THB #492: Simplifying The Streaming Conversation

Trying to compare Streaming services, apples-to-apples, is very difficult. Each one reports their results with a different set of details. And the place of DTC in the lives of each corporation is quite different.

I’m trying to cut through all this today…

The unquestionable leader today is Netflix with 260 million worldwide subscribers and about $8.8 billion a quarter in revenue. The password crackdown, primarily, has added about 30 million “new” subs in the last year, though those subs are valued, on average, at $10.56 a month… though the biggest growth has been in Europe (12m) and the EMEA ARPU is $10.75, so not so bad. UCAN (US & Canada) has the highest ARPU ($16.64), but added “only” 5.8 million “new” subs in the last year. And for the record, EMEA now has more subs than UCAN.

Is Amazon’s Prime Video a real #2? (snicker, snicker) Amazon is not forthcoming with details about how Prime Video fits into the 200 million-plus worldwide subscribers to Prime. They used to have only 20% or so usage of Prime Video amongst subscribers, but they seem to have turned that corner effectively. And now, they have added a $3 a month charge for a mostly ad-free experience, though one might argue that Prime have become an all-ad platform, mixing content that is ad-free from Prime with content from other services whose subscriptions one can sign up for through Prime with content that is pay-per-view. Their NFL football package averaged almost 13 million viewers a week.

But… for the purposes of this effort…

Netflix - 180 million international (non-domestic) paid subs ($9.08ARPU)

Amazon - guess!

Disney - 65.2 million international subs for D+ ($5.91 ARPU)
38.3 million international subs in India from HotStar, which they just restructured.

WBD/MAX - 42.5 million international subs… but a measly $3.78 ARPU

Comcast/Peacock has a number of deal for international distribution of content (including a partnership with Paramount), but hasn’t made the leap, really, to becoming a worldwide platform. Comcast CEO Mike Cavanagh confirmed this strategy in December.

I have been arguing for a long time that the Streaming invasion of the international marketplace - without China, of course - is the only way to make the conversion from Legacy to Streaming and win big financially. Just domestic wasn’t worth the trouble. The artificial, but well worn structure of cable/satellite had a huge advantage in its stability. The idea of 5 or 7 or even 3 content entities fighting for a place in a large percentage of monthly family budgets was always a dangerous one. In Legacy, there were always winners and losers… but the new world order screams for WINNERS AND LOSERS.

And that became all the more dramatic when Wall Street woke up to Netflix hitting the sub wall in April 2022 and “the rules to be a winner” went from building subs to getting to profitability. All of the Legacy-founded Streamers seemed to be gearing up to make a big international push… and then, in the name of cutting costs, that almost all went away virtually overnight.

Eventually, they will all need to get serious about international again. Disney+, which is strongest overseas after Netflix, has only a third of Netflix’s subs (I will not count HotStar), but worse, less than a quarter of the gross revenue outside of US/Canada. There has to be at least 60% of an international market for Disney where there is a successful market for Netflix. Has to be. But they just aren’t spending money there that way right now. And India was a quagmire.

So let’s chew on domestic only.

Netflix’s 80 million subs with an ARPU of $16.64 is best domestically too… but the lead on subs is much more in range.

I refuse to count Disney+ and Hulu as separate chunks of subscribers, even though they report it that way. Both D+ and Hulu are now reporting 45 to 46 million subs. The combined ARPU is $20.44, which is a little over the Bundle cost… so maybe 5 million subs are for just one or the other, probably? So let’s guess they have 50 - 60 subs overall as their base.

MAX reports 53 million domestic with an ARPU of $11.29

Paramount+ claims 63 million domestic subs with an ARPU of $8.95.

Peacock is reporting 31 million domestic subs, with an ARPU estimated around $10.

Amazon has subs, but we really don’t know how the service is being used by how many Prime members. AppleTV+ is even less transparent.

The battle, for the moment, is the 3 not-Netflix Streamers who seem to be over 50 million subs domestically, trying to get to at least 70 million domestic subs and eventually closer to Netflix’s 80 million… which is close to the total post-cable-dominant domestic market of realistically addressable households… maybe 90 million, about 20 million lower than the total household reach of cable back in the day.