Future of TV Briefing: How TV and streaming companies’ advertising and subscription businesses fared in Q4 2023

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This week’s Future of TV Briefing looks at what TV and streaming companies’ latest quarterly earnings reports indicate about the state of the business.

For all the (justified) sturm und drang surrounding traditional TV and streaming businesses – a weak ad market, slowing subscriber growth, pressed profit margins – the fourth quarter of 2023 wasn’t entirely a lowlight for the industry, according to TV and streaming companies’ latest quarterly earnings reports.

Okay, the dimming traditional TV business was very much a lowlight. But the streaming business gained a little luster, albeit still not nearly enough to outshine traditional TV’s shadow. Here’s a recap of how TV and streaming companies’ advertising and subscription businesses fared in the final three months of 2023.

Advertising revenue

Traditional TV advertising businesses turned in a pretty poor showing for Q4 2023, with several TV network owners suffering double-digit year-over-year declines. Disney and Paramount cited the writers’ and actors’ strikes as having a negative impact on their programming schedules and, by extension, TV ad revenues. Streaming ad businesses, by contrast, continued to grow, as outlined in the list below. Neither Disney nor Netflix break out their respective ad revenues, so they are omitted.

AMC Networks: -23% change in ad revenue year over year

Fox: -20%

Fubo: +15%

NBCUniversal: -7%

Paramount: -11%

Roku (platform revenue, which primarily consists of ad revenue): +13%

TelevisaUnivision (U.S.): -1%

Warner Bros. Discovery: -9%

Vizio: +36%

Paramount and Warner Bros. Discovery provided the sharpest view of the divergent picture between the traditional TV and streaming ad businesses. Paramount’s streaming ad revenue increased by 14%, whereas its traditional TV ad revenue decreased by 15%. Meanwhile, WBD’s streaming ad revenue – reported in its direct-to-consumer segment, which includes ad-free HBO’s linear TV network – jumped by 51% year over year compared to its TV networks’ 12% slide in ad revenue. Problem is, in both cases streaming ad revenue represented less than a quarter of the companies’ traditional TV ad revenues (23% for Paramount and 9% for WBD).

Disney painted a similar picture, despite not reporting ad revenue figures. In its latest quarterly earnings report, the company said its streaming ad revenue grew because of an increased number of ad impressions and despite pricing declines for Hulu. On the flip side, the company said its traditional TV ad revenue declined due, in part, to less available inventory for ABC.

Streaming subscriptions

Streaming services continued to settle into slow-growth mode. Well, except for Netflix. And Disney+ – albeit for opposite reasons.

AMC Networks: 11.4 million subscribers (+300,000)

Disney+ (excluding Disney+ Hotstar): 111.3 million (-1.3 million)

Fubo: 1.6 million (-300,000)

Hulu: 49.7 million (+1.2 million)

Netflix: 260.3 million (+13.1 million)

Paramount+: 67.5 million (+4.1 million)

Peacock: 31 million (+3 million)

Starz (excluding regions it has left or is leaving, like the U.K.): 15.9 million (+90,000)

Warner Bros. Discovery (includes HBO, Max, Discovery+): 97.7 million (+1.8 million)

ViX:>7 million (no previous number given)

As mentioned, Netflix and Disney+ were the polar exceptions to the steady growth that the majority of other streamers saw in the final three months of 2023. (we’ll get to Fubo in the next section).

Already the predominant subscription-based streamer, Netflix saw its subscriber base skyrocket in Q4, thanks in large part to its password-sharing crackdown. By contrast, Disney+ can probably thank its price hike for 1.3 million subscribers deciding to take a hike on the company’s flagship streaming service.

Given the success of Netflix’s password-sharing crackdown in driving subscriber growth, this year a number of rival streamers have announced similar plans, including Disney. Disney is also counting on its deal to make Disney+’s ad-supported tier available to Charter’s pay-TV subscribers – which took effect in January and stemmed from last year’s distribution standoff – to help it add 5.5 million to 6 million Disney+ subscribers in the first three months of 2023.

Streaming profitability continues to prove elusive for many companies aside from Netflix (and WBD, though take that claim with a ladle of salt). Disney, NBCUniversal and Paramount each lost money in streaming in the latest quarter, but each said their streaming losses are lessening, thanks in no small part to cost-cutting measures, such as lowering their programming budgets and laying off employees. Disney expects to turn a streaming profit in the next year. Paramount sees itself doing the same domestically in 2025. And Jason Armstrong, CFO of NBCU parent Comcast, said during the company’s earnings call that “2023 marked the peak in annual losses at Peacock.”

Pay-TV subscriptions

Let’s not spend too many more words on the traditional TV business. But we only need a few words on the pay-TV business: It’s still shrinking.

Altice: -62,000 subscribers

Charter: -257,000

Comcast: -389,000

Fubo: -300,000

Hulu (live TV): Flat

Even streaming pay-TV services are seeing people cut the (cordless) cord. Although not all of them. YouTube TV is the outlier.

In February – coming off its first season as the distributor of the NFL’s Sunday Ticket Package, which was only available to YouTube TV subscribers – the Google-owned video platform announced its pay-TV service had 8 million subscribers. YouTube had last reported YouTube TV’s subscriber count in July 2022 when the number was 5 million.

As Ars Technica reported, YouTube TV’s subscriber base makes its the fourth-largest pay-TV provider in the U.S. But that doesn’t necessarily mean it will stay there. It will remain to be seen how many of those subscribers YouTube TV can retain until the next NFL season. Then again, if the other pay-TV subscribers continue to shed subscribers, YouTube TV could move up the ladder anyway. After all, the overall traditional TV business, once a fight for attention, has become a war of attrition.

What we’ve heard

“We haven’t seen a huge uptick in spend, but we sort of, kind of think — maybe not a huge uptick in spend — but we sort of, kind of think maybe some uptick is coming. All indications point to a slow, long upfront for that reason.”

— Agency executive on TV/streaming ad spending heading into this year’s upfront market