Niche streaming, once decried, is now booming

Executives from the Hallmark Channel made a curious decision this fall: They started a new streaming service.

It seemed awfully late to do so. Most media companies entered the streaming fray years ago, and few had success going head-to-head against titans like Netflix, Amazon and Disney.

But Hallmark executives decided the timing was not an issue. Their app, Hallmark+, did not need to appeal to the whole country, they said, just their core audience — the people who regularly flock en masse to the network’s trademark holiday and feel-good programming.

“We don’t have to make content that are all things to all people,” said John Matts, Hallmark Media’s chief operating officer. “I don’t need 70 million [subscribers] to make this thing work.”

He very well might be onto something.

For much of the past decade, conventional wisdom inside the entertainment world has been that only a small handful of megaservices would survive the streaming wars. After all, they had the stars, budgets and technological prowess.

But numerous media executives now believe that there is room for some more modest streaming services, too.

About two dozen smaller, low-cost specialty streaming services have generated significant subscriber growth over the past couple of years, according to a new report from Antenna, a subscription research firm. This includes streamers from traditional cable networks (AMC+, BET+) as well as those that fall under specific genres, including British television (BritBox, Acorn TV), horror (Shudder) and anime (Crunchyroll, Hidive).

“It’s an explosion,” Antenna CEO Jonathan Carson said.

In the second quarter of 2022, 24.5 million people bought at least one niche streaming service subscription. That figure more than doubled by the second quarter of this year, to 51.4 million, Antenna said.

Overall, active subscriptions for niche streamers grew 27% last year and 20% this year, outpacing the biggest streaming services. (Those growth rates stood at 17% in 2023 and 7% this year, Antenna said.)

The shift has arrived despite the deep skepticism that niche streamers could ever really take flight. When Discovery executives took control of Warner Media in 2022, one of their first acts was to pull the plug on CNN+, a $300 million investment that was only a few weeks old. Discovery executives said one of the main reasons for the quick shutdown was that they had taken earlier stabs at smaller, single-topic streamers — including apps for cars, golf and food — and that they had gone terribly.

But in the two years since CNN+ shut down, the streaming industry has become unpredictable. Wall Street soured on never-ending spending on programming, and media companies rapidly prioritized profits instead of raw subscriber counts.

As a result, media companies have increased subscription prices and cut costs, producing fewer shows. The programs they have made are broader in focus, aiming to reach the largest audience possible. But those changes have opened the door for specialty services that have far more tailored programming, executives said.

“Ten years ago, it was all about programming that was different and unique,” Robert Schildhouse, the president of BritBox, said about the biggest streaming players. “Now there’s a broadcast-ness that has taken over with the guys who have to program to much broader audiences, and it’s giving room and space to folks who are specialists.”