US Streaming Rivals Unite to Challenge Netflix

US video streaming companies are joining forces to attract new viewers, boost ad sales, and finally turn a profit — something only Netflix has managed to accomplish so far.

Disney Plus, Hulu, and Max, alongside ESPN, Warner Brothers Discovery, and Fox, are forming unlikely alliances in the streaming world.

The primary goal driving these collaborations is financial sustainability. Netflix is the only streamer that has successfully covered the exorbitant production costs required to keep users engaged.

Netflix’s successful run continued in the second quarter, gaining millions of subscribers and earning billions in profit.

By 2024, maintaining multiple streaming accounts may cost more than traditional cable or satellite packages, which once drove viewers to prefer Netflix due to exorbitant pricing.

Jeff Shell, soon to head the new Skydance-Paramount Global group, highlighted that subscribing to numerous platforms is becoming less viable.

“I don’t think it takes rocket science to project that the consumer situation is not sustainable,” he commented.

These bundles are not just about saving customers money; they’re also a smart business strategy, experts say.

“Bundling reduces churn,” explained Mark Boidman of Solomon Partners.

“If you’re going to subscribe to one or two streaming services because they have a show you want right now, it’s very easy to just unsubscribe once you’re done,” Boidman said. With bundling, consumers may think twice before canceling their service, he added.

One example is Comcast’s new StreamSaver package.

For $15 a month on top of your cable TV or internet bill, you get Peacock, Netflix, and AppleTV+ at a price 35 percent cheaper than purchasing each service separately.

Disney+, Hulu, and Max are expected to offer a similar joint discount by late 2024.

“The core business question is, ‘Do I make more money from the new customers or do I lose money from the customers who are underpaying?'” said Michael Smith, a professor of information technology at Carnegie Mellon University.

Aside from Netflix, streaming remains unprofitable for most major platforms, including Peacock and Max, as well as Disney, which promises to return its Plus platform to profitability in the fourth quarter.

Alliances will group more viewers and attract advertising, which is gaining favor, even at Netflix.

These partnerships enable platforms to aggregate audiences that advertisers can target. “This could be very valuable,” Boidman said.

Smith warned, “The challenge is figuring out who gets access to the data and how you share that data between partners.”

“If you split up, who keeps it?” Smith added.

Teaming up can also provide leverage in content purchasing.

ESPN, Warner Bros. Discovery, and Fox have shared few details about their collaboration, which will result in a dedicated sports platform.

Sports rights are often prohibitively expensive, but working together may offer platforms extra leverage in negotiations with leagues and event organizers.