Executives of Hallmark Channel made a curious decision in September, autumn in the United States: they launched a new streaming service.
It seems like a late date to do this. Most media companies entered the streaming fray years ago, and few have had success competing directly with giants like Netflix, Amazon e Disney.
But Hallmark executives decided timing wasn’t an issue. Their app, Hallmark+it didn’t need to attract the whole country, they said, just its target audience — the people who usually gather to watch traditional Christmas programming and other celebratory dates.
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“We don’t need to create content that appeals to everyone,” said John Matts, chief operating officer at Hallmark Media.
He may be very right.
For much of the last decade, the conventional wisdom within the entertainment world was that only a small handful of megaservices would survive the storms. streaming wars. After all, they had the stars, the budgets and the technological prowess.
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But many media executives now believe there may be room for some more modest streaming services as well.
About two dozen specialized, low-cost streaming services have generated significant subscriber growth in recent years, according to a new report from Antennaa signature research company. This includes streamers from traditional cable networks (AMC+, BET+) and those that fall into specific genres, including British television (BritBox, Acorn TV), horror (Shudder), and anime (Crunchyroll, Hidive).
“It’s a blast,” said Jonathan Carson, CEO of Antenna.
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No second quarter of 2022, 24.5 million people have subscribed to at least one niche streaming service. This number more than doubled by the second quarter of this year, reaching 51.4 million, according to Antenna.
Overall, active subscriptions for niche streamers grew 27% last year and 20% so far this year, outpacing the biggest streaming services. These growth rates were 17% in 2023 and 7% this year, according to Antenna.
The move came despite deep skepticism that niche streamers could really take off. When executives at Discovery took control of the Warner Media in 2022, one of his first acts was to turn off the CNN+a $300 million investment that was just a few weeks old. Discovery executives said one of the main reasons for the quick shutdown was that they had previously tried to launch smaller, single-topic streamers — including apps for cars, golf and food — and that those attempts failed miserably.
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“We have failed in almost every attempt to launch these products,” a Discovery executive said at the time. Instead, they integrated CNN content into Maxa much broader service that includes HBO, the Warner Bros. and Discovery programming.
But in the two years since CNN+ shut down, the streaming industry has become unpredictable. Wall Street became disillusioned with endless spending on programming, and media companies quickly prioritized profits over raw subscriber counts.
As a result, media companies raised subscription prices and cut costs by producing fewer programs. The programs that have been made have a broader focus, aiming to reach the widest possible audience. But these changes may have opened the door to specialized services that have much more targeted programming, executives said.
“Ten years ago, it was all about programming that was different and unique,” said Robert Schildhouse, president of BritBoxabout the biggest streaming players. “Now there’s a broader approach that’s taken hold of guys who need to program for much broader audiences, and that’s giving way to the specialists.”
Still, there are many warning signs for niche streamers who rely on subscriptions.
Cancellation rates are haunting top streaming executives as consumers become increasingly willing to cancel or switch services. Cancellation rates are even higher among niche players, according to Antenna.
Niche streamers also rely heavily on finding subscribers through streaming marketplaces like Amazon Prime, where viewers can sign up for different services through the app. Nearly 60% of subscriptions among niche streaming services in the second quarter came through Amazon’s channels page, according to Antenna. The biggest streamers only had 9% of their sales through Amazon. This suggests that people are finding and subscribing to specialty streamers while searching for individual shows and movies, not necessarily looking for the brands themselves.
Still, executives at smaller streaming services said the bar was lower for them.
“I don’t need 70 million subscribers to make this work,” said Matts, the Hallmark executive. “I can do this with a few million subscribers. This could be a really attractive business for us small guys because we don’t have to spend tens of billions of dollars on programming.”
Matts did not disclose subscription numbers for Hallmark+. BritBox, which started in 2017, said in February it had just under four million subscribers. Netflix, by comparison, has 282.7 million.
And while major streamers have only recently reduced programming costs, smaller ones have been doing so for years. AMC has an entire portfolio of niche streamers, including AMC+, Shudder, Acorn TV, and Hidive. Executives said a more cost-effective approach has always been part of their business model.
“This fiscal behavior has been built into our strategy from the beginning,” said Dan McDermott, president of entertainment at AMC Networks. “We are very careful about how we spend our money.”
Or, as Lisa Hamilton Daly, head of programming at Hallmark, put it, “We don’t make shows in space.”
Carson, CEO of Antenna, said he can imagine a streaming future not unlike the newsstands of decades ago. For each publication of general mass interest, such as Time e Lifethere were dozens of magazines dedicated to a specific topic, such as food, fashion, or photography.
“We have 100 years of consumer media usage that tells us there are special interests, and people will have special interests,” he said. “These interests are not going to disappear.”
This article originally appeared in The New York Times
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