Streaming Slams Into a Wall: Netflix Woes, CNN+ Shutdown Illustrate New Economic Realities
variety.comTodd Spangler NY Digital EditorAfter years of companies spending like drunken sailors on streaming video, some are now suffering hangovers.Netflix, in the first quarter of 2022, lost customers for the first time in more than a decade.
It could shed 2 million more in Q2. The streaming giant is scrambling to find new sources of revenue growth, with execs hoping to monetize password-sharing freeloaders and — previously unthinkable at the Big Red N — planning to introduce advertising-supported plans.CNN+, hailed as a bridge to the news cabler’s future, is DOA: It’s getting axed 32 days after launch under new management at Warner Bros.
Discovery. The WBD team led by CEO David Zaslav quickly decided to cut their losses with CNN+, concluding the service simply wouldn’t draw enough viewers to sustain a budget reported to be $1 billion over four years.
Taken together, the events suggest that the speculative, spend-big-at-all-costs era of streaming video is over. Indeed, the sector is showing signs of “stream cutting,” says Scott Purdy, KPMG’s national media industry leader.“What you are facing is a period of no growth or slow growth that people had thought was five years out — but is happening now,” he says. “There’s no room in the U.S.
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