How Austerity Is Shaping the New Streaming Content Strategy

Note: This article is based on content from Variety Intelligence Platforms special report Dare to Stream, a comprehensive overview of the streaming video business, complete with the latest data from Q1 earnings, available exclusively to subscribers.

Streamings great reset has forced the conventional wisdom regarding content strategy to shift dramatically over the past year.

Chief among these changes is the much-discussed curtailing of Hollywoods runaway content spending, which expanded rapidly amid the peak TV-era run on premium original series. With expenses now being reined in or even reduced at nearly all the major streamers, that supply of new originals will be much less voluminous going forward (even setting aside the potential impact of the writers strike).

Indeed, the last several months have seen a wave of TV cancellations and un-renewals that is, revoking shows new season orders with some being canceled or forced to find new homes mid-production as their distributors cut costs.

And the pullback is already becoming visible: While the number of new titles released on SVOD platforms nearly doubled in 2021, per data from Diesel Labs, that number rose by only about 4% in 2022. Most of the major services also released fewer original TV seasons in Q1 23, both year-over-year and quarter-on-quarter, according to a MoffettNathanson analysis.

This contraction, driven by Wall Streets intensified focus on streaming costs, reflects the new prevailing mentality in Hollywood: Flooding the market with expensive content is far from the most cost-effective way to attract subscribers, necessitating a more efficient approach.

The push to cut costs and boost streaming revenues has impacted studios thinking around library content as well. Where streamers once favored a strict walled-garden approach to lure subs, companies are starting to re-embrace content licensing as a revenue-generating strategy. Many titles are more valuable earning ad dollars on FAST platforms, for instance, than they are to an SVOD library.

Warner Bros. Discovery pioneered this strategy last year, pulling dozens of titles from HBO Max for tax write-offs or to loan out to FAST services, and Paramount Global recently followed suit while downsizing its Showtime OTT platform.

More services libraries are already starting to contract: During Disneys fiscal Q2 earnings call this month, CFO Christine McCarthy announced that we will be removing certain content from our streaming platforms, and that removal process is already underway.

This is the new reality of streaming in Hollywoods age of efficiency: Less content available to view, fewer new titles rolling out and companies programming increasingly scattered across numerous platforms and services. Consumers who had grown used to trading subscription dollars for an endless supply of movies and shows to watch may rapidly have to adjust their expectations.

Plus, dive into the latest expansive special report ...