Is Disney+ getting into bed with advertisers a sign we’re reaching peak streaming?
The streaming giants have been bleeding money on content but so long as they were growing, investors didn’t seem to care. With subscriptions starting to level off, the deep pockets of advertisers are looking mighty fine to the streamers. Disney+ is the first to jump but will others soon follow? Ben Willee has some thoughts on what this means for the streaming landscape.
I am not surprised that Disney+ is set to introduce an ad-supported offering.
Streaming companies have been haemorrhaging cash for a long time and the financial markets have been letting them, provided they continued to grow.
The market is usually ferocious in takedowns of companies that don’t deliver cash profits. However, there has been a collective ‘free pass’ because audience growth has long been considered the most important metric in the streaming sector.
Most streaming services are EBITDA positive. Saying they are bleeding money is incorrect. Netflix, Disney+ and Stan are cash positive businesses. They are chasing ad options to fuel growth, not to plug a gap between loss and profit.
This premise of this article is fundamentally wrong and needs a fact check.