Important Trends and Prospects for Streaming Platforms in the Future


The average American spends about 21 hours a week streaming digital media, while an astonishing 99% of American households have at least one subscription to a streaming service. Consumers have become accustomed to on-demand entertainment- the ability to watch any show or movie they want. It has been long since the cable TV era when only scheduled programs were available, and viewers could not watch those raging ads on television. Today, the digital media space is dominated by household-name giants. Some of the best streaming services in 2024 are Netflix, Amazon Prime Video, Disney Plus, Max, and Apple TV+, among others. Each streaming service has its library of movies and TV shows and a differentiated approach toward attracting subscribers.

Americans spend an average of 2.9 subscriptions per month—a testament to consumers’ love of variety and loyalty to different services—although as the landscape continues to saturate, the delicate balance between profitability, competitiveness, and customer retention must be staked.

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Leading Streaming Service Providers: Advantages and Disadvantages

Netflix

Not only is Netflix the first mover in the streaming space, but it is still the video streaming platform with the most subscribers in the world, over 260 million. Whereas the original business was a kind of aggregator of movies and TV shows, over the years, it has evolved into a respected producer of original content, which is why it attracts new customers.

One of the key differences between Netflix and its competitors is that, First, it’s a tech company; thereby, it is very sensitive to new technologies and gives tools through which it can consistently develop its technologies based on the preferences of the subscribers. For instance, Netflix is one of the most accurate algorithms that Netflix uses for viewer personalized recommendations according to the interests and preferences of viewers. The second point at which the company differs from most competitors is that, unlike most competitors, streaming is the primary source of revenue through 99% of total revenues.

Last year, following public outcry, Netflix penalized password sharing when it realized it was losing subscribers and revenue by allowing multiple users to participate under one account. As much as the initial decision sent the stock reeling and consumers crying foul, it ultimately spurred a spate of subscribers and a rise in revenue.

Priced on the higher end of the spectrum, Netflix’s membership cost currently stands at $15.49 a month, with a more affordable ad tier available for $6.99 a month.

Amazon Prime Video

Launched by e-commerce behemoth Amazon in 2011, this streaming service boasts a very respectable sum of more than 200 million subscribers. As you might expect, however, that number includes subscribers who do not use the Video offering as part of an Amazon Prime subscription.

Like Netflix, Amazon aggregates existing content and produces award-winning original content for its platform. Furthermore, movies and shows unavailable within Amazon’s free on-demand library can be rented or bought for an additional fee and watched immediately.

Since Amazon Prime Video is included in the Amazon Prime membership charge, the monthly cost is $14.99.

Disney Plus

One of the newer streaming platforms, Disney Plus, was founded in 2019 and has already gained more than 150 million subscribers. The main reason behind its success is an extraordinary level of popularity and demand for its content universe. Immediately after the platform’s launch, Disney took all licensed content under its name from other streaming services and turned Disney Plus into a monumental repository of Disney-owned content. This includes everything from Marvel, Pixar, National Geographic, and Star Wars content.

Disney Plus is sold at $13.99 a month.

Max

Founded in 2011 and initially branded HBO Go, HBO Go allowed subscribers to the HBO television channel to stream HBO programming online. Then, in 2015, HBO launched an over-the-top service called HBO Now, available to everyone, not just those subscribing to the HBO television channel.

Then, in 2020, HBO Max replaced HBO Go and HBO Now and started its global expansion and deployment of much new, largely original content. Then, in 2022, WarnerMedia merged with Discovery, Inc. and rebranded HBO Max into just Max, which brought on board content from Discovery as well as more Warner Brothers features. Max has been unbelievably successful mainly for its high-class, award-winning, and often viral content produced specifically as original content.

In the last few weeks, Max has acquired about 90 million subscribers with three price levels: the ultimate ad-free plan for $20.99, the ad-free plan for $16.99, and the ad tier for $9.99.

Apple TV+

Apple TV+ is a relatively new player established by Apple Inc. in 2019. Compared to its competition, Apple TV+ offers a much more limited content library and is also significantly more reasonably priced at $9.99 monthly. Apple TV+ subscribers are pegged at about 25 million.

Each of these content pieces is exclusive on Apple TV+, and most of them have already bagged an award, while others went viral.

Important Streaming Trends

Streaming Bundles

Bundles of streaming service offerings are increasingly common and likely only to become even more so. Why? First, bundles generally offer customers greater flexibility and choice while being far less expensive than the sum of the parts. Second, bundling has proven effective in reducing churn, as it typically eliminates the “grandfather action of scrapping a subscription to a service once a particular program is completed.”. Lastly, packaging allows streaming services to pass on the additional cost of content because they are, in a sense, able to offer more content to subscribers without needing to purchase it. Indeed, Disney has already offered a Disney Plus, Hulu, and ESPN bundle for some time now. The Comcast version features Netflix, Apple TV+, and Peacock. According to Disney Press, a bundle will soon include Disney Plus, Hulu, and Max. Though Netflix is still the clear leader in the streaming service arena today, bundling sharply escalates competition against services like Disney Plus and Hulu. It gets them the proper share of the market much faster.

“I think that there is validity to the fact that Disney and Hulu could catch up to Netflix in some way, especially because if they’re just able to convert a lot of their individual subscribers to bundling subscribers, that will help. It’s really going to be, I think, Netflix versus Disney in terms of just continuing to see who can push each other higher and higher from a streaming subscriber’s perspective.”

– Former Senior Manager, The Walt Disney Company | Expert Transcript

Profitability Over Subscribers

Subscription volume has always been seen as the key to determining a streaming service’s success or failure.

“…The subscriber numbers were the way that you were proving to either your financial backers or to Wall Street that you were growing, and so it was a little bit of a growth-at-all-cost mentality. Something like Netflix was spending billions of dollars and gaining millions of subscribers, so they set the template. Then, when you launch your product, your goal is to show how many millions of subscribers you have and how you can grow that. That has since changed.”

– Former VP, Warner Bros. Discovery Inc. | Expert Transcript

Late last month, Netflix reported that it had lost subscribers for the first time in ten years. The development marked a turning point for the industry. Hitherto, streaming companies have worked under the assumption that once they attracted new subscribers, eventually, they could raise prices and compensate for their losses. The discovery was that the point of leveling off on what the consumers were paying for streaming was reached before Netflix canceled their subscriptions. Therefore, there was a need for other streaming services to look elsewhere to increase profitability.

“Remember, we were talking about the metric changing in the spring of 2022, so the idea is, ‘ The more you spend, the more people you acquire. It’s worth that spend,’ has changed. It now needs to be, ‘The money you spend and the customers you bring in have to create a balance of profitability still,’ so everyone is spending less.”

– Former VP, Warner Bros. Discovery Inc. | Expert Transcript

Pay-Per-View and Ad Levels

Now, history is likely repeating itself again, this time as even more of these streaming services are looking toward cable and broadcast television elements to recapture profitability. To date, nearly every top streaming service has rolled out an ad-light lower-priced tier to its subscription options in the hopes of making a little more money off of ads and competing with price-sensitive customers.

The new motion seems to work well on its back—Netflix is expected to rake in around $1 billion in ad revenue this year, according to eMarketer’s estimates, and Disney has already recorded $1.7 billion this fiscal year.

On the other hand, some experts believe that streaming services will move toward a pay-per-view model, where they charge extra premium content fees.

“Yeah. Think about how easy it is for Disney, Netflix, Max, or whoever to do a pay-per-view. They already have your billing information and your card info, and they have the platform to promote and push the content. The only hurdle is to educate people or convince people that “Hey, you can pay for stuff on the platform.” Usually, when you pay a subscription, you assume that everything is free on Disney or Max or whatever, but Amazon does that.

Amazon, you have what is free, thanks to the Prime Video subscription, but you also can rent and buy a new movie that was just released. I think it’s more like getting people used to it, but I’m pretty sure that this will come at some point because, again, it’s another way to make money. It’s one of the models that traditional TV uses. It’s just a cycle. They’re going to use the same kind of techniques and strategy as the old-school linear TV.”

– Former VP, Warner Bros. Discovery Inc. | Expert Transcript

What is somewhat ironic is that streaming services are finding they have to become more like the industry they revolutionized first to survive in the business. That’s because ad-supported tiers are much more lucrative: these enable a service to profit from new subscribers as well as revenue from ads, but pay-per-view content helps maximize what it earns from its existing subscribers.

AI, Customization, and Personalization

Over the last decade, AI has revolutionized every industry, and streaming is no exception. The big, mature, and hugely successful streaming companies know that to retain subscribers for a long time, they need to do more than just deliver content; they need to create an experience that feels unique and personalized to each consumer. That is, of course, lots of investment in AI algorithms that collect data about every viewer’s behavior and then provide recommendations corresponding to each user’s preferences.

New streaming services also employ AI and data analytics to assess what users demand more so that these preferences are accounted for in their future productions. Similarly, by analyzing trends and viewer data, the growing popularity of streaming services can make better predictions of what external content will perform the best with their viewers, guiding what content to invest in.

While the consumer is looking for more personalization and customization in their retail shopping, dining, and consumer goods preferences, he or she will also be looking for that in their entertainment. Netflix has a lead in this area, having always been a technology company first and a content company second. Thus, it has a head start on years of investment in data and AI to deliver better, more tailored customer experiences.

More challenging will be legacy content companies like Disney Plus, Paramount Plus, or Max, which have only recently entered the streaming space. To survive and thrive in this space, embracing digital transformation and new AI solutions will be critical.

Appeal of Sports

Sports programming is another area through which major driving forces for the streaming industry will be realized. The companies implementing streaming services realized that the target market was very interested in streaming live sporting events. Adding sports streaming will enable platforms to decrease churn—rather than constantly needing to add high-quality content to retain subscribers, streaming providers can depend on sporting events to carry the day. Finally, adding sports streaming would increase revenues generated from advertisers’ businesses.

Other sports on streaming include the NFL, NHL, and WNBA on Amazon and Major League Baseball and Major League Soccer on Apple TV+. Netflix is the latest streamer to join the fight for live sports alongside Apple, Amazon, Disney, and other streamers and has announced it will broadcast two games of the NFL on Christmas Day 2024.

Like what happens with a return to ads and pay-per-view, the new trend draws back on cable and broadcast television. Streaming platforms will likely continue paying more attention to live events in order to keep subscribers on board and minimize churn.

“From what I understand and read and know about live sports, CPMs are upwards to four times what they are for other general programming. There are only so many shows that are going to be able to draw this large audience. There’s just so much content of varying qualities available to license…”

“The live sports component plays well in attracting advertisers and anchoring users into a platform. There’s no one more dedicated to a piece of content than sports fans are. It’s definitely becoming an anchor for a lot of different platforms because users want to stay subscribed and engaged, and they will watch when the programming comes on. That focus isn’t necessarily depressing the viability or the licensing opportunities for scripted or non-sports content. It’s definitely made it seem maybe less valuable to the different platforms.”

– Former Director, Paramount Global | Expert Transcript

Outlook for Streaming Platforms in the Future

What is the future of streaming services? Most industry pundits believe the future is smaller. The market is far too saturated now, and consumers are reaching a breaking point in how many they are willing to subscribe to. A Deloitte survey revealed that 36% of Americans believe that streaming platforms are not worth the price.

Netflix and Amazon will probably be there, and some permutation of Disney and Hulu will probably exist. Apple TV+ may be permitted to stick around as a niche player but doesn’t remotely threaten to compete seriously with the others. The fate of Max, for that matter, Paramount Plus, Peacock, and so many others needs to be clarified.

Which is why, when asked where he expects the streaming industry to be in 15 years, one expert predicts big tech domination and legacy content companies like Paramount and Warner Bros. Discovery will probably see mergers or acquisitions by their tech competitors:

“Fifteen years is a really long time, especially in this business, but probably big tech. I think tech is making money hand over fist and taking many eyeballs away from streaming and television. If Google tries to get in the game, I guess Amazon is in it, but if Meta decides to buy a studio, I think it’s just whoever has enough money to keep acquiring.

I think there’s going to be a lot more mergers. I think Warner Bros. Discovery is probably on the chopping block. Paramount is, although it’s not quite finding a buyer. I think those are going to be consolidated into the more prominent players, but again, things like Apple or Amazon can continue to pour money into it because it’s not their chief revenue source. It’s not the thing that’s keeping them afloat.”

– Former VP, Warner Bros. Discovery Inc. | Expert Transcript

Producing and acquisitive content are becoming increasingly expensive, so the platforms require a form of mitigation and cost split. The use of AI and technology would deliver outstanding customer experiences, which will give a stronghold on retaining customers, even though each streaming platform is going to run into a ceiling on subscriber growth.

“They have to look for other growth opportunities, and the growth opportunity is also to be able to tap into other platform agents and steal from them or ultimately merge their users with their own users.”

“In the case of Warner, they can’t sustain the costs of production and media rights by themselves. That’s why, I think, the future for them, Paramount or Warner, is to partner with either a tech company or another studio to reduce the risk, expand their reach, and ultimately have more content to offer to their subscribers.”

– Former VP, Warner Bros. Discovery Inc. | Expert Transcript

Alongside downsizing, the future of streaming platforms is likely to draw more upon the old cable days, only much more personalized and on-demand. We could find more ads, more pay-per-view programming, and live events available for streaming on major platforms.

Generally, the streaming industry is changing at lightning speed; therefore, a tremendous amount needs to be improved. For example, as one opinion advises, embracing social media and user-generated content into streaming platforms remains an opportunity that only some exploit. It has just added more personal features and created more differentiation in unique customers’ viewing experiences- a thing mastered by social media platforms but not so much by streaming platforms.

Use AlphaPro to Stay Ahead in the Streaming Platform Landscape

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