CONTENT MAY NOT BE EXCLUSIVE ANYMORE, BUT AT LEAST IT WILL MAKE MONEY

Afew quick good news. First things first, human jobs have not been replaced by ChatGPT-4 (not yet), and we still don't understand what the Oscars Awards stand for, as the two top box office movies from 2022, "Maverick" and "Avatar 2," didn't win. Finally, the content industry agreed on one point: we don't want to lose more money on streaming.

That last topic is a massive announcement from recent statements from the big guys, admitting they have to change their streaming strategies to achieve the "now" urgent profitability. Yes, it's happening!

You can't solve a problem if you don't acknowledge it, even when it is one of the most common questions that we all did at some moment: is this business profitable?

That's what they teach us at college, but the streaming wars seemed closer to the venture capital investment world for a long time, where a good pitch featuring exponential user growth unlocks the power of "burning money" quickly.

The industry has realized that profitability cannot be sacrificed in the name of growth. As a result, we

Pablo Mancuso President & Owner, Accion Group

are seeing a new focus on making money from streaming rather than just building up user bases. That trend is notable because it will reshape some critical drivers in this highly costly war, starting with modifications to the king: the content.

Bob Iger says Disney+ hoarding its own movies and TV shows was less valuable than he thought. That is excellent news for those in content distribution, as the door to content syndication is open once again. How do we start to focus on profits?

Content Syndication. As Bob anticipated, that's what the studios do, and while some companies like Disney will put less focus on producing exclusive only content, we'll probably start to see movies and series on direct competitors.

Movies need to be theater movies. David Zaslav was the first to mention it; if a project costs more than 30 million dollars, it needs theatrical distribution. 2022 showed promising signs of recovery with some big hits. Apple plans to spend $1 billion a year to produce movies that will be released in theaters when most of Apple's previous original films have either been exclusive to the streaming service or released in a limited number of theaters. Amazon is tempted to buy AMC Theaters, and they already own MGM Studios. Big tech is moving into the movie world.

All business models are needed. We already know that Netflix's Ad tier service is working (still only 1% of their total base), but almost 20% of new clients are attracted to this new plan, so there are customers for everyone. Amazon keeps adding linear channels, and Discovery+ is also taking linear content from many of its top brands, like CNN. Fast channels are still growing fast, and the total consumption of platforms is reaching 50% only on Smart TVs. Nobody can stay quiet.

Don't alarm if you find "The Mandalorian" on HBO Max or "Succession" on Netflix. If you may have to wait longer to watch that movie you couldn't catch in theaters, that happened for a reason: it has to make money!

By Pablo Mancuso