The pandemic sparked a boom for video streaming services. Now, that unprecedented wave of growth may be hitting its limits
Netflix’s losses weren’t simply theirs to bear. In the aftermath of Netflix’s results, other streaming services have taken a hit—Disney, Paramount, and Warner Bros. Discovery, all of which run streaming services, saw their stock price drop as well. The same week that Netflix cut some of its marketing team, CNN+, the news service’s foray into streaming, shuttered.
It all raises the question: Was the pandemic peak streaming, and we’re now on a perpetual downward slope? On the heels of its April 19 letter to shareholders—where Netflix said it lost 200,000 subscribers instead of growing by millions as expected—the companyin market capitalization in just over a week. Netflix says it already expects to lose a further two million subscribers in the second quarter of 2022.
“In 2020, people were locked at home and you couldn’t do anything but watch TV,” says Maria Rua Aguete, senior director of media and entertainment at London-based consultancy Omdia, which regularly analyzes the state of the streaming market. “It’s only natural to go down after a boom.” The next question, then, is how streaming services will find their new normal, as user demographics change and the cost of basic needs continues to rise.It’s not just that pandemic viewing habits may be reverting. For one thing, viewers may be overwhelmed and exhausted by the plethora of services available, according to a Nielsen study—which found“The number of video streaming services in the U.S. has reached a ceiling,” says Rua Aguete.
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