Did you ever think the day would come when the good old triple-play cable subscription might be better than cord-cutting? In 2024, the costs for all of these combined packages may still be up for debate. What might not be up for debate is the ease of use of being cord-cutter. Then consider that the monthly costs seem to rise almost every year now. The United States has reached the inflection point of “peak streaming” for consumers.
There are now countless streaming packages to subscribe to. And no matter who you choose to watch, you are going to still have to pay for that high-speed internet connection. And the overlap in content and stations makes this just that much more challenging.
Is there any reason that an investor would want to invest in a media company just because of its streaming capabilities and goals at this time?
THE BUNDLERS!
This may start to sound a bit like Oggonomics is issuing a “screaming buy” call for the likes of Comcast Corporation (NASDAQ: CMCSA). It’s not that way at all. The problem isn’t that Charter Communications Inc. (NASDAQ: CHTR) is competing in more markets. The big issue is not that AT&T Inc. (NYSE: T) and Verizon Communications, Inc. (NYSE: VZ) are taking up all the cable and streaming subscribers with various 5G bundles (with lots of caveats) from cellphone subscribers.
A BOONDOGGLE
There are now just too many choices for cable, media, streaming and so on. Too many overlapping options in too many offering tiers. Too many ways to add or cut providers. It has turned into a boondoggle for consumers. And don’t dare lose or break that remote!
This dilemma about peak-streaming is not just a boondoggle for consumers. Investors are scratching their heads for how to navigate the new media environment. Remember the days of convergence in TMT (Telecom, Media, Tech)? They have converged. Without a doubt. And identifying the next winner may have a better chance that a blind monkey can pick tickers from a top hat than trusting any analyst recommendations at this time.
THE STREAMERS
Paramount Global is the latest to raise its monthly rate for the flagship Paramount+ streaming service. The option with Showtime is rising by $1.00 a month (to $12.99) and the key Paramount+ Essential plan goes up $2.00 to $7.99) per month. And, the more limited Paramount+ commercial package goes up $1.00 (to $7.99) per month. This is a restructuring move after the National Amusements would-be merger with Skydance recently imploded. The company now has 71 million or so subscribers but it’s still losing money (-$286 million in Q1-2024 vs. -$511 million in Q1-2023).
Comcast’s NBCUniversal has already said it’s raising the price for Peacock in July just in time for the exclusive broadcasting NBC/Peacock of the Summer Olympics. That’s actually the second recent price hike. Warner Bros. Discovery (NASDAQ: WBD) also announced in June that it was also hiking its Max/HBO streaming service charges.
Netflix Inc. (NASDAQ: NFLX) was big winner from and the start of independent streaming. But starting in 2025, the company plans to stop offering a count on its subscriber numbers. The post-pandemic subscriber count has been more volatile and less growth-oriented despite recently adding more than 9 million subs. Netflix is counting on new revenue sources from advertising and its extra member features to crack down on account-sharing and to drive growth ahead. The last figure we had for total memberships was 269.6 million. Netflix charges per month are now up to $19.99 for the premium membership and $15.49 for the standard membership. The basic package is $9.99, or $6.99 with adds — with all but the highest service easily leaving room for price hikes ahead.
Amazon.com Inc. (NASDAQ: AMZN) has a role here with Prime as well. As of the end of 2023, there were over 157 million Amazon Prime Video viewers in the U.S. alone.
Walt Disney Company (NYSE: DIS) has many avenues for revenues, but despite some 150 million subs the Disney+ platform is still not said to be a major profit center. Its peak-streaming number was said to be over 164 million subs. Disney has reportedly had cumulative losses of over $11 billion since 2019 tied to streaming start-up costs, operating costs and payouts for content. Will Disney+ be profitable in 2025? That may depend on whether Disney’s content presentation doesn’t keep pushing half of its subscribers away.
Let’s not forget about Apple Inc. (NASDAQ: AAPL) and the AppleTV+ estimated users at 25 million. Let’s also not forget about the 50 million or so Hulu users. And how dare this not offer a plug for Alphabet Inc. (NASDAQ: GOOGL) with its YouTube TV Base Plan at $57.99 per month for the first 3 months and then $72.99 per month thereafter. And, admittedly, many service providers were left out.
SCARY STATS!
Forbes recently issued some troubling numbers that cable subscribers, cable-plus-streamers and pure cord-cutters all need to consider. The Forbes take was that Americans pay about $46.00 per month for 2.9 streaming services on average.
A serious issue here is that 45% of streamers were shown to have canceled a streaming subscription over the last year. Guess why — costs were too high. The survey also indicated that 44% of people reported higher costs for their streaming subscription(s) over the last year.
NO WAY OUT!
Perhaps the biggest issue for consumers is simply deciding which services they need and which services overlap with the myriad of stations, channels and content. And there seems to be dozens of specialty streaming services which may also overlap content with existing providers you subscribe to. And no matter which streaming service or services are taken, it still needs a solid internet package. Maybe that free land-line that comes with some offerings isn’t such a bad idea in a peak-streaming world.
There is an even worse catch to all of this in streaming versus the giant cable bundle. If you have kids you can spend a lot more than these prices may represent. And if you are a real lucky parent, you might not even have a clue how much you are spending on all your streaming services used by the parents and the kids.
