Is the era of “Peak TV” really over? According to John Landgraf of FX, the man who coined the term in the first place, it is. But even Landgraf has admitted that although he has made that prediction twice before, the number of new scripted series continued to climb to a record 599 in 2022. This time, however, there is evidence the prediction is about to come true.
The Big 5 streaming services (Netflix, Prime Video, Disney+, Hulu, and HBO Max) are collectively seeing stagnation in subscriber growth. In response, Netflix, HBO Max, and Disney+ have all rolled out ad-supported tiers to attract new customers. However, ad-supported subscribers generate less revenue than premium tier subscribers, and advertising is not making up for the gap. This happens as traditional TV revenue declines due to cord-cutting.
At the same time, the video providers experiencing some of the most robust growth in this environment are the free, ad-supported TV apps (like FAST, for example) consumers are discovering as they peruse their smart TV menus. But once again, growth is coming on a platform in which ad revenue and licensing fees are not likely to replace what content producers are losing in cable, satellite, or telco fees.
According to Hub Entertainment Research, the author of this report, content providers will reassess production budgets due to revenue model challenges, which will likely result in a decline from last year's peak number of new series.
“As revenue growth stalls, media companies will produce less original content and be less willing to take chances on risky niche-appeal ideas. We can expect to see them rely more on what they think are safe bets – franchises, sequels, reboots, library content, inexpensive unscripted series, and popular IP ported over from gaming, graphic novels, and other media,” commented Mark Loughney, Hub Senior Consultant.