Major streaming services, including Netflix, Prime Video, HBO, and Disney+, are grappling with a significant decline in profits, marking a drastic shift in the industry. The transformation of content production and distribution has raised concerns about the system’s functionality, as reported by Vulture.
The changing landscape of streaming platforms has had a ripple effect on the entire audiovisual industry. Bloomberg reveals that economic profits for digital platforms have plummeted by 90% since 2013, when they reached a staggering $23.4 billion. Currently, overall profits do not exceed $2.6 billion.
Amid this profit debacle, Amazon’s CEO, Andy Jassy, has taken steps to investigate the expenditures on original programming within their Hollywood studio. Jassy aims to identify the underlying causes of the issue and has requested analyses of recent project budgets.
To address the problem, Amazon is reportedly planning to eliminate 27,000 jobs and has already scrapped 37 projects deemed unnecessary. The notion of “unnecessary” centers around the economic results and audience response to the latest content on streaming platforms.
To remain competitive, HBO has rebranded itself as Max, Netflix has discontinued its cheapest plan in Canada, and Disney has initiated substantial budget cuts. These companies are focusing on retaining profitable subscription plans, including those with advertisements, priced at 5.49 euros and 12.99 euros per month.
The struggle to maintain profitability underscores the need for streaming services to re-evaluate their content strategies and adapt to changing consumer preferences in order to thrive in an increasingly competitive market.
