Streaming slows to a trickle in 2025

By Tom Wainwright, Media editor, The Economist

An embarrassment of riches awaits television and film audiences in 2025, as projects that were delayed by a Hollywood strike in 2023 reach the small and big screens at last. New instalments of “Avatar”, “Mission: Impossible” and “Captain America” will jostle for attention at the cinema. At home, viewers will settle down for more of “The White Lotus” and the final chapter of “Stranger Things”.

But audiences should enjoy it while they can because, behind the scenes, the tap of fresh content is being tightened. At the same time, prices are rising and commercial breaks are finding their way into streaming services that were previously ad-free. As investors become impatient for profits, a golden age of cheap, abundant entertainment is giving way to a period of austerity.

For the past five years, as cable television has gone into ever-steeper decline, Hollywood studios have done everything they can to sign up customers to their streaming services, splashing out on content and selling it at ludicrously low prices. Disney+ launched in 2019, offering access to the glittering Disney back catalogue, from “Snow White” to “Star Wars”, for $6.99 a month. As households rushed to sign up, so did investors.

Yet making money from streaming is proving harder than expected. Netflix, its largest exponent, is making steady profits. Disney’s streaming division broke even in the second quarter of 2024. But most of Hollywood’s older studios are still losing money on their digital ventures, and shareholders are jumping ship. Shares in Warner Bros Discovery, which lacks theme parks or a broadband business to prop up its anaemic tv and film earnings, have lost 70% of their value since the combined company was formed in 2022.

An industry-wide economy drive is therefore under way, to bring studios back into the black. Most have already slashed their budgets: Disney’s outlay on content, excluding sport, was 30% lower in 2024 than in 2022. Even Apple, with near-bottomless cash reserves, is said to be curbing its tv-commissioning enthusiasm. At the same time, customers should prepare for higher prices. Disney+ already costs more than twice what it did at launch, and the company is cracking down on password-sharing. Amazon Prime Video has begun slipping advertising into its programming. The year ahead is likely to see more of this: some wonder if Apple tv+, the last big ad-free service, will roll out commercial breaks in 2025.

Streamers will also try to squeeze more money from subscribers by bundling their services together. Disney and Warner Bros launched a package of their streaming services in 2024, and Comcast, the cable company that owns Universal, offered its broadband customers a bundle of Netflix and Apple tv+ along with its own streaming offering, Peacock. Streamers hope that rolling services together might help reduce customer churn. Disney plans to launch a streaming version of its espn sports service in 2025, which is likely to be offered as part of a bundle with its other streaming apps.

Even these initiatives may not be enough to get some studios out of the red. So the year ahead could see some more radical changes. In 2025 Paramount, one of the world’s oldest film studios and the last still based in central Hollywood, is expected to complete its sale to Skydance Media, a production company run by David Ellison, a millennial heir to a tech fortune. Rumours abound that more tie-ups will follow now that America’s election is out of the way.

Some combination involving Comcast and Warner is possible. So is a partnership including Fox Corporation—though that will depend on the will of its controlling shareholder, Rupert Murdoch. With Mr Murdoch due to turn 94 in March, tv-watchers are increasingly looking ahead to the next chapter in that long-running succession drama, too. ■