Disney shares are down 55% from the peak of the pandemic, wiping out all of the company's streaming profits. Disney audiences, on the other hand, are tiring of spin-offs, sequels and the ever-increasing number of superhero films.

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The industry is under enormous pressure at the moment. Streaming platforms have to be profitable. Broadcasting and cable networks have largely driven their revenues, but with cable now increasingly cut off, sources of funding may soon dry up.

I have reviewed Bob Iger's proposals for corrective action after the publication of the above financial report. Among them are:

• Disney can only succeed by rethinking its commitment to its traditional TV business;
• over the next five years, films and parks (in addition to streaming) are expected to be the main drivers of growth and value creation;
• The studio is going to make fewer, smaller-budgeted films, but with better content and quality;
• Disney also relies on using multiple channels to distribute;
• Introduction of measures to increase the value of subscribers (rather than a focus on their growth at all costs);
• Price increase for ad-free packages.

In my view, the 'Disney Corrective Action Plan' described above clearly shows that the video streaming industry is once again reeling in an attempt to return to proven revenue models. After all, the distribution of Disney's original content to cable operators has brought in a smaller but steady stream of revenue. Streaming video platforms promised to give customers more flexibility than linear TV for a lot less money. Attracted by this offer, viewers abandoned cable TV en masse and bought subscriptions to streaming platforms. For a long time, this model worked. Unfortunately, the price of the most popular streaming services in the US has risen by as much as $14 a month in the last year, making them more expensive (by $4 already) than cable.

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After the recent increases in the price of subscriptions by, among others Disney, Netflix, HBO MAX, Apple TV+ or Hulu, will customers still want to stay with them? The industry explains the increases by rising interest rates and content production prices, as well as the excessive losses associated with the period of cheaper offers (introduced to encourage customers to switch away from cable TV). Perhaps the introduction of cheaper packages with advertising will allow them to stop the exodus of subscribers. This would confirm their predictions that streaming services will be profitable as early as 2024.

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Clearly, a return to more direct B2C sales by major streaming platforms such as Disney could be one of the main ways to address the industry's financial problems. Another plan to solve the problems could be to introduce cheaper but long-term offers, which would provide a steady profit despite lower revenues and keep the customer longer. Will any of the big players go for it?

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While linear TV remains profitable, the trends driven by cord-cutting are clear (Disney as an example). Linear television and the range of programmes it offers need to be diversified across all possible channels of distribution. Streaming video platforms, on the other hand, should look more closely at selling their services directly to individual customers and ensure that the content is attractive.

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Will the streaming industry retain their clients? Will the most popular streaming platforms be able to retain existing subscribers and attract new ones with cheaper ad-supported packages?

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