Hollywood’s labor stoppages are dominating the conversation halfway through 2023, with investors and analysts wondering which platform is best equipped to handle prolonged strikes. Parrot Analytics presented its Q2 2023 “Quarterly Report Card” on the state of the streaming industry to take stock of the first half of the year, and to analyze which company is set up for success amidst not just the labor strikes, but the post-sub-growth-at-all-costs phase of streaming.
Parrot Analytics analyzed the major platforms from five media companies that control over two thirds of all US demand for TV content: Disney (Disney+ & Hulu), Warner Bros. Discovery (Max), Paramount Global (Paramount+), NBCUniversal (Peacock), and Netflix. It also included demand data for Apple TV+ and Prime Video, whose parent companies do not break out subscriber or revenue numbers for their entertainment platforms, but stand out in audience demand share and major awards recognition.
Netflix has pulled a complete 180 compared to where it was in the middle of 2022. As Wall Street shifted its entertainment priorities from subscriber growth to more traditional measures of business success, Netflix has successfully introduced an advertising tier and cracked down on password sharing. The streamer’s days of double-digit subscriber growth every quarter are likely behind it, but Netflix had a very strong Q2 2023, adding 5.9 million subscribers.
Netflix does continue to lose market share in terms of demand for streaming originals, but is still the dominant player in this space. It also has the highest total on-platform demand, which accounts for licensed and original TV and movies, with US consumers. Netflix’s massive scale makes it the industry leader, and it remains the biggest entertainment company that is actually profiting from its streaming operation.
Demand for original series is a key leading indicator of subscriber growth for SVOD platforms. Disney+ has lost momentum in 2023, ticking down from 10.2% global share at the end of December 2022 to 9.4% by March 2023, and 8.8% as of June 2023. This has coincided with a loss of nearly 16 million global subscribers over the last two quarters.
While season 3 of “The Mandalorian” and the recent debut season of “Secret Invasion” have performed well enough, recent entries in the respective Star Wars and Marvel franchises have not matched the highs of earlier series. Given Disney+’s reliance on these two core content pillars, reestablishing both as marquee streaming destinations will provide a boost to the entire platform, Parrot said.
Based on total on-platform catalog demand last quarter, which includes both original and licensed TV series and movies, an eventual combination of Hulu and Disney+ would become the market-leader by a wide margin with a 24.6% domestic audience demand share. Not only would this leapfrog the newly formed Max (a combination of HBO Max and Discovery+), but it would represent the first time a competitor has overtaken Netflix in this metric. Crucially, however, this scale will be hollow if it does not lead to both renewed subscriber growth and rising average revenue per user.
The newly combined Max platform is the entire reason then-Discovery and then-WarnerMedia got together in the first place. The long-awaited combination of HBO Max and Discovery+ is here, and the initial data suggests that Max is off to a strong start. The rebranded and expanded Max platform is now less than one percentage point from overtaking Netflix at number one in total on platform demand share with US audiences.
Max’s streaming originals have lost market share for four consecutive quarters, but HBO’s originals are making up for that in driving demand and subscribers to the platform. This data suggests combining Discovery+ with HBO Max is indeed creating one of the premiere four quadrant streamers, at least in the United States. Warner Bros. Discovery’s stock is up double digits year-to-date, but is stuck at roughly half what is debuted at in April 2022.
“Yellowstone” remains one of the most in-demand scripted series on all of Peacock. However, the streamer licenses the massively popular Western from Paramount Global and the company is expected to reclaim the title whenever that deal expires. Peacock will have to replace that lost audience – either through continued licensing, leveraging NBCU’s portfolio of linear brands, or strategic original development.
When comparing the audience demographic profiles of “Yellowstone” and three of Peacock’s highest-profile originals, there is a divergence and overlap in terms of viewers. Planning ahead for that eventuality – and leaning on a steady catalog of Dick Wolf produced procedurals, not to mention Bravo reality – will help Peacock round out its offering across various taste clusters, the report says.
Paramount Global is in third place when it comes to corporate demand share, but Paramount+ ranks no higher than fifth in terms of on-platform or original content demand. However, the streaming service gained significant on-platform demand share in Q2 2023 – which accounts for all series and movies available on a platform regardless of exclusivity – as it moved up from 9.2% to 11.2% versus last quarter, and from sixth to fifth place. Paramount+ jumped ahead of Disney+ in this ranking, and is within a rounding error of Prime Video for fourth.
The combination of its Walmart+ deal and Showtime platform consolidation seem to be helping Paramount+ with scale, but it is unclear how much this will add to the company’s bottom line as all streaming companies focus on reaching consistent profitability. According to the report, it remains to be seen how Paramount+ breaks into the top three streaming category alongside Netflix, Disney, and Warner Bros. Discovery.
● PRIME VIDEO
While Amazon’s Prime Video continues to license content from other companies, which should only get easier as studios look to generate more revenue and deemphasize platform exclusivity, it is still counting on its roster of originals to drive demand and value.
In the second quarter, its top 10 most in-demand originals in the United States were all among the top 2.7% of TV titles in that timeframe. However, the conclusions of “The Marvelous Mrs. Maisel” and “Jack Ryan” leave Prime Video without some of its marquee originals at a time when the delivery of fresh scripted content over the next several months is uncertain due to the ongoing Hollywood strikes.
● APPLE TV+
Led by the third season of “Ted Lasso,” as well as breakout hit “Silo,” Apple TV+ hit new highs in streaming originals demand share in the United States and around the world. When it comes to demand for original series, Apple TV+ is now the third most in-demand service with US audiences, jumping ahead of Disney+, and the fourth most in-demand globally. Moreover, “Ted Lasso” was the most in-demand streaming original with global audiences from April-June 2023, the first non-Netflix or Disney+ original to achieve this ranking since 2017.
Nevertheless, the biggest event for Apple TV+ in the last six months may have been soccer superstar Lionel Messi signing with MLS squad Inter Miami. With MLS Season Pass, Apple now has exclusive access to live games of one of the most in-demand athletes in the world.