At the end of 2020, I made a few predictions for the year ahead. I did pretty well, forecasting Netflix would expand beyond TV and movies. Apple and Amazon would invest more resources into podcasts, and social media sites would try to sell you a lot more goods. I was a little too optimistic about Disney+ and the end of the pandemic, as were a lot of people.
As we enter the first work week of 2022, I am going to pair each prediction with a related question about the year ahead.
It will be a bumpy year for streaming services in the U.S. New services Disney+, HBO Max, Paramount+, Peacock and Apple TV+ have all added millions of customers over the past couple of years thanks to marketing campaigns and splashy shows. Netflix, Amazon, and Hulu have continued to grow and remain market leaders.
Yet while the overall number of streaming subscriptions continues to grow. the pace of growth has tempered, at least in the U.S. Netflix’s growth has slowed to a trickle. and Disney+ has been unable to sustain its initial pace. Most people in the U.S. already pay for a streaming service (or several). and there are still tens of millions of households that pay for cable or satellite. Streaming’s share of overall viewership in the U.S. has been stagnant for months now.
Streaming wars were always a bit of a misnomer, but we have entered more of a combat portion. The services aren’t just fighting to get people to shift from cable to the internet now. They are competing with one another for attention and share of wallet. That means services will thrive when they have a big new hit, but slow down when they don’t.
Which streaming service will have the most success outside the U.S.? The solution for slowing growth at home is overseas expansion. Netflix has a huge head start. It ended 2021 with about 140 million customers outside the U.S. which is more customers than any of its biggest rivals have in total, saves for maybe Amazon. All of Netflix’s competitors know they need to invest more resources abroad. Disney+ already has a lot of customers in India, but it will need to hold onto cricket rights to keep them. HBO Max is in the early stages of expanding in Europe and Latin America. while Peacock and Paramount+ have joined forces abroad.
Expect to hear these services talk up original series in other languages. as well as partnerships with mobile operators and alternate payment options. It took Netflix years to figure out many foreign markets.
Netflix will add more sports programming – but not a lot of live rights. We’ve been waiting years for a big tech company to buy the rights to “Monday Night Football” or the NBA Finals. They haven’t bought many major events, though Amazon has begun to experiment. Netflix is the least likely of the tech powers to buy rights to games from a major U.S. sports league given the cost and geographical limitations of those events. But it will explore deals for global rights to an entire sport. Co-founder Reed Hastings has already said the company would consider bidding on the rights to Formula One. which become available in much of the world at the end of 2022.
Speaking of Formula One, Netflix will create more programs like “F1: Drive to Survive.” That show made Formula One relevant to a whole new generation of viewers. many of whom lived in places that never cared about the sport (like the U.S.). Other sports took notice and are now trying to do the same version. Golf is already doing a show with Netflix, and I wouldn’t be shocked to see the NBA explore a show as well.
Will Apple or Amazon snag NBA rights? The NBA is the next big sports rights package to come to market and is said to want $8 billion a year across its deals. Most people expect Turner and ESPN to retain their rights. but the NBA could go the way of the NFL and carve off yet another package for Silicon Valley. If the league does, it will try to entice basketball super fan Eddy Cue and Apple to make a bid. Or Amazon, which already has an NFL package. (John Ourand predicted Amazon would buy a stake in the NFL’s media business.)
Spotify will have a new favorite buzzword: creator. In the first phase of its plan to take over podcasting. Spotify signed up big names like Michelle Obama, Joe Rogan, and Dax Shepard. These hosts delivered large audiences that now use Spotify as their default podcast service. Chief Executive Officer Daniel Ek often compared Spotify to Netflix. which shifted from distributing other companies’ TV shows to making its own.
But original podcasts are a smaller part of Spotify’s future plans. While Ek used to talk about being like Netflix, he’s now focused on being more like YouTube. Ek wants audio creators to view Spotify like video creators have viewed the Google-owned site. the best way to aggregate an audience and profit from it. That means Spotify will talk a lot more about creating tools and features that anyone — not just a former first lady — can use to release shows on Spotify. While Spotify’s investment in original podcasts will keep going up. it will shrink as a percentage of the company’s overall investment.
Will the long-awaited boom in podcasting advertising finally happen? Podcasting is still a small business – tiny, some might say. Advertising sales for the entire podcasting business in the U.S. are expected to surpass $1 billion for the first time in 2021. Apple Inc. makes about that much revenue every day from its other businesses. It’s no wonder the iPhone maker has invested so little money into an industry it helped create. Spotify (and Amazon) are buying up podcasting companies. because they believe billions of dollars will soon flow from radio into online audio. (Most estimates put the radio advertising market at just shy of $20 billion.)
The concert business will return to normal. Echoing Micah Singleton, the concert business is in line for a record year in 2022, pending new variants. Ticket sales were strong in the final quarter of 2021 — to the tune of $1.34 billion — and many of the biggest acts in the world are planning to hit the road this year. That includes The Weeknd, Bad Bunny, Billie Eilish, Dua Lipa, Justin Bieber, and Olivia Rodrigo. As much as Mark Zuckerberg wants us all to embrace the metaverse. there is no alternative to the in-person experience.
How much will the movie industry bounce back? Movie studios that tried to release blockbusters in theaters in 2021 lost money. Ticket sales ended the year down about 60% from a year ago in North America, and only one movie crossed the $ 1 billion threshold. But that movie, “Spider-Man: No Way Home,” has given studios confidence. It is already one of the 20 biggest movies of all time even though it came out at the beginning of the omicron spike. Hollywood studios plan to release their biggest films in theaters for an exclusive period of time in 2022. That means people will need to go to the local theater to see “The Batman,” “Sonic the Hedgehog 2,” “Top Gun: Maverick” and “Jurassic World Dominion” on opening weekend. Unlike concerts, customers do have a lot of options at home. Every major media company is going to release titles online.
Top executives will leave Disney, Warner Bros., NBCUniversal, and just about every major media company. Leadership at the top of major media companies and Hollywood studios didn’t change very often when pay TV was booming. Guys like Les Moonves, Steve Burke, Bob Iger, Sumner Redstone, Jeff Bewkes, and Rupert Murdoch ran the biggest companies for more than a decade. So did guys — all guys — who worked for them like Brad Grey, Tom Rothman, Jim Gianopulos, and Richard Plepler. But streaming has given way to waves of consolidation, followed by reorganizations. It’s now rare for a top executive at a legacy media to hold a job for very long.
Expect that to continue since there are a bunch of smaller players (like Lions Gate and AMC Networks) itching to sell. and new leaders (like Bob Chapek and David Zaslav) still figuring out their strategies. Chapek already reorganized Disney to put his top lieutenant Kareem Daniel in charge of the streaming business. but that move aggravated the former Fox executives who ran things on the TV side. Executives like Peter Rice and John Landgraf were used to having a lot more autonomy and power than they do now. Zaslav is about to fire a lot of people at WarnerMedia Discovery, and rejigger the executive ranks of that company (yet again). While Jason Kilar is expected to leave and Casey Bloys and Jeff Zucker to stay, we don’t know what will happen with others.
Will Roku Become/Buy a Media Company? Roku is known for selling devices, but the company’s hardware operation is a low-margin business that accounts for a shrinking share of its overall business. It primarily serves as a way to attract customers for its more lucrative business: advertising and subscriptions. Roku makes about five times as much money selling advertising and taking a cut of streaming media subscriptions as it does selling devices. The dongle maker has started to fund original programming that you can watch on its devices, creating additional advertising inventory. While it’s dabbling for now, it will soon have to make a decision. It can go the way of Netflix and Amazon and become a major programmer, or go the way of YouTube and Facebook and host other companies’ videos. (If Roku does choose to go the path of Netflix, it has been linked to companies like Lions Gate.)
Top-of-the-line talent will make more money than ever before. Producers and entrepreneurs love to complain about how talent is getting screwed in the shift to streaming. They don’t own shows anymore, so they can’t reap the upside in a big hit. While it’s true that certain stars can’t make as much money from individual projects as they used to, there are more ways for talent to get paid than ever before. Take someone like Dwayne Johnson. He gets paid more upfront for projects than movie stars ever made before. He is also a part owner in businesses that only exist because of his celebrity — such as a tequila line and a clothing line. He also gets an early shot at investing in all manner of privately held businesses.
Will the government block Amazon’s deal for MGM, or Discovery’s deal for WarnerMedia? The government doesn’t have many good reasons to block either deal considering many of the other deals it has approved. MGM will not turn Amazon into an indomitable force in TV, nor will merging WarnerMedia and Discovery make the combined company the new market leader in streaming. But the government may still intervene. There is a growing desire to limit the power of large technology companies, and the MGM deal gives the Federal Trade Commission a way to punish Amazon. And while the government allowed a much larger company to buy WarnerMedia, the merger with Discovery would create a massive TV network owner.
Final prediction: The biggest hit of the year is the one you know nothing about. Every network passed on “Ted Lasso” before it became Apple TV+’s breakout. The year Netflix released “Stranger Things,” it thought its big new hit would be Baz Luhrmann’s “The Get Down.” And it certainly didn’t anticipate “Squid Game” becoming its most popular show ever. The most popular TV shows of the streaming era are the ones that no one saw coming. Except for those dang Marvel shows. — Lucas Shaw As Bob Iger Departs, Disney Investors Also Look to Get Off the Ride Disney shares fell double digits last year as enthusiasm about its streaming business waned.
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We got a bunch of the year-end lists. We already told you the biggest tour of the year was the Rolling Stones. The most popular musician was either Olivia Rodrigo, Morgan Wallen, or Bad Bunny, depending on how you measure. And the top podcast was either “The Daily” or Joe Rogan. Other than that.. “Spider-Man: No Way Home.” The seventh live-action Spider-Man movie this century is the first and only movie of 2021 to surpass $1 billion at the box office. Marvel movies accounted for 26% of all ticket sales in 2021, per Matt Ball.
The Super Bowl, followed by six football games, per Variety. The only two non-football games to crack the top 10 were an episode of “The Equalizer” (airing after the Super Bowl) and Oprah Winfrey’s interview with Meghan and Harry. If you adjust for the advertising demo of viewers between the age of 18 and 49, football took the top 12 spots and 25 of the top 25. OnlyFans CEO Tim Stokely stepped down while I was on vacation.
While we broke the news, I still don’t know the full story of what happened here. The founder of a wildly successful company left and named his marketing chief/spokesperson his successor. The best book I read over break was Jane Leavy’s biography of Mickey Mantle. I’d read her biography of Sandy Koufax a long time ago, and the Mantle book blew me away. While the book is about a baseball player, it’s more a touching portrait of a wounded man than a book about sports. (Honorable mention is the Irish thriller “56 Days,” but I haven’t finished it.) The best movie I saw was… “C’mon, C’mon,” is a flawed but heartfelt movie from one of my favorite directors.