Streaming Services – and What Causes Failure?

Pinpointing success is much more difficult than pinpointing what causes a failure. Perhaps, if you identify enough failures, you could assemble a guide on what not to do, a sort of Minesweeper approach to get the most optimal path.

What is that walkable path? Spend a lot of time planning content. Build confidence. Build a good library. The best platforms spent time curating the content they wanted available, while platforms that failed relied too much on individual series or gimmicks.

Failures

Yahoo! Screen

Fans of the show Community might remember this one. Yahoo! Screen came around a mere two years after Yahoo bought Tumblr, and it marks one of Yahoo’s biggest failures to expand into a market that they couldn’t compete in right after a series of large financial failures.

What did they do wrong? Nearly everything! They didn’t have the funds. They didn’t have a library built in for themselves, like Paramount or Disney did, because Yahoo wasn’t exactly known for producing movies. They didn’t have the talent or money to create many of their own shows or buy pre-existing ones, like Netflix did. They had Community season 6. Even that they later blamed for their failure because it was expensive, but it was one of their main drawing points! Their reaction to Community’s cost peeved off fans of the show, further nailing the coffin. It was a bad investment and a bad idea. It also proved via example that you really can’t just ‘make a streaming service’. Total failure to launch.

Quibi

Quibi lived in a strange in-between world for two years after it’s founding, only to die less than a year after officially launching services. It was competing with some of the best of the best – other programs launched long before 2020, and were much better-established. It credits part of its failure to the pandemic, which sounds a little odd for a streaming service, who arguably did better than most companies during the pandemic, but it makes more sense when you realize the shows were designed to be watched on the go – and on mobile devices. Every Quibi show had a format of 16:9, designed to be watched on a phone’s screen, not a TV. Episodes were ten or so minutes long. Content like that exists, but much of Quibi’s library had to be made specially for Quibi. Interesting concept, great initial execution, but the idea itself didn’t have legs.

Quibi, who was counting on unrealistically high subscriber counts in order to continue functioning, didn’t draw in nearly enough funding in those first crucial months to make it work like Netflix did. Quibi crashed and burned, and then got sold to Roku. At least they didn’t threaten to drag their investors under, like Yahoo! Screens did.

Successes

Crackle

Crackle is actually still up and running, which is incredible because I haven’t seen an ad for Crackle since… ever, I think. Sony is probably Crackle’s most notable owner – it held onto it for years before eventually letting go of the reigns, a slow, gradual transition that likely kept it from pulling a Yahoo! Or a Quibi. Crackle is still up and running today. It even has a surprising amount of Crackle exclusives, and the service seems to be doing as good as ever. Crackle’s only failure is a lack of presence in advertising, but if it’s doing well… why spend money? It’s one of the default options on Roku, which helps a lot.

Netflix

Netflix is one of the first services to ever offer streaming. I’d call it a true success if it weren’t almost always cycling content and bleeding money.

Somehow it keeps happening: they’ll start a series, and end it before it has time to build steam. They’ll make terrible original movies. They’ll lose the rights to series they had previously, and buy series that fans love only to not get full permissions and/or sell them right back. And yet, they survived! They renewed and refreshed their funding with plans to introduce tiered viewing, trimming content, and otherwise making much-needed changes as a platform. If they had worthy competitors during this vulnerable period, who knows if they would have made it?

Even though they’re a pretty stable success now, – what does Netflix do wrong?

Selling content to other streaming services could catch up eventually. They seem a little better about starting insanely expensive projects only to not finish the script/the set/the casting/the series beforehand than they were even a couple years ago, but that could always change. There was a time when industry skeptics genuinely thought Netflix was going to die out because it just wouldn’t stop spending on content indiscriminately. Plus, auto-play on the home screen is really annoying.

Hulu

Hulu is functional. Much like Paramount Plus, it offers an even more hybrid model where bottom tier users see ads, the next tier users don’t, and higher tiers include live TV.

However, they’ve also suffered their fair share of struggles. Poor server balancing meant that even customers with good internet were forced to wait for ads to load and their show to buffer. This is obviously bad. The website was still useable, but it was unpleasant when other options existed in the early days, when Hulu had a free option. Nowadays, it’s much more stable, and therefore much more competitive as well.

Hulu originals don’t have the same draw as Netflix or Amazon originals, but producing your own library is only a bad idea if your service doesn’t have the funding – and Hulu has the funding, plus the means to secure content from channels like Adult Swim and Cinemax. That’s impressive. If Yahoo had managed that, it might still be around.

Break-in Branded Successes

Companies with a lot of preexisting capital and preexisting content libraries that they already own the rights to tend to do better than ones that don’t, all else equal, including time and foothold.

Former Channels

People get frustrated that services like HBO and Paramount won’t share libraries or combine – the primary complaint about streaming nowadays is that the subscriptions are expensive and the good shows are always on the other services, not the one you’re already subscribed to. The periodic drop of episodes instead of the content bombs are also deeply annoying, because the consumer has to either shell out for a subscription to see it new, or wait until it’s all released and then start a free trial to see it. The trade is time or money, and customers are upset! Still, many of them see great success. After all, what are you going to do – go back to cable? Which no longer has all of the shows you like hostage? Hah!

Paramount Plus

Paramount plus acts as the landing site for some pretty big movies once they’re out of theaters, although research says that’s not super important to its desired audience. It’s also surprisingly old! It started as CBS All Access in 2014, before becoming Paramount Plus in 2021.

It’s a hybrid model, much like Hulu. There’s no free version. The basic plan costs about 5$, and comes with ads, but for 10$ you can watch all of CBS’s content library ad-free. This may be part of why it’s less popular than Netflix (assuming the customer likes both content libraries) – it came from the early days of streaming services where you could do that and get away with it, and it never stopped. Is it popular? Yes. Do I personally see ads for it? No. It’s marketing skews towards millennial (and older) men. Live sports are one of it’s biggest draws. It does plenty of business in a market that’s often reluctant to cut cable, so it must be doing something right!

HBO Max

HBO Max is a standout success, and it looks a lot like a less turbulent Netflix. It has a surprisingly diverse library of content and doesn’t seem to be struggling financially. HBO Max is kind of the perfect middle ground between old TV and new streaming services, launched just in time to scoop up people from the pandemic. It was announced in early 2018 but launched in 2020 (the US) and 2021 (globally). It’s a landing site for HBO content, just like Paramount is, and makes content for itself separately from it’s primary channel to give consumers who still have cable a reason to subscribe. Other services that AT&T owned were retired, and their subscribers were funneled towards the newly minted HBO Max. If Netflix was a trailblazer, HBO Max is the 4-wheel drive that gets a much easier ride behind it.  

Amazon Prime (and Streaming)

Amazon’s offerings include many adult-oriented series, a refreshing break in a streaming mush of PG-13. One in particular, their original series Chernobyl, stands out as a brilliant showcase of what Amazon can do with all of it’s funding. Others, including ‘Invincible’ and ‘The Boys’, give lesser-known comic books a chance to stand in a comic book duopoly held by DC and Marvel, a chance they might not have gotten otherwise. It’s a shame that the parent company is the way it is – aspects of their services could be wonderful if they weren’t known for how they treated their workers.

Amazon as a megacorporation is doing what Yahoo! wanted to. The difference is in both funding and management. Where Yahoo couldn’t afford for Tumblr to be unprofitable, Amazon could. It had some runway before the service had to turn around and make money. Therefore, it never got in a fight with a fanbase over what series cost it it’s life.

Disney Plus

Disney owns a lot of media. A lot of media. Its streaming library was already built-in, but it’s constantly adding new series to its long list of IPs. Marvel. Fox. Pixar. Assorted TV shows. All of this, on top of the million-and-one movies they own, makes Disney Plus one of the easiest services to justify, and not just for families.

The issue is that Disney doesn’t want to make series for adults. It wants everything to be PG 13. Ryan Reynolds is refusing to film Deadpool 3 because Disney has suggested that they want it to be PG 13. Now, the first two movies weren’t, so a third movie not keeping pace with the first two is almost certainly going to disappoint – it’s a mystery that they even wanted that, because who goes to see the third movie of a series without seeing at least one of the previous ones?

Anyway, apply that to anything else they make, and Disney’s weaknesses are clear: it’s for the kids and tweens, not the adults who are paying for it. It’s more interested in playing things safe and producing guaranteed hits for kids (who will often watch anything) when the IP’s it purchased were groundbreaking series designed for adults. Deadpool set records for R-rated movies, so to try and pull back, to try and make Deadpool of all heroes play it safe, ­is a sign that Disney has bought things that it doesn’t actually want, but it didn’t want anyone else to have, either. It has too much money. Netflix suffered from the same problem! The Star Wars content is some of the only adult-focused stuff on the platform aside from what they riffled off of Fox’s corpse.

Sources:

https://help.hulu.com/s/article/how-much-does-hulu-cost

https://morningconsult.com/2021/03/01/paramount-plus-streaming-subscriber-demographics/