The streaming wars are over, and it’s time for media to figure out what’s next

I’m calling it. The Streaming Wars are over. 2019-2023. RIP.

The race between the most important media and leisure firms so as to add streaming subscribers, realizing customers will solely pay for a restricted variety of them, is completed. Sure, the individuals are nonetheless operating. They’re simply not attempting to win anymore.

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Disney introduced its flagship streaming service, Disney+, misplaced 4 million subscribers through the first three months of the 12 months, dropping the corporate’s whole streaming subscribers to 157.8 million from 161.8 million. Disney misplaced 4.6 million prospects for its streaming service in India, Disney+ Hotstar. In the U.S. and Canada, Disney+ misplaced 600,000 subscribers.

It’s grow to be clear the most important media and leisure firms are working in a world the place important streaming subscriber progress merely is not there anymore – they usually’re content material to not chase it exhausting. Netflix added 1.75 million subscribers in its first quarter, pushing its international whole to 232.5 million. Warner Bros. Discovery added 1.6 million to land at 97.6 million.

The present large media narrative is all about getting streaming to profitability. Warner Bros. Discovery introduced final week its U.S. direct-to-consumer business turned a revenue of $50 million within the quarter and can stay worthwhile this 12 months. Netflix’s streaming business turned worthwhile through the pandemic. Disney on Wednesday introduced streaming losses narrowed to $659 million from $887 million.

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Netflix has curbed its content material spending progress, and Warner Bros. Discovery and Disney have each introduced 1000’s of job eliminations and billions of {dollars} in content material spending cuts in latest months. Disney will “produce lower volumes of content” transferring ahead, Chief Financial Officer Christine McCarthy stated throughout Wednesday’s earnings convention name, although Chief Executive Bob Iger famous he did not suppose it could have an effect on international subscriber progress.

There’s nonetheless some progress among the many smaller gamers. NBCUniversal’s Peacock gained 2 million subscribers final quarter, giving it 22 million subscribers. Paramount Global added 4.1 million subscribers within the quarter, placing it at 60 million subscribers.

But the important thing query is not trying on the progress numbers as a lot because it’s in regards to the investor response to the expansion numbers. Paramount Global fell 28% in a day final week after the corporate introduced it was slicing its dividend from 25 cents a share to five cents a share to save lots of money.

Disney+ Hotstar subscribers introduced in a paltry 59 cents per 30 days of income final quarter, down from 74 cents final quarter. It seems Disney is OK with shedding these low-paying prospects. Disney gave up its Indian Premier League cricket streaming rights final 12 months. Those rights had been acquired for $2.6 billion by Viacom18, of which Paramount Global owns a minority stake.

Disney additionally introduced it is elevating the value of its ad-free Disney+ service later this 12 months. Disney’s common income per consumer for U.S. and Canadian subscribers rose 20% in the latest quarter after one more worth enhance was introduced final 12 months. Big worth hikes sometimes aren’t the technique executives use if the precedence is including subscribers.

Raising costs and slicing prices is not an incredible progress technique. Streaming was a progress technique. Maybe it’s going to come again a bit with cheaper promoting tiers and Netflix’s impending password sharing crackdown.

But it is extremely unlikely progress will ever return to the degrees seen through the pandemic and the early years of mass streaming.

That in all probability means the media and leisure indudstry will want a brand new progress story quickly.

The most evident candidate is gaming. Netflix has began a fledgling online game service. Comcast thought-about shopping for EA final 12 months, as first reported by Puck. Microsoft’s deal for Activision is now in jeopardy after UK regulators blocked the transaction. If that acquisition fails, Activision may instantly be a goal for legacy media firms as they search for a extra thrilling story to inform traders.

While Disney shut down its metaverse division as a part of its latest value cuts, marrying its mental property with gaming looks as if an apparent match. One can simply envision the expansion potential of Disney shopping for one thing like Epic Games, which owns Fortnite, and constructing its model of an interactive universe by means of gaming.

More consolidation will occur – ultimately – amongst legacy media firms. But one main gaming acquisition may begin a run within the trade.

Perhaps The Gaming Wars is the following chapter.

Disclosure: NBCUniversal is the mum or dad firm of Peacock and CNBC.