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I invite him. The broadcast wars are over. 2019-2023. to cut.

The race is over for the largest media and entertainment companies to add subscribers via streaming, knowing that consumers will only pay for a limited number of them. Sure, the participants are still running. They just don’t try to win anymore.

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Disney The main streaming service, Disney+, reported losing 4 million subscribers during the first three months of the year, dropping the company’s total streaming subscribers to 157.8 million from 161.8 million. Disney lost 4.6 million customers due to India’s streaming service, Disney+ Hotstar. In the US and Canada, Disney+ lost 600,000 subscribers.

It’s becoming clear that the biggest media and entertainment companies operate in a world where there’s no longer significant stream subscriber growth – and they’re just not aggressively chasing it. Netflix It added 1.75 million subscribers in the first quarter, bringing the worldwide total to 232.5 million. Discovery Warner Brothers It added 1.6 million to the land at 97.6 million.

The current big media narrative is about flow to profitability. Warner Bros. Discovery announced last week that its US direct-to-consumer business reported $50 million in revenue in the quarter and will remain profitable this year. Netflix’s streaming business has become profitable during the pandemic. Disney announced Wednesday that broadcast losses narrowed to $659 million from $887 million.

Read more: Iger pays tribute to Universal’s Super Mario Bros

Netflix limited content spending growth, and Warner Bros. Discovery and Disney have both reported thousands of job cuts and billions of dollars in content spending cuts in recent months. CFO Christine McCarthy said during an earnings conference call Wednesday that Disney will “produce less content” going forward, though CEO Bob Iger indicated he doesn’t think that will have an impact on global subscriber growth. .

There is still some growth among young players. NBC Universal Peacock acquired 2 million subscribers last quarter, giving it 22 million subscribers. Paramount Global It added 4.1 million subscribers in the quarterwhich puts it at 60 million subscribers.

But the main question isn’t so much about the growth numbers as it is about the investor’s reaction to the growth numbers. Paramount Global stock fell 28% in one day last week after the company announced it would cut its dividend from 25 cents per share to 5 cents per share to save cash.

Disney + Hotstar subscribers brought in 59 cents a month in revenue last quarter, down from 74 cents last quarter. Disney doesn’t seem to agree with losing these low-paying customers. Disney gave up the rights to broadcast cricket in the Indian Premier League last year. Those rights were acquired for $2.6 billion by Viacom18, of which Paramount Global owns a minority stake.

Disney also announced that it is raising the price of its ad-free Disney+ service later this year. Disney’s average revenue per user for US and Canadian subscribers rose 20% in the most recent quarter after announcing another price increase last year. Big price hikes are usually not the strategy executives use if adding subscribers is the priority.

What then?

Raising prices and lowering costs is not a great growth strategy. Flow was a growth strategy. Maybe you’ll come back a bit with cheaper ad levels and an imminent Netflix password-sharing campaign.

But growth is unlikely to return to levels seen during the pandemic and the early years of the mass influx.

It probably means that the media and entertainment industry will need a new growth story soon.

The most obvious candidate is gaming. Netflix launched a fledgling video game service. Comcast I considered buying an EA last yearas first reported by Puck. Microsoft’s deal for Activision is now in jeopardy after UK regulators blocked the deal. If this acquisition fails, Activision They can instantly be a target for legacy media companies as they look for a more interesting story to tell their investors.

While Disney shut down its metaverse division as part of recent cost cuts, the marriage of intellectual property rights and games seems like an obvious match. One could easily imagine the growth potential of Disney buying something like Epic Games, which owns Fortnite, and building their version of an interactive universe through games.

More consolidation will eventually happen between the legacy media companies. But it could start a major game acquisition in the industry.

Perhaps The Gaming Wars will be the next chapter.

Disclosure: NBCUniversal is the parent company of Peacock and CNBC.


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