If you’ve been following television news in the past few months, you may have noticed people talking about something called “The Streaming Wars,” with lot of headlines discussing new platforms, overall deals, contracts, show cancellations, et cetera. The name “Streaming Wars” is a bit of a misnomer, because the current environment of the television industry has less to do with fights between streaming providers (though there have been some recent lawsuits), and more to do with the rapid growth of the streaming industry, and the increase of competition in the market. A recent study presented at the Code Media conference in Hollywood last month shows that the growth within the streaming industry is even larger than you may have first thought.
The study, which was presented by analyst Michael Nathanson of MoffettNathanson Research, shows that though companies like Disney, WarnerMedia and Netflix will be making huge sums of money off of streaming, they will also be spending a significant amount more to provide more content for their audiences. Nathanson estimates that the increase in spending from these three companies combined could reach up to $16.2 billion. Compare this to Disney’s current annual television budget at $13.6 billion.
The “war” part of the Streaming Wars comes into play when these three media giants start competing with each other to attract potential cord-cutters in the next four years. Nathanson argues that people who do not regularly watch live sports or television news are the most likely to cancel plans with their traditional television providers and switch to streaming. Nathanson’s research shows that about 14% of U.S. pay TV households do not regularly watch news or sports, meaning that about 13 million people could cut the cord in the next four years.
But will this predicted trend of increased spending continue beyond the next four years? Recode Senior Correspondent Peter Kafka expressed his skepticism, stating, “That spending boom seems very unlikely to continue in the long run; most people I talk to in the industry assume we are in a land grab phase and that things will become more rational as winners and losers shake out.” However, Kafka ensured readers of a positive immediate impact on the industry, saying that the spending boom “is almost certainly going to benefit you, the viewer,” providing you with a wealth of television options and no lack of variety in content. You can watch the full research presentation from the conference below.