“The streaming wars are over. And Netflix won. » The analyst firm MoffettNathanson thus summarized, in a November 2023 note, the prevailing sentiment in the subscription video-on-demand sector, the leader of which published new good results on Wednesday January 24. Behind this terse observation and the success of streaming There remains tension around its economic model, still subject to adjustments by all stakeholders.
Monday January 29, Prime Video (Amazon subsidiary) was to integrate advertising into its programs, in the United States, the United Kingdom or Germany (and soon in France). For American audiovisual studios, the tension is particularly strong. “For four years, the entertainment industry has been spending like sailors on a spree to finance the streaming wars, and now we’re starting to feel the hangover and see the unpaid bill,” notes MoffettNathanson.
After losing – for the first time – 1.2 million subscribers in the first half of 2022, Netflix has raised the bar: the service gained 13 million subscribers, from October to December 2023, to reach 260 million. It recorded a net profit of 938 million dollars (or 864 million euros) for 8.8 billion dollars in turnover, an increase of 12.5%, compared to 55 million a year earlier. This turnaround is partly due to the adaptation of its model: the new subscription with advertising, cheaper, has won over 23 million active users.
Adapt the strategy
This pragmatic shift was accompanied by price increases (the entry-level ad-free subscription was removed) and a policy to combat password sharing. Netflix prides itself on having maintained its investments in content (at $17 billion per year), but is also making adjustments: in cinema, the company wants to concentrate its budgets more on ambitious films. And he is now trying his hand at live content and sports. He has just purchased the rights to American wrestling matches.
Andy Jassy, CEO of the powerful e-commerce group Amazon, a competitor to Netflix, is rather optimistic for his Prime Video service, which could, “ultimately, become a profitable business in its own right”. But he too is adapting his strategy: you will now have to pay around 3 euros per month, in addition to the subscription, to see his programs without advertising. Amazon also cut several hundred jobs at Prime Video and its MGM studio.
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