COMMENTARY Consolidation in Streaming Is Coming - Small Apps First?

COMMENTARY

Consolidation In Streaming Is Coming - Small Apps First?

• by Wayne Friedman , Staff Writer, April 25, 2024

The maturing streaming marketplace is already showing signs of where some of the bigger players might be heading.

A key sign of what is to come is the prospect -- or the lack -- of new TV series, movies, and other content.

It's the latter for Chicken Soup For The Soul Entertainment. With a massive loss of $637 million in its recently quarterly release, analysts believe it is edging toward the cliff -- toward bankruptcy.

This number overwhelms Chicken Soup for the Soul's revenue results bringing in $294.4 million for the period.

A key element in the company's filing is its management's admission about its less-than-successful ability to cut costs. This includes efforts around its $370 million acquisition of Redbox, the retail box DVD business, in 2022, as well as streaming app Crackle.

More importantly, management talked up the issues of failing consumers when it comes to what they most want from a streamer: New programming, especially in a way that would increase audience usage, as well as subscription and advertising revenue.

The lack of new product means less need for advertising -- although what money there is left to spend could go toward general brand awareness of its businesses

One wonders how many other mid-to-small size streamer and direct-to-consumer (D2C) businesses are experiencing the same thing.

Near term this would not seem to affect the big streaming brand players such as Peacock, Max, and Paramount+. But what about say AMC+, Fox Nation, BritBox, QVC+. Tennis Channel+, Lifetime, and Pickleball TV?

Sports-specific streamers may have a different metric to measure viewer's engagement and effectiveness when it comes to content acquisition.

But current market dynamics including possible shrinking overall advertising pricing -- as well as consumer demands for ever lower subscription pricing  -- can weigh heavy.

It isn’t just the glut of advertising inventory, but the glut of overall streamer platforms to begin with. So-called “churn” -- when consumers drop streaming platforms -- could be expected to rise in such a business environment.

In that type of marketplace, who then can survive?