The Streaming Wars Have Entered Their Chaos Era

A few days ago, I stumbled upon a news item that broke my brain. “Disney Explores the Sale of More Films and TV Series to Rivals,” Bloomberg reported on Feb. 3, citing anonymous sources who said that the entertainment monolith was considering licensing some of its original content to outside platforms “as pressure grows to curb the losses in its streaming TV business.” This might sound like a pretty quotidian showbiz story, but here’s the thing: Disney’s new thinking—which CEO Bob Iger confirmed in an earnings call on Wednesday—directly contradicts the longstanding industry consensus that the best way for a studio to monetize its content is to hoard it all on its own subscription streaming platform. This is, in fact, the conventional wisdom that begat our current overabundance of subscription streaming platforms.

Disney isn’t the first major entertainment company to challenge this basic assumption of the streaming wars in recent months. Warner Bros. Discovery executed the same kind of pivot in December, pulling several titles off HBO Max with plans to license them to free, ad-supported TV (FAST) providers like Roku, Freevee, and Tubi. If the immediate effect of the latter decision was mass panic over the sudden disappearance of Westworld, then the more salient implication of the Warner and Disney stories—not just for the industry, but for viewers—is that executives facing huge losses now appear to be questioning everything they thought they knew about their business. In other words: the streaming wars have entered their chaos era.

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Disney’s reversal on licensing is, after all, only the latest in an onslaught of puzzling and, at times, alarming news from the sector. Let’s review some of the biggest bafflers: The December HBO Max disappearances continued a rolling bloodbath at the newly merged Warner Bros. Discovery that began over the summer, as the company’s new CEO, David Zaslav, purged a long list of originals from the platform and scrapped completed seasons of well-liked series including TBS’s Chad and Max’s Minx. (WBD also shelved movies like Batgirl, which was already in post-production at the time.) Both shows were soon salvaged by other streamers, with Chad’s second season airing on the Roku Channel and Starz picking up Minx. Meanwhile, in November, Disney brought in its former longtime leader Iger to replace his own replacement, Bob Chapek. And just last week, Netflix unveiled its plan to crack down on password sharing—but then, amid swift subscriber backlash, the company deleted the most controversial details from its U.S. Help Center, claiming it had not intended to post them there.

Then there are the more standard cancellations, which of course are nothing new for TV, but which were rarer in the early streaming era and now seem to be happening at a greater frequency than ever. HBO’s Los Espookys, Amazon’s As We See It, Showtime’s Flatbush Misdemeanors, Max’s Made for Love, and AMC+’s Moonhaven are just a few of the standout shows that got slashed last year, just a season or two into their runs. And now, mere month into 2023, the axe has already fallen on several promising debut series, from FX’s long-awaited Octavia E. Butler adaptation Kindred to Hulu’s star-studded meta-sitcom Reboot to The Chair, a Netflix dramedy that put Sandra Oh at the center of campus intrigue, along with inferior titles (HBO Max’s halfhearted Gossip Girl reboot, Showtime’s ill-conceived American Gigolo sequel). The cancellations of cult favorites like Amazon’s The Wilds and Netflix’s Warrior Nun and First Kill—all of which center young, queer women—have sparked fan outrage and pleas for other platforms to save the shows. At the same time, renewals of soulless reboots like Netflix’s That ’90s Show and announcements of absurd-sounding franchises like Showtime’s new Billions universe (who’s excited for Millions and Trillions?) don’t inspire much confidence that streamers remain invested in quality programming.

Like just about every unpopular decision made by for-profit companies, the reasoning behind the vast majority of these moves surely comes down to money. Indeed, from a financial perspective, streaming is in an increasingly tough spot. As Iger noted on Wednesday, amid news that Disney would lay off 7,000 employees despite beating revenue forecasts: “The streaming business … is not delivering basically the kind of profitability or bottom line results that the linear business delivered.” (AMC Networks chairman James Dolan made a similar comment in a grim memo to staff this past November: “It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case.”) The content arms race that Netflix kicked off in the 2010s put enormous pressure on even the most prosperous corporate parents to launch in-house streaming platforms and grow their audiences through massive original-content spends.

Streamers haven’t just been pumping out more shows than linear could ever have supported; they’re also dropping unprecedented sums on individual titles designed to cut through the noise they created and attract new subscribers. But in a TV landscape no longer standardized by Nielsen ratings and the advertiser dollars they represent, where raw viewership numbers are only one piece of the metrics puzzle, it’s tougher than ever to judge any given title’s success. Did Amazon’s billion-dollar Lord of the Rings bet pay off? It depends who you ask.

One takeaway is certain: when it comes to streaming, just about everyone who isn’t Netflix is in the red. And when the industry leader reported significant subscriber losses in the first and second quarters of 2022, Wall Street worried that the era of endless growth had in fact ended, Netflix’s stock plummeted, and a company that had long been determined to run solely on subscriptions introduced an ad-supported tier in November. A year of layoffs and losses in the adjacent tech sector, within a larger U.S. economy haunted by recession talk that was likely just CEO fear-mongering, didn’t help matters.

Listen: I’m not a business reporter or an industry analyst or an MBA. I’m a TV critic who follows and occasionally reports on the streaming business out of personal and professional investment in television as an art form and societal barometer. Beyond hoping the industry remains sustainable enough to keep making shows I like, and to support the people who make them, corporate balance sheets are not my concern. But it seems obvious that when C-suites have revolving doors—Disney’s two Bobs and Iger’s newly announced radical reorganization plan aside, the last year has seen leadership shakeups at Netflix, WBD, Paramount Global, NBC Universal, AMC Networks, Apple TV+, and in Amazon’s media division—while strong series get canned without having a chance to find their audiences and studios are incentivized to trash finished seasons for tax purposes or sell them to competitors instead of airing them, the conditions for creating great television aren’t optimal.

’Twas ever thus, perhaps. TV has always been first and foremost a business. Yet what feels noteworthy here is not the expediency of streaming executives’ decision making; on the contrary, it’s the randomness and uncertainty and outright flailing that seems to surround so many recent strategic shifts. Streaming services like Disney+ and HBO Max were supposed to be, unlike Netflix, permanent libraries for century-old studio archives; now, copyright ownership doesn’t guarantee even recent titles’ availability. For years, Netflix operated on the assumption that enough viewers would pay a premium for an ad-free experience, but then they needed to reach the ones who wouldn’t. Loose password-sharing policies were once thought to help hook young people on services they’d pay for as adults; now, it’s time to crack down. Subscription fees were the only to effectively monetize programming… until licensing, and specifically FAST, apparently became a better option for some of it—which might make you suspect that streaming execs aren’t innovating so much as reverse-engineering the hybrid advertising-subscription model that predominated on cable-era linear, complete with a contemporary form of syndication.

This is what chaos looks like. We don’t know yet which of streaming executives’ many recent, seemingly desperate pivots will be temporary and which we’ll look back on as turning points in the history of TV, for better or worse. But if you listen hard, you can hear echoes of a Y2K-era music industry whose leaders couldn’t wrap their minds around the internet and let upstarts from Napster to Apple erode their revenue streams—and of early-2010s digital publishers chasing Facebook-driven audience growth, who realized too late that Zuckerberg giveth and Zuckerberg taketh away. A decade or two post-cataclysm, these industries are still playing financial catch-up, at the expense of some of their most ambitious voices and projects. While it remains to be seen whether streaming execs have a similarly ravenous appetite for self-destruction, the confusion in the air sure does feel familiar.