What I Saw at the Streaming Revolution

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In January 2020, Disney+ and Apple TV+ were only a few weeks old, Peacock and the then-unknown HBO Max hadn’t debuted yet, and there was plenty of speculation about an upcoming streaming service that seemed like a joke – but wasn’t. Fast forward to today, Quibi is no longer in operation, but those four other services are still thriving, along with another constant: Buffering, which released its inaugural edition five years ago this month.

Initially, when we introduced our column and newsletter, I expressed that our aim was to monitor the fast-changing landscape of video content production and distribution, as streaming services began to overshadow traditional linear television. As the streaming battle intensified, Buffering sought to function as a guide through these impending conflicts. Since then, we’ve focused on tracking the debut of various streaming platforms from established media companies, and reporting on the unexpected challenges they faced, including COVID-19, mergers, labor disputes, and volatile market fluctuations. We’ve also chronicled Netflix’s tumultuous journey over the past five years as it navigated both new streaming competitors and persistent competition from tech giants like Amazon and Apple. Furthermore, we’ve kept an eye on emerging battlefronts in the digital television war, such as the surge of free streamers like Tubi and the Roku Channel. One thing is clear: The past few years have certainly not been dull.

As Buffering is still young, only celebrating its fifth birthday, my proposals for a primetime special and a series of documentary specials about the early history of this newsletter were politely declined by my superiors at Vulture. However, they have graciously given me permission to commemorate this occasion with a special edition dedicated to five major advancements that have impacted streaming since 2020. This will include insights on what these developments teach us, as well as speculations about future trends in the industry.

1.
Netflix: Dominant then, dominant now

In our initial issue, one of the main articles centered on Netflix breaking a record by earning more Oscar nominations than any other studio or distributor for the first time. This was significant at the time because it suggested that the streaming service would have a major impact on the film industry, similar to how it had already revolutionized television. Fast forward five years, and what stands out to me is Netflix’s continued dominance in Hollywood. Even with some rough patches and the arrival of several tough competitors, Netflix continues to lead the pack. It serves as the standard that all other streaming services are measured against, and its achievements (and missteps) have had a lasting impact on much of what we’ve discussed here in Buffering.

When co-CEO Ted Sarandos opted to replace his longtime deputy Cindy Holland in 2020, it signified Netflix transitioning from its early days of producing premium, critically acclaimed content to resembling a modern-day equivalent of CBS during its Tiffany era – a broadcaster capable of producing shows ranging from comedies like ‘Mister Ed’ and ‘The Beverly Hillbillies’ to the likes of ‘The Twilight Zone’ and ‘Harvest of Shame’. In hindsight, Holland’s departure and Netflix’s shift can also be seen as the start of streaming’s mini Golden Age’s decline. During this period, the industry invested billions not only in content but in creating groundbreaking, star-studded programs that blurred the line between television and film. Pioneering this approach, Netflix attempted to surpass HBO; its move towards the center influenced most of the rest of the industry to follow a similar path.

Over the past five years, we’ve noticed a consistent pattern: Netflix often follows rather than leads, yet its involvement in a new trend can significantly shift the landscape of subscription streaming. This is true for commercial sales, password sharing restrictions, and even the premature ending of successful series. Despite Amazon and Peacock’s long-standing involvement in sports broadcasting, Netflix’s recent Christmas Day doubleheader still felt like a major event. While Netflix may not innovate at the same pace as before, its actions tend to create the biggest ripples in the streaming industry.

The latest earnings report from the streaming service Netflix emphasizes its remarkable success. Last year, the company added over 40 million new subscribers, with 19 million joining in just the last quarter. As a result, it now boasts more than 300 million paying customers worldwide, providing access to over half a billion potential viewers. While many of its competitors are still struggling financially or barely breaking even, Netflix has transformed into a financial powerhouse. Rather than losing billions each year as it did five years ago, the company is now projected to make profits exceeding $40 billion in 2025. With continuous growth and double-digit profit margins, analyst Jeffrey Wlodarczak of Pivotal Research Group commented that “this is what winning looks like.” This was true when Buffering first launched in 2020, but the point is that despite numerous competitors, heavy spending from tech giants Amazon and Apple, and the traditional challenges of the entertainment industry, Netflix continues to thrive. (And yes, this applies to its Oscar nominations too. It once again led all individual studios in nominations.)

➼ Over the Next Five Years: As Netflix transforms from a trendy symbol of future TV into an everyday term for television, might its popularity among viewers and content creators eventually decline – or will Netflix once again defy expectations and demonstrate that it can continue to surprise those who doubt it?

2.
Streaming became more like linear TV rather than the other way around

By the onset of the 2020s, there remained an air of novelty surrounding digital, on-demand television, distinctly different from traditional TV since the 1950s. Unlike its predecessor, it lacked channels or scheduled time slots, and major streaming platforms eschewed commercials entirely. Moreover, compared to cable subscriptions, it was significantly more affordable. However, as it turns out, the trajectory of television on a small screen doesn’t deviate too much from the norm, and in the case of streaming services, it seems to revert back towards the average.

Disney+ leading the shift towards an ad-supported tier, followed by Netflix and Amazon Prime Video, is a clear illustration of the industry’s transition into a network-like structure. This transformation isn’t limited to these three players; many other new streamers have adopted similar strategies.

For instance, instead of following Netflix’s binge-release strategy for most of their new content, these newcomers opted to maintain the traditional weekly release of episodes for shows. In contrast to prioritizing expensive scripted programming, they began investing in live sports, reality shows, and true-crime documentaries which are less costly. Instead of relying on low prices to attract and retain customers, these platforms raised their monthly subscription fees significantly while reducing the number of new productions they greenlit and the size of their libraries containing older TV shows and movies.

When these price hikes and content reductions met consumer resistance, the streamers borrowed a strategy from old cable TV: offering discounts to consumers who subscribe to multiple services simultaneously as a bundle deal.

It was essentially predictable that the transition into streaming by media titans like Comcast, Warner Bros. Discovery, and Paramount Global would be unavoidable. These companies have been dominating the linear-TV industry for years, so it’s no surprise they brought their established practices along. However, this isn’t necessarily a negative development, as we can see from how swiftly tech-driven streamers have incorporated many of these strategies. While Apple may have once encouraged us to ‘Think Different’, its entertainment division recognized that a series like ‘Ted Lasso’ required the kind of word-of-mouth momentum that is best cultivated through weekly episode releases. Although advertisements can be frustrating, even when you’re already subscribed, cable managed to flourish for decades thanks to this very combination of commercials and subscription fees. At least with streaming, there’s the flexibility to upgrade to an ad-free experience or temporarily cancel your subscription if a streamer’s content isn’t meeting your expectations.

It appears that for numerous consumers, the rise of streaming services may seem like a cunning move by executives to boost profits at the expense of consumers. While it’s true that some level of incompetence and greed can be found within Hollywood, it’s important to note that when streamers initially entered the market, they were priced significantly lower than the quantity and quality of programming they provided compared to traditional cable costs. Companies like Netflix accumulated massive losses in an attempt to hook you on their streaming paradise, and legacy media companies also went deep into debt during this competitive period – with most still struggling financially or just beginning to see small profits. The era when you could subscribe to Netflix or Hulu for less than $20, accessing almost every show and movie you desired, plus binge-watch the latest season of Breaking Bad or Mad Men a few months after its finale – this was unsustainable. This wasn’t due to the actions of executives like David Zaslav who may be perceived as antagonistic towards certain fanbases; rather, streaming needed to evolve into a more conventional TV model because it required profitability. If there’s one thing traditional TV networks and cable were proficient at, it was making money.

➼ Over the Next Five Years: Will audiences react negatively if prices rise too much or commercial volume on streaming services increases to match cable levels? Or will the predicted consolidation of streaming platforms and bundling of services lead to a balance where consumers feel they are not being overcharged excessively?

3.
Free streaming took off

2019 marked the beginning of significant expansion for free, ad-supported streaming (FAST), with the acquisition of Pluto TV by Paramount Global and Tubi by Rupert Murdoch shortly after Buffering’s debut in 2020. This period saw these services grow exponentially due to improved programming quality and broader content offerings, thanks to backing from larger companies. Additionally, Amazon’s early ventures into the FAST market with IMDb TV (now Freevee) and investments by device manufacturers like Roku and Samsung in their free streaming platforms contributed significantly to this growth trend.

Initially, FAST platforms (also known as ad-supported video on demand or AVOD) were primarily used by studios and content owners as a way to earn some additional advertising revenue by placing their content libraries on streaming services. While popular shows like “Friends” or “Seinfeld” can generate hundreds of millions in licensing fees for platforms such as Max or Netflix, most subscription-based streamers are not willing to spend much money acquiring the exclusive rights to older series like “Hell’s Kitchen” or random 1980s comedies. However, as consumers grew tired of the cost and decision fatigue associated with SVOD platforms and Peak TV, FAST has evolved beyond being just a budget-bin alternative for on-demand content.

FAST platforms have found success in offering entertaining content, particularly with shows like “Jury Duty” on Freevee, the “Weird” Al biopic on Roku Channel, and Tubi’s collection of niche, low-budget movies. Furthermore, as studios such as Warner Bros. and Disney search for new revenue streams to make streaming profitable, they have become more motivated to mine their libraries for titles that can be licensed to FAST and monetized.

The success of FAST (Free Ad-Supported Streaming Television) sector is undoubtedly evident, but it’s still a dynamic and evolving landscape. Reports suggest that the new management at Paramount Global might be contemplating a move to shrink Pluto TV into a feature on Paramount+. On the other hand, Amazon has closed Freevee as an independent brand, owing partly to their choice to make commercials the default option on Prime Video, reducing the necessity for a distinct app dedicated to ad-supported TV. However, Amazon continues to produce shows that can be accessed without a Prime Video subscription. Meanwhile, Tubi and Roku Channel are steadily growing in popularity, capturing more viewing time than services like Peacock, Paramount+, or Max, according to Nielsen’s latest monthly streaming viewership survey.

➼Over the Next Five Years: Could it be that Amazon and Paramount scaling back their free streaming services will slow down the rapid expansion of Free Ad-Supported Streaming Television (FAST)? Might we witness further consolidation in this sector as a result? Additionally, could there potentially emerge a “freemium” model in streaming, where users pay around $3-$4 per month to access a diverse range of FAST content but with significantly less advertising?

4.
First-run movies became more essential to streaming

During his two-year tenure as CEO of WarnerMedia (now known as Warner Bros. Discovery), Jason Kilar made a significant decision that significantly influenced the streaming industry. This was the implementation of “Project Popcorn,” an initiative launched during the COVID-19 era, which released nearly every 2021 Warner Bros. Pictures title on HBO Max on the same day they debuted in cinemas. This move proved particularly beneficial for subscribers, including those who were hesitant to return to theaters due to the ongoing pandemic, as it provided them with access to new-release movies almost monthly without any additional cost.

It’s clear that the idea of releasing movies on TV before they hit theaters was met with strong resistance, particularly from Christopher Nolan and theater owners. This proposal was essentially a significant challenge to the traditional 30-day theatrical release window for films. Sources claimed that Kilar had jeopardized the film industry forever, despite Kilar clarifying that Project Popcorn was a temporary measure to address pandemic-related issues and potentially boost HBO Max’s subscription base. Interestingly, Warner Bros. returned to the practice of giving movies an exclusive theatrical release in 2022, with films like WB’s Barbie still earning billions in 2023 and beyond. However, Kilar was let go after Discovery and WB merged in 2022.

Despite the alarmists who claimed Kilar had doomed movies forever being off-base, it’s accurate that Kilar’s emphasis on Project Popcorn, along with some other decisions during the pandemic, have significantly boosted the significance of first-run movies in the programming strategies for streaming services. While theatrical films have always been an integral part of streaming since Netflix Instant, major titles typically didn’t become available until six months or more after their release in cinemas. However, this has shifted drastically over the past few years. Before Kilar made his move, Universal had already leveraged COVID to persuade theater owners to let them sell new releases on streaming just a month after they premiered in theaters. This action by Universal and WB encouraged Disney and Paramount to shorten their release windows as well. Consequently, it’s no longer surprising to see hit movies appear on subscription streaming services six to eight weeks after their theater debut, and only a few weeks after they become available for purchase or rental on digital platforms.

I admire those in the film industry who believe it’s still irrational to distribute movies on subscription streaming so quickly following their theater debuts. However, many large movie theaters remove all but the largest films from screens just a few weeks after they premiere. I understand the desire to keep blockbusters like “Barbie” or “Oppenheimer” off TV for five or six months, but for most movies, there’s a significant advantage in releasing them on SVOD (streaming video on demand) relatively soon after their release: The marketing for the theatrical run is still fresh in potential viewers’ minds. This theoretically makes it more likely that people will decide to watch the film when it becomes available for streaming or feel they’re getting good value for their subscription money (rather than just another title in a list). Given the decline of Peak TV and fewer new series premiering each month, streamers need ways to prevent subscribers from canceling. First-run releases can be effective tools to achieve this goal. Some of the most popular titles on Nielsen’s weekly top-ten lists have been newer movies, especially those with family-friendly appeal.

After the completion of a project, companies such as Comcast-owned NBCUniversal have discovered another method to maximize profits from shorter release windows they’ve created. Typically, their Universal and Focus films debut on sister streaming platform Peacock within two to four months following their theater run. Later, after an additional four months, these movies are licensed to Amazon Prime Video for a ten-month exclusive streaming period. However, if the movies didn’t join Peacock until six or nine months post-release (similar to the premium cable era), they would be considered “older” films, and Amazon would pay significantly less for them. Consequently, the advantage to Peacock would also decrease as well.

➼Over the Next Five Years: Is it Likely that Netflix will Reach an Agreement with Movie Theaters to Broadcast Their Major Films? As the window for movies shrinking, there is speculation about whether Netflix will compromise with cinema chains and find a method to allow their major films a wide theatrical release. A deal to show Greta Gerwig’s next film on IMAX screens a month before it becomes streamable has sparked optimism among some in the film industry regarding a truce, though Netflix executives maintain that no such change is imminent at this time.

5.
Gravity came for the streaming business

In the early 1990s, when I was starting out as a TV journalist, an executive whose name I can’t remember shared something that sounded like a groundbreaking observation: “Television is cyclical in nature.” This meant that even though networks like NBC were thriving at the time, it was likely that one of its smaller competitors would stage an incredible resurgence within a few years, making NBC seem less dominant. Then, as if following a pattern, this cycle would repeat itself all over again.

Initially, it appeared that the streaming industry would avoid the cycle of growth followed by decline: Streaming platforms were expected to continually expand, pushing traditional TV further towards obsolescence. However, this was never the reality, and over the past five years, we’ve noticed individual streaming platforms settling into recurring patterns. For example, Disney+ made a swift entrance but experienced a slump under its short-term CEO Bob Chapek for about two years before experiencing a significant resurgence in 2024. HBO Max and Peacock started slowly but have since found their footing, though their long-term future as standalone apps is uncertain. Apple and Amazon have also had mixed fortunes. Even the dominant Netflix faced challenges when subscriber growth plateaued, causing uncertainty on Wall Street about streaming’s future. Although the top position in streaming hasn’t changed dramatically like network rankings do – Netflix remains the industry leader – overall, success in this business is more dependent on hit shows and movies, as well as profitability, rather than the number of new subscribers acquired within a quarter.

➼ Over the Next Five Years:

It’s important to note that streaming services aren’t as stable as network TV was in the 1960s and ’70s. Back then, it was assumed that all major networks would still be around, even if not all were incredibly successful each year. While Netflix might be a strong contender for such stability due to its dominance, the streaming industry is still volatile with plenty of uncertainty.

For instance, Disney could decide to merge Hulu into Disney+, or Apple’s CEO, Tim Cook, could realize that Hollywood’s noise is too much of a distraction, even with growing buzz and critical acclaim for Apple TV+’s programming. More likely, we’ll see one or more medium-to-small players like Max, Peacock, Paramount+, Starz, or AMC+ either disappear or merge into a larger platform to stay competitive in the streaming market.

Despite the possibility that some platforms may follow Quibi’s path or consolidate, it’s clear that the broader streaming industry has solidified its position. When Buffering first launched at the start of the 2020s, executives from linear networks often emphasized that more people still paid for cable than subscribed to Netflix, and that traditional TV viewing time far outweighed streaming. However, fast-forward to today, it’s not surprising to learn that Netflix has surpassed the cable bundle, and according to Nielsen, streaming accounts for 43.3% of all U.S. viewing – just slightly less than the combined audience for broadcast (22.4%) and cable (23.8%). Although we may not know the long-term fate of every platform except Netflix, one thing is clear: Streaming is no longer the television of tomorrow; it is television itself.

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2025-01-31 00:57