That there’s no one-to-one comparison to be made among these three figures is clear — Twitter’s users don’t pay for the service, and HBO Now is not the premium channel’s sole platform — but it may also be the reason why our digital culture so often seems a ball of confusion. After many years spent naming one or another broadcaster the “#1 network” on television, the temptation to rank the players continues apace, even as the metrics for doing so have become more muddled. When it comes to streaming services’ subscriber data, what’s in the numbers depends first and foremost on beating expectations.
Though Twitter isn’t in the SVOD business, the drip, drip of (ostensibly) terrible, horrible, no good, very bad news about the company since it went public in late 2013 is a prime example of this brutal game. As an avid user, I’ve argued previously that Twitter doesn’t need to match Facebook pound for pound in order to be a vital, profitable service, but under the scrutiny of shareholders and the media, its strengths have become background noise. The demand for constant growth, and unfavorable comparisons with Facebook and Instagram, have led to a series of changes to the interface to attract new users, many of which have been unpopular with diehards, to no avail: Twitter shares have dropped 67% in the past year.
In this atmosphere, HBO Now’s 800,000-strong subscriber base appears anemic, especially given early predictions that it might challenge Netflix for SVOD supremacy. Whether or not HBO CEO Richard Pepler is right that the service is “just getting started,” though, HBO Now is not where the premium channel butters its bread. In fact, the combined 130 million or so paid users of HBO and Cinemax worldwide still outstrips Netflix by a wide margin, and its partnerships with Vice Media, Grantland founder Bill Simmons, and former “Daily Show” host Jon Stewart signal that the company is not content to rest on its prestige laurels. The fact is, no one has yet managed to break the cable bundle beyond repair — but if and when that happens, HBO has laid the groundwork to welcome younger, cord-cutting viewers.
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Whether HBO can wrest viewers’ precious dollars away from Netflix — the undisputed champion of streaming — is another matter, and the latter’s ongoing expansion is sure to retain most current subscribers, and attract new ones, for the foreseeable future. Investors are smitten with the streaming service’s subscriber growth (even if the stateside numbers are slowing) and its recent addition of 130 countries where it’s available, but that doesn’t mean there are no costs: As the price of procuring its content surged from $6 billion in 2012 to $10 billion in 2015, Netflix’s revenues only increased from $4.3 billion to $6 billion in the same period. Indeed, even Netflix isn’t invincible when it comes to the vagaries of the market. From an early December high of $130.93, shares in the company have dropped a rather precipitous 33%.
Unlike competitor Amazon Prime (subscriber data N/A), part of a commercial behemoth in which “Transparent” and “Chi-Raq” are but small pieces in a much larger puzzle, streaming is Netflix’s core business, so its swelling content expenditures are necessary — and inherently more risky. And unlike the partially ad-based Hulu (9 million-plus subscribers), which is backed by a consortium of studios with networks whose goal is to establish a foothold in SVOD while attempting to lure audiences back to traditional TV, Netflix is on its own — and its success means it now has a target on its back.
All of this is to say that raw numbers — subscribers, quarterly revenues, or share prices — can tell us only so much about the health of a company in the streaming space, because each is pursuing a variation on the digital business model. (The numbers tell us even less about the quality of each outlet’s content, though their collective penchant for risk-taking in a crowded field has raised the bar for television overall.) Amid a burgeoning noisy content glut that can’t keep growing at its current pace, the real question is which one will strike the right balance between new and old distribution models, quality content and cost, subscriptions and advertising, to best capitalize on whatever TV will look like five years from now.
“If you have the answer to that,” as Thomas Schlamme told me last year, “you become the czar of entertainment.”