Ad Tiers Everywhere
Every major streamer except Apple has introduced ad-supported tiers. Netflix's ad plan now captures the majority of new U.S. subscribers.
The End of "Peak TV"
For roughly a decade, Hollywood was in an arms race to produce content. The number of scripted original series climbed each year, reaching a record 599 in 2022.
That trend has now reversed. Several factors drove the correction:
- Streaming services hit saturation in the U.S.
- Investor sentiment shifted to "show us profits"
- Media conglomerates slashed duplicative spending post-merger
- Content budgets tightened across the board
FX's John Landgraf declared 2023 would likely see a decline in total scripted series for the first time in years — and the data confirmed it.
H1 2024 Commissions vs H1 2022
-33%
North American program commissions have dropped by a third compared to Peak TV's height.
Commission Decline by Studio
Ampere Analysis data shows the dramatic pullback across all major content buyers.
The New Streaming Playbook
Password Crackdowns
Netflix's password-sharing crackdown added ~7 million new paying members in Q3 2023. Others are following suit.
Price Hikes
Disney+ raised prices ~40% in 2024. Most services have implemented multiple price increases to boost ARPU.
Fewer Shows, Bigger Bets
Content volume is down, but spending per project remains high. Studios are focusing on franchises and proven IP.
Theatrical Windows Return
After pandemic experimentation, studios restored ~45-day exclusive theatrical windows. Box office runs maximize lifetime value.
Bundling & Licensing
Mini-bundles emerging (Paramount+/Showtime). Studios licensing content to rivals again for quick cash.
Major Studio Snapshots
Netflix
The relative winner. Generating significant free cash flow, re-accelerated subscriber growth post-password crackdown. Content spend steady at ~$17B annually.
Disney
Turbulent 2023 (Iger returned, activist pressure). Cutting $3B from content by 2026. Disney+ losses narrowing via price hikes. Fewer Marvel/Star Wars projects.
Warner Bros. Discovery
~$45B debt burden. Aggressive cost cuts, content removals, project cancellations. DC retooling under James Gunn is a multi-year effort.
Paramount
Merger speculation ongoing. Paramount+ and Showtime merged. Sub-scale streamer struggling against bigger rivals.
Disney's Content Cuts
$3B
Planned reduction in content expenses by 2026 (excluding sports). Fewer originals, more careful vetting of theatrical vs. streaming releases.
"Many in Hollywood have become resigned to the idea that the film and TV business has become permanently smaller — and the heights of dealmaking in 2021 and 2022 will never return."
— LA Times, August 2024The New Normal
The broader industry strategy has shifted from growth-at-all-costs to "profitability and pruning." The new model looks more like Hollywood's older, leaner approach:
- Fewer new series and films greenlit
- Focus on franchises and proven IP
- Renewed emphasis on cash flow over subscriber counts
- Advertising revenue back in the mix
- Secondary licensing markets revived
This means a few hundred series instead of 600. It means $9B domestic box office instead of $11B. But it doesn't mean irrelevance — just recalibration.
Consolidation on the Horizon
Industry insiders widely expect the number of major Hollywood studios to shrink in coming years. Rumors have swirled about:
- Paramount selling assets or combining with another streamer
- Disney potentially spinning off ABC/ESPN
- Lionsgate splitting into separate studio and streaming companies
- More mergers at the mid-tier level
The trend favors scale: streaming economics reward larger, more diversified players.