalesced into a battle for the entire future of entertainment.
Throughout that battle, as the industry trembled and the press heaped layers of adulation upon the visionaries of the new paradigm, The Ankler remained firmly in the lonely corner of Netflix skeptics. Not because I thought there was nothing good on The Service or wasn't impressed by the spirit of innovation there, but because of a couple factors:
1. I thought its Drunken Sailor fiscal strategy was a con game leading Hollywood off a cliff, following a pattern well trod by The Service's Silicon Valley brethren.
2. I thought that the idea of achieving anything approaching an entertainment monopoly was fundamentally flawed.
Underlying all this was the sense that yes, The Service looked pretty good while it had the field to itself, but once Hollywood's other players got in, entertainment professionals all around, they were not going to look quite as brilliant in a head-to-head completion for hits. The Fundamental unbreakable law of The Ankler being this is a hits-driven business, no matter what high and mighty technology and algorithmic fairy dust you throw at it. Additionally, I came to conclude that the Drunken Sailor Era had taught The Service abysmally bad fiscal hygiene about creating hits in a world of unlimited choices.
Once everyone was on the field, with their best products competing for consumers’ attention and subscription dollars, I assumed The Service's advantage would be less clear.
At last here we are. The Streaming Wars (aka The Great Entertainment Semi-Finals) are fully engaged. As of this week, all the major players have launched. Not only is everyone all in on the streaming future, but the legacy half of the business—theatrical—has actually been struck dead, giving the battle complete, uninterrupted cultural and corporate real estate.
Now that they're all arrayed, one huge question looms. The studios have been talking about this moment for a decade, arguably two if you go back to the first video-on-demand debates of the turn of the millennium. The past few years have been spent anxiously preparing for it. Everything was put behind this fight. You can't say any studio isn't taking this seriously now.
And given all that, we just have to ask: THIS IS THE BEST YOU COULD DO??!!!? REALLY! ARE YOU F-ING KIDDING?
The COVID Era streaming war power rankings follow below.
1. NETFLIX
Raison d'être: To become all entertainment
Superpower: Magic valuations
Kryptonite: Still undetonated debt bomb
Biggest Pandemic Moment: Tiger King
Lowest Moment 2020: Even amidst the subscriber boom, going back to the debt well for another billion in junk bonds.
Target Audience: Sentient lifeforms
Retail Brand Equivalent: Target
The Plan: Devour entertainment.
Power Flex Move: Turning off subscriptions of non-users and refusing to take their money.
Emblematic screenshot:
Assessment: Pre-pandemic, the question was how long could Netflix and its debt load continue to defy gravity until earthbound economics kicked in. Then the plague hits, and the entire planet becomes a captive audience for any entertainment they can get their hands on. Suddenly an overwhelmingly dominant position looks like a permanent part of the landscape.
Which doesn't make Netflix’s problems go away—the debt bomb is still there. A stock can't trade at a P/E four or five times higher than the rest of the sector forever. Its batting average to get a hit is still the disgrace of the industry, and that, too, can't go on forever. The Service has a lot of money and a lot of production capacity locked up in some big flashy deals that may or may not pay off. Despite the fact that Netflix miraculously found more North Americans to subscribe this month, it’s still running out of planet to grow to and eventually other forms of entertainment will, in fact, return.
This has been a brief preview of today’s special Power Rankings edition of The Ankler, the industry’s secret newsletter. To read it all, and see how all the streamers stand, subscribe today for just $10 a month.
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