Consolidation is coming quickly to the streaming market, one media analyst warns, predicting sweeping changes to the way we consume content.

Three years from now, families will sit in separate rooms watching content on their own devices. Often, they’ll balance two screens on their laps at the same time, with one eye on the TV show they’re streaming, and another on their TikTok feed or other social media channels. Sound implausible? “We can already see in the data that people are watching TV or a streaming service while also on their mobile,” says Matt Bale, a Wellington-based media analyst. “It’s been rising for years.”

That’s not the only major change happening in our TV consumption habits. The smorgasbord of streaming services we have access to – think Netflix, Disney+, Apple TV+, Amazon Prime Video, Neon, Sky, TVNZ+, ThreeNow, and a new-look HBO Max service rumoured to land in 2024 – isn’t predicted to last. The market is already saturated, and cuts, mergers and possibly even closures are now being forecast. “There has to be … some sort of consolidation happening,” predicts Bale. “It’s under pressure, which is why hybrid models, part ad-funded … are starting to emerge.”

Ah, ads. We’ll be watching many more of those soon too – streaming services won’t be able to survive without them, says Bale. Netflix has already announced ad-supported subscriptions will land in 2023, and Disney TV+ is about to do the same. Prices for ad-free subscriptions are about to balloon, and Bale points to Sky TV as the direction we’re going. Once upon a time, 50% of New Zealand households enjoyed the service’s ad-free offerings. “Now look at Sky,” says Bale. “You’ve got lots of channels, you’ve got lots of ads, you’re paying a lot of money.”

That’s not all. The biggest and best shows – things like the next Breaking Bad or Game of Thrones – will become premium products and streaming services will charge higher prices to watch them. Just like major boxing or UFC events, Bale believes pay-per-view TV shows are coming whether we like it or not. “Once [these services] reach a level of saturation maturity, they’ll start saying, ‘How else can I make money?’ One way is ads. Another is pay-per-view on your premium products.”

Phew. Right now, the TV streaming market is a brutal place to be. Years of endless growth for Netflix appear to have ended and it is now losing subscribers, share value and staff as it pares back its annual content budget. Disney+ recently overtook Netflix in subscriber numbers, but is struggling to land another hit after lacklustre seasons of Star Wars spinoffs Boba Fett and Obi-Wan Kenobi. Amazon Prime Video has pumped $1 billion into a TV adaptation of Lord of the Rings, only to have HBO ruthlessly schedule its first major Game of Thrones spinoff, House of the Dragon, 10 days before its premiere. Backed by the world’s biggest tech company, Apple TV+ is winning Emmys and spending large, but struggling for consistency.

Bale predicts a “universal supermarket of streaming services” is coming, meaning smaller services will need to merge or fold. He believes there’s room for just three or four major streaming providers. That’s good news for consumers sick of shelling out for multiple subscription packages, or “savvily switching” between them. Bale cites recent data out of America that shows 44% of consumers feel subscription services are getting too expensive, and 28% think they’re paying for too many of them. “Are there too many streaming services? I think we’re starting to see that.”

But that’s bad news for local content creators, who will find themselves competing against major international players with far deeper pockets. So far, major streamers have shown little sign of wanting to create Aotearoa-led content, despite regularly using our country, sets and talent for international productions. Bale says that could mean a loss of Aotearoa voices on our screens. “It’s a little bit scary if you’re little ol’ New Zealand, in terms of a sustainable local sector,” says Bale. “You want New Zealand stories, New Zealand voices, New Zealand perceptions to surface … Someone sitting in Auckland with a great script, you’re competing with the rest of the world. That’s a worry for me.”

Some things still need to play out. Bale believes larger streamers may open their own cinemas to debut films and cut out cinema chains. Sponsorship deals could become prevalent, where brands pay to offer consumers premium access to major TV shows. Locally, TVNZ will soon merge with RNZ, changes are looming for NZ on Air, and TVNZ+ appears to be pivoting to offer a paid, ad-free service. Sky TV, whose streaming service Neon gobbled up locals Lightbox in 2020, is gearing up to launch a new set-top digital box later this year, one that will help merge all streaming platforms and Sky TV services into one handy package.

Is it too little, too late for Sky? Time will tell. “It will come down to how good the user experience is,” says Bale. “The future is about streaming services that integrate vertically across the entire device chain. If the box can’t do that, it’s [pointless].” More trouble could be looming. Bale points to an American trend where major sports franchises are gearing up to launch their own streaming platforms. “I’ll get my MLB Pass, my NBA Pass, and cut out the middle man,” he says.

If the All Blacks begin streaming games through allblacks.com, Sky TV has a real problem on its hands. “Your hypothesis that it’s going to be hard for Sky is correct,” says Bale, who believes the service can survive, but perhaps in a diminished format. “Perhaps it’s not as big and glitzy …  covering first XV rugby.”

The other question is, do the kids even care? The stats say they don’t. The number of eyeballs watching broadcast television is diminishing every year, and none care less than the 18-34-year-old age bracket, according to these graphs leaked to The Spinoff. Instead of Netflix, Disney TV+ and films, they’re watching YouTube, TikTok and Twitch. Bale has experience of this in his own household. “I look at my son, he’s 13, YouTube is huge for him,” he says. “If TVNZ turned off tonight he wouldn’t shed a tear.”

The days we all watched Game of Thrones together and jumped on Twitter to talk about it aren’t just over – they seem positively prehistoric. Grab the popcorn and settle in, because over the next couple of years there’s a no-holds-barred cage match happening in streaming. There are going to be winners, there will be survivors, and there are probably going to be a few bodies to step over once it’s played out.

Bale’s so enthusiastic about it all that I can barely get him off the phone. “It’s completely fascinating, in terms of what’s happening,” he says. “I could talk about it forever.”

Follow Duncan Greive’s NZ media podcast The Fold on Apple Podcasts, Spotify or your favourite podcast provider.