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Video killed the cable TV star

For the first time in US history, streaming video is now bigger than cable television. No wonder companies like Disney, Netflix, and even Walmart are fanning the streaming wars into a white-hot contest.

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    The day most media conglomerates knew was coming is here. For the first time in US history, streaming is now bigger than cable television.

    That revelation came out of a Nielsen report released this week, which showed that US streaming viewership outpaced both broadcast and cable viewing in July. Even more surprising is that the average of 190.9 billion minutes of streaming watched per week last month in the US is far ahead of the numbers racked up during covid-19 lockdowns, when the highest viewership ran to 169.9 billion minutes.

    The gradual shift of home entertainment from broadcast and cable will now pick up even more speed, as the fight for audiences intensifies. There are surprising new entrants, for instance. Walmart’s new $13-a-month shopping and delivery subscription service, Walmart+, is designed to compete with Amazon Prime—and like Amazon Prime, it will include not just faster shipping but also video streaming, courtesy of a deal with Paramount+. Walmart previously had its own video service, Vudu, but made the ill-timed decision to sell it to Fandango in early 2020, just before the pandemic boosted streaming viewership.

    Meanwhile, Netflix finally lost its position as the streaming service with the most subscribers, after Disney revealed it had amassed 221 million subscribers across its various platforms, including Disney+, Hulu, and ESPN+. The next shoe to drop will be the debut of a streaming platform that will combine Warner Bros.’s HBO Max and Discovery+ services under a new, unified brand in 2023, with the aim of reaching 130 million subscribers by 2025.

    The white heat of these streaming wars is being fanned by several factors. We grew hooked to our platforms during the pandemic—a sign to companies that there’s steady money to be made here. (Snap, seeing its advertising wane amidst fears of a recession, is doubling down on Snap Originals.) At the same time, there are so many streaming options out there today that every user must be fought for—particularly in a time of inflation, when people are watching what they spend.


    TIME FOR A COMMERCIAL BREAK

    As the competition intensifies, the subscription streaming world is being forced to look for new ways to grow. Some companies are turning to ad-supported service tiers, offered at lower prices for those who can bear a smear of marketing instead of the familiar, ad-free experience.

    Disney+ plans to roll out its ad-supported service on Dec. 8. Netflix, whose CEO Reed Hastings once vowed to never run ads, will launch its version in early 2023. Hulu started in 2008 as a free, ad-supported streaming service; it added paid tiers in 2015.

    Image copyright: Adario Strange

    At some point soon, we will want to watch so many things on so many different platforms that subscribing to them all—even at the reduced, ad-supported fee—will be very expensive. Analysts expect the eventual emergence of streaming “super bundles,” which will allow viewers to combine various services across brands for a flat fee. But it’s early in the streaming wars, so these bundles are still a few years away. Meanwhile, the major streamers will continue to fight for market share, treating eyeballs as just one among several data points. Ad revenue will increasingly become another crucial metric.


    JUST NOT CRICKET

    The streaming business is a global one, so sometimes its evolution is determined by the most unexpected things.

    Take cricket, for instance—a sport beloved across the former British empire. The longest form of cricket lasts five days, but the shortest is a snappy, fierce couple of hours. One tournament in the latter format, the Indian Premier League (IPL), has grown wildly successful in the last decade and a half. On a per-game basis, the IPL is the second-most valuable sports league in the world, behind the National Football League. It helps that the IPL is played in India, a country of more than a billion cricket fans—and a market that makes streamers salivate.

    When Disney announced that it had 221 million subscribers worldwide, it was counting the 50 million who pay for Hotstar, Disney’s Indian platform. For years, Hotstar has been streaming the IPL, but this past June, it backed away from the auction for the next round of streaming rights, claiming the deal had gotten too rich for its taste. (The rights eventually sold for $2.6 billion to Viacom18, a joint venture between Paramount Global and Reliance Industries.)

    How many of Hotstar’s 50 million will stop subscribing now that the IPL isn’t on the platform any more? It’s difficult to say, but if Disney has slipped back behind Netflix by this time next year, it may well be because of a sport that most Americans have barely heard of, let alone understand.



    BY THE NUMBERS

    190.9 billion: Average number of minutes of streamed video content per week in the US

    $20: Monthly price of the most expensive streaming service, Netflix Premium

    35%: Share of streaming viewers, compared to 34% watching cable and 22% watching broadcast TV in July 2022

    $90 million: The sum that Warner Bros. Discovery lost on its canceled direct-to-streaming Batgirl movie

    221 million: Disney subscribers worldwide, beating out Netflix at 220 million


    ONE 🐔 THING

    Among the unlikelier companies to have ventured into the movie business (and there are many!) is Chicken Soup for the Soul, which grew out of the eponymous series of self-help books. Over the years, Chicken Soup has been building its entertainment business slowly: a share in the streaming platform Crackle here, a purchase of the online video service Popcornflix there. It has snapped up film and TV catalogs and a film distributor, 1091 Pictures. In May, Chicken Soup bought Redbox, which sells and rents DVDs through its 38,000 or so kiosks across the US. What Chicken Soup wants with DVDs—a medium that looks more and more musty with each passing day of the streaming era—is difficult to guess. But if Chicken Soup for the Soul has taught us anything, it is that positive thinking can achieve anything—perhaps even a revival of the DVD.


    QUARTZ STORIES TO SPARK CONVERSATION


    5 GREAT STORIES FROM ELSEWHERE

    🎵 The audio meme. TikTok is a different kind of streaming giant, serving up shorter videos than the erstwhile Quibi, to more users—more than five times more, in fact—than Disney. One of TikTok’s signatures is the audio meme, the snatch of music, sound, or dialogue that other users lay over their own videos. Why do we latch onto these so much? A New York Times Magazine article explores the history of the audio meme and the physiology of its unconscious appeal.

    📰 How to kill a newspaper. Up in the mountains of Colorado, the Aspen Times began publishing in 1881. Through the decades, it patiently cataloged its town’s transition into a swish ski resort and then a stage for festivals of ideas. In The Atlantic, Andrew Travers, a former editor of the newspaper, describes how its corporate owner muzzled reporting on a Russian billionaire. This isn’t just about the silencing of a single story; it’s about the deliberate destruction of the ethos of news, and the co-option of local newspapers into bigger, grislier geopolitical games.

    🚀 Patriot games. If a company wants to bid on a Pentagon contract—to repair planes, or to make spare parts, for example—it needs, first, to know what the work will involve. For years, a family called the Poseys ran a business in which they gathered unclassified technical information like manuals and spec lists, to sell them to aspiring Pentagon contractors. But as WIRED reveals, the Poseys soon found an easier way to get this material: through Freedom of Information Act requests. Were the Poseys radical believers in transparency, or were they rank opportunists?

    💉 Polio, redux. In London and New York, authorities have found traces of the virus that causes polio, a disease from which the US and the UK have been free for a decade or more. Why did this dormant disease reappear? Part of the answer lies in dipping childhood vaccination rates. As a result, ProPublica says, “nationally and globally, there are signs that the pandemic has opened up new vulnerabilities to diseases long in retreat.”

    💰 Up in smoke. Two graduates from Andover start a crypto hedge fund in Singapore, called Three Arrows Capital. During the pandemic, they flourish, as investors with stimulus checks buy crypto. They bet on a particular form of bitcoin. They buy mansions and a yacht. And then, as New York Magazine lays out in gory detail, the geniuses run into trouble. Just another trillion-dollar vaporization in the markets of the 21st century.


    Have a bingeworthy weekend,

    — Adario Strange, media and entertainment reporter, and Samanth Subramanian, senior economics and finance reporter

    Additional contributions by Alex Citrin-Safadi

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