Streaming wars: The fight for viewers
For more than four decades, PBS and "Sesame Street" were inseparable. "When the show was first started, it literally was supposed to be preschool on TV," said Steve Youngwood, the CEO of Sesame Workshop. "Universal pre-K was called 'Sesame Street' and PBS back in that day.
Though older episodes still air on public television, the beloved children's show moved to HBO, the premium cable network, in 2015. Four years later, it moved again to HBO Max, an online streaming service.
Youngwood said today's toddlers are very sophisticated consumers: "They don't understand, 'Tune into this time or that time.' They expect the content to fit their schedule and their lifestyle," he said.
During the pandemic, there was an influx of viewers. The so-called "streaming wars" heated up between services like HBO Max, Netflix, Amazon Prime Video, Apple TV+, Hulu, and CBS' parent company's Paramount+.
"People are watching more than ever," said Alex Weprin, who writes for the Hollywood Reporter. "It's just that that watching is spread across more apps, more channels, more platforms. it's all fragmented in a way that it just wasn't before."
He said what we're watching affects how we watch it: "When it comes to news and sports, people still watch that live. And so, those are the things that are kind of keeping the traditional television business models alive, whether it's broadcast or cable."
"Sunday Morning" contributor Kelefa Sanneh asked, "And the traditional model is all about appointment viewing, right?"
"Yeah; it's getting people to tune in at 9:00 p.m. on Thursday, or if there's a breaking news event to kind of watch in rolling coverage."
To major advertisers, catching everyone around the TV is not just about togetherness. Weprin said, "They want millions of people watching the same thing at the same time, all watching the same car ad. It's kind of something that you really can't match in streaming where the viewership is diffused across thousands of titles."
More choice for subscribers means more challenges for the streaming services, as viewers pick between the many options.
This year, Netflix announced that its era of seemingly endless growth was over.
Sanneh asked, "Does that mean that people are getting a little disenchanted with the content? Or are they just running out of humans?"
"I think it's partly because there's a lot more competition now," Weprin replied. "Netflix, for years, kind of had streaming to themselves. There were other players, but no one had the depth or the library that they had."
Of course, those libraries aren't quite as permanent as the term would suggest. This summer many "Sesame Street" fans were startled when HBO Max pulled 200 episodes from its archive.
Steve Youngwood suggested the move may have been related to changes at HBO's former parent company, Warner Media. "They're going through a new merger with Discovery and they're going through some shifts," he said. "But overall Nielsen will show we're top 15 show on the whole service."
Finding that there's a limit to the number of subscriptions a viewer will pay for, streamers are looking for ways to cut back. "The average viewer has between three and four subscriptions according to Deloitte," said Weprin. "And that's a problem, because there's a lot more than three or four streaming services out there."
"It seems like one of the promises of Netflix and some of these other networks was that, finally, we wouldn't have to watch ads anymore," Sanneh said.
"Yeah, and that's certainly changing!" Weprin laughed. "Increasingly, every streaming service, including Netflix, is going to launch advertising."
Ads-supported options can be cheaper, or even free, like Amazon's Freevee and Paramount's Pluto TV, essentially a throwback to the way TV used to be.
Weprin said, "The old business model of television was so good, and generated so much cash, and so much profit, and the new model is actually so much harder to make a profit on because the cost of adding one more subscriber is so much higher."
Which may be one reason why Amazon Prime recently because the exclusive home of the NFL's Thursday Night Football, an example of a streaming service starting to act like an old-fashioned TV network.
Throughout the industry, Weprin predicts increasing consolidation. And as for those limitless program options …
Sanneh said, "In the old days, they used to say about cable, you know, 'Two-hundred channels and nothing to watch.' Sometimes, it still feels like there's nothing to watch."
"Some things always hold true," said Weprin. "In theory, there should be something you want to watch. But in practice, if you have 10,000 titles to choose from, how much time are you going to want to spend looking for something? People just wanna watch something."
Often, something familiar.
"How much do networks even matter?" asked Sanneh. "Everyone knows 'Sesame Street,' everyone loves 'Sesame Street,' and I suspect that a lot of people would follow 'Sesame Street' wherever it went."
Weprin said, "'Sesame Street' is arguably the most iconic brand in children's television. If they left HBO Max and went to Netflix or Paramount+, there's no doubt that people would watch 'Sesame Street' on those services. They're in that unique position where the brand of the show, 'Sesame Street,' is actually more recognizable than these streaming services that provide them."
Steve Youngwood, of Sesame Workshop, tries not to worry too much about the streaming wars. "'Sesame Street''s not going anywhere," he said. "We're doing what we do really well, which is making high-quality, educational content. We will partner with PBS, we will partner with HBO Max. And if we do something and we do something right, we know we will be noticed. And we know it will matter."
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Story produced by Mary Raffalli. Editor: Remington Korper.
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