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How the streaming landscape will change from COVID-19

Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss the streaming landscape amid COVID-19 with Variety Senior Editor, Michael Schneider.

Video Transcript

BRIAN SOZZI: The streaming landscape is facing new challenges as COVID-19 infections continue to rise in some places. Just this week, short form video service Quibi announced it's shutting down only six months after launching. Let's take a look at where the streaming landscape now stands with Variety's Senior Editor Michael Schneider. Michael, good to see you this morning. What went wrong with Quibi? I think it's a question we're all still asking, and rightfully so.


MICHAEL SCHNEIDER: Well, the bigger question probably is should Quibi have ever existed in the first place? You know, there is a lot of us, and you know, Quibi sort of became a punching bag, a bit of a joke. But you know, there were some real questions about was this a solution in search of a problem? From the very beginning, there are a lot of questions over whether Quibi really was fulfilling some sort of marketplace need when we have YouTube, when we have, you know, people are watching Netflix on trains.

Some of the things that Jeffrey Katzenberg and Meg Whitman said in their pitch really I'm not sure I ever made any sense. And then you put the pandemic on top of it right when they launched, their big thing was reaching commuters and folks who are out in the world. And when everyone is inside watching Netflix, well, then that throws the other part of your promise as well.

ALEXIS CHRISTOFOROUS: Do you think that Netflix is still king of streaming? I mean, they came out with that earnings report, disappointed the Street, stock got hit. I mean, they added subscribers, just not as many as, you know, we've been used to. And they even warned, look, we probably peaked early in the pandemic. We're going to see a little bit of a pullback, which indeed we did see. But to your mind, is Netflix still the streaming service to beat right now?

MICHAEL SCHNEIDER: 100%, and they'll continue to be, and we see it. You know, a lot of times when Netflix acquires a program that had been available elsewhere, consumers act like they've never seen the show before. A good example is "Cobra Kai," a show that actually aired a couple of years ago on YouTube Premium back when that was a service. Netflix recently acquired it, and for a good majority of consumers, they had never seen the show before, and it turned into a massive hit. And for all intents and purposes, everyone now thinks of it as an Netflix show. You know, they still have your worldwide domination in this space, and I don't see anyone coming close anytime soon.

ALEXIS CHRISTOFOROUS: It's so funny that you mentioned "Cobra Kai." I just started watching it and did think it was a Netflix series, so it goes to show you. And I also found "Schitt's Creek" that way as well, so I think a lot of shows finding a second life and a much bigger audience on Netflix.

MICHAEL SCHNEIDER: Yeah, and "Schitt's Creek" is a great example, because that dominated at the Emmy's this year. And it wasn't because people were watching it on a little Pop TV, a Viacom network that no one really sees, it's because they all binged it on Netflix. And so, again, the power of Netflix we see constantly in pop culture and in the business.

BRIAN SOZZI: Michael, is the market big enough where a Peacock and HBO Max, can carve out niches here, or are we looking at potential Quibi situations here within the next year?

MICHAEL SCHNEIDER: Well, you know, some of these services are that classic too big to fail. HBO Max, you know, built on the back of HBO, and you know, that's where they're putting all their eggs in that basket, and Comcast the same with Peacock. You know, these are diversified companies, so they still have legacy cable businesses, they still have the legacy broadcast and local TV businesses, so a lot of these things that are still making money for the company can prop up a service like Peacock. And the hope is eventually once, you know, there's real penetration for these services, they can really pivot and focus on those. But because they're built on the backs of these legacy businesses that are still functioning, still making money, they can survive for a lot longer.

BRIAN SOZZI: All right, let's leave it there, Variety-- Oh, go ahead Alexis.

ALEXIS CHRISTOFOROUS: Yeah, Disney Plus. I mean, we saw, you know, Disney say recently they're reorganizing around the streaming service. Is that a good bet for Disney, especially with so much competition out there? I understand they have a very stacked content library, but there's just so much competition.

MICHAEL SCHNEIDER: Yeah, but Disney Plus has been a big success for them, and it can only grow from here. They're still just launching internationally, and because they've seen such early success, I think they've really decided, you know, let's focus on that. They also own Hulu. That's a bigger question. What are they going to do with Hulu? There's a lot of questions over, you know, they acquired a Comcast stake in it, but they're losing a lot of Comcast programming. And if Hulu gets too big, they're going to owe Comcast even more money. So a lot of questions over what their commitment to Hulu is going to be, but they are all in with Disney Plus.