(05-16-2022 08:31 AM)quo vadis Wrote:  

(05-16-2022 08:14 AM)solohawks Wrote:  

(05-16-2022 07:49 AM)quo vadis Wrote:  

(05-15-2022 03:08 PM)Attackcoog Wrote:  

(05-15-2022 12:53 PM)solohawks Wrote:  I wonder if startup costs are still being considered for Disney+

Probably. But I suspect the biggest cost has to be new exclusive Disney Plus programming (Mandelorian, Marvel series content, Disney Plus movies, etc). Those series are expensed immediately in the current year,---but the reality is these productions will continue to be revenue producing attractions for Disney Plus for years to come. I suspect they also serve as fan multipliers that will drive future Marvel big screen block buster franchises in the future. Its entirely possible their business model integration is a bit more complex than just considering the streaming profit-and-loss statement.

That's my sense as well. IOWs, I don't believe startup costs are likely distorting the 'true' ongoing, operational profitability of these services, as I think the biggest costs are operational. Could be wrong, but that's my sense.

For example, a couple months ago, NBCUniversal announced they planned to spend $3 Billion in 2022 on content alone, that seems like a big chunk of change.

Netflix spends about $28 million a month on streaming services and Cloud Services (AWS). It spends about $2 Billion a month on content.

thats a ton of investment to recoup

Content is a real ongoing cost for streaming. "Subscriber Churn" is real, with some people dropping a service once a favorite show ends.

You have to constantly be developing new content to keep people interested. Those ongoing costs are high.

It seems as if though Netflix compounds this since they have a binge model of dropping entire seasons of shows all at once as opposed to parsing them out week-by-week.

As a consumer, I generally like this model. When there's a cliffhanger, who doesn't want to get to the next episode as soon as possible?

However, if I'm thinking about this like a business person, does it make sense to have a binge model versus having a weekly (or at least more spaced out) model for showing episodes? Disney+ can keep a subscriber for a show like The Mandalorian for multiple months, whereas a fan of any particular Netflix show can conceivably watch an entire season in a single day. This requires Netflix to invest in way more shows to keep subscribers back month after month.

Note that Netflix might be shifting a little bit on this front. They split the last Ozark season into two halves and will be doing the same for the upcoming season of Stranger Things.

Also, as a consumer, there's also a part of me that actually likes the discussion and anticipation of a new show each week. Better Call Saul is going through its final season right now, for instance, and it's fun (at least for me) to listen to podcasts and go onto Reddit forums to discuss episodes and bat around theories of what will happen next. It's sort of like sports in a way where the anticipation and talk around a big game can consume more time than watching the game itself. That creates a broader ecosystem around the show. (LOST was really the first show that tapped into that for me.)

Netflix also has a bit of a disadvantage because they don't have the brands that the other main streamers can rely upon with built-in fan bases. Disney+ has Star Wars, Marvel and all of its animation properties to create more content from in essentially an endless manner. HBOMax has DC along with Game of Thrones (and conceivably could figure out how to create more Harry Potter content). Even Paramount+ has Star Trek and Nickelodeon.

This is another corollary about why sports have been attractive to buy for all networks: it's a fairly good bet that people will still be watching the NFL, SEC, Big Ten, NBA and MLB 10 years from now. They might be expensive, but you know what you're getting and they essentially sell themselves. In contrast, networks spend hundreds of millions or even billions of dollars on content and they might be fortunate to get even one hit show out of those investments. Huge brands like Marvel and Star Wars at least provide a sports-like fan base to start from, which mitigates the risk a lot.

Otherwise, there's no formula as to why something becomes a hit show. For all of the billions of dollars that Netflix has spent on content, its biggest hit ever was Squid Game - an inexpensive Korean-produced show with subtitles/dubbing and incredibly graphic violence. Squid Game had a per episode cost of about 25% of the average episode of Stranger Things and The Crown and 10% of the per episode costs of the big Marvel shows like WandaVision. Granted, one show like Squid Game game can power profits for an entire company - entertainment companies besides Disney (which has so many brands to mine) are all effectively on a boom/bust model.