Welcome back to What I’m Hearing+, my new weekly complement to Matt Belloni’s flagship property, focused on the streaming industry and the analytics behind it all.

Tonight’s email is inspired by the thoughtful feedback from my call last week with Inner Circle members. I’m addressing some of the biggest questions and challenges facing Hollywood as the streaming battlefield subdivides and the emerging players—Apple, Paramount, Peacock, WBD, etc.—choose specific strategies to fit their evolving needs.

But first…

• Dahmer eats up the competition: Everyone is obsessed with comparing House of the Dragon to The Rings of Power, but one of the clear winners this fall is Netflix’s Dahmer. Ryan Murphy’s true crime series starring Evan Peters has become Netflix’s fourth-most-watched show debut ever (as measured within the first 28 days), with 701.3 million hours viewed. And Dahmer did it in just 21 days. It’s also Netflix’s second-most-watched English-language debut, though well behind Stranger Things 4’s gigantic 1.3 billion hours. The series is everything that Netflix’s nine-figure deal with Murphy promised: a zeitgeist moment, massive engagement, and subsequent interest in other Netflix programming. Two documentary series on Dahmer and John Wayne Gacy cracked Netflix’s Top 10 this week. Is this now an American Horror Story-style franchise? Murphy has managed to keep AHS going at FX for more than 10 seasons, but it may prove more challenging for Netflix.

• Netflix’s Knives Out win: Netflix’s oscillating relationship with theatrical distribution is a constant source of industry banter, but the company made one of its biggest moves in years by striking a deal with AMC and Regal to bring Rian Johnson’s Glass Onion: A Knives Out Mystery to 600 theaters for a single week in November before the movie hits Netflix in December. This isn’t the first time Netflix has released a film in 500-plus theaters (the company also did it with Army of the Dead and Cinemark for one week). But it’s a vanquishing shot in its ongoing negotiation with exhibitors. The largest movie chains have now effectively determined that a one-week exclusive release is acceptable, setting a low negotiating bar, even at a time when the exhibitors need new releases. The move will also allow Netflix to further its experimentation, collect data, and potentially shift strategy accordingly.

• Why would ‘Late Night’ move to Peacock?: A well-circulated New York Times piece over the weekend suggested that Seth Meyers’ late night show could move to Peacock, presumably to aid the underperforming streamer while lessening NBC’s commitment to a yesteryear late-night strategy. This seems like a terrible idea. Late night’s dwindling linear audience isn’t going to shift to streaming. The shows already thrive on YouTube thanks to digestible clips, the metatag system that games algorithmic recommendations, and a growing white-label advertising business. Instead of moving Meyers to Peacock, NBC might think about an innovative way to grow his global audience on YouTube.

We are indeed entering a great rebundling period, but the transition will be slow and steady and incremental. It will likely encompass M&A, ecosystem building, and cross-industry leveraging. Each of these avenues create bundles to satiate different needs. And taken as a whole, they will determine the winners and losers in the space.

Apple, for instance, bundles Apple TV+ within its Apple One services package to theoretically create a more valuable product that ties customers to its hardware platform. This type of ecosystem bundling is seen prominently within Amazon Prime, too. Paramount, meanwhile, is bringing Showtime into Paramount+ as part of a new bundle as a scale play. It will theoretically grow the company’s main DTC platform rather than trying to build two revenue streams with two different audiences. The company is also partnering with Walmart to reach a retail audience that can potentially help scale Paramount+. This is the most likely form of bundling that we’ll see play out over the next few years—the streaming equivalent of airlines partnering with credit card companies, or Spotify working with Hulu. Reaching new audiences by becoming part of a necessity (shopping) or daily habit can help encourage usage and discovery from consumers who wouldn’t subscribe otherwise. (Though if you ask me, Walmart got the better end of that deal.)

We’ll see more bundling because the financials seem to dictate it. The profit margins on streaming are much smaller compared to broadcast and cable. Scaling in both domestic and global markets isn’t happening as quickly as many would like (save for perhaps Disney). So finding ways to reach new audiences through partnerships, even with potential downsides like revenue sharing and non-exclusive customer data, may help the biggest players hit the numbers that Wall Street desires, at least in the short term. Herewith, some of the biggest questions facing the industry, and at least some of the assumptions about what the answers might be.

Paramount, despite a complex narrative owing to its recent history and governance, has a lot to be proud of. Paramount+ maintains a 5.1 percent demand market share of streamers in the U.S., according to Parrot Analytics, where I work as director of strategy. And Paramount, as a whole, holds 12.4 percent of all demand across streaming and linear, putting it just behind Disney and Warner Bros. Discovery. Paramount series across CBS, Nickelodeon, The CW, and Showtime have consistently tracked on Nielsen’s weekly Top 10 list, including procedurals like NCIS and Criminal Minds. Paramount has generated meaningful revenue from licensing its series and films, exclusively and non-exclusively, to competitors like Netflix and Hulu, but Paramount C.F.O Naveen Chopra has spoken about pulling back on that strategy to drive growth on Paramount+, following the strategy Bob Iger set at Disney.

This is all impressive and suggests that Paramount, which has a market capitalization of just $12 billion, may have undervalued content—extremely undervalued content—trapped in a hard-to-parse company strategy. But Paramount+ has 43 million global subscribers. That’s 1.5 million less than Disney+ has domestically. It’s a tough race to compete in as both distributor and supplier.

Finally, while Paramount’s free ad-supported television player (FAST), Pluto TV, is seeing continued growth in usage each quarter, there are concerns that the space is vulnerable long term because so much of the content is non-exclusive and doesn’t encourage stickiness among consumers, which can negatively affect usage and ad revenue. I wouldn’t count out Pluto TV just yet, and would argue it isn’t respected enough as a key player in Paramount Global’s streaming strategy. But murmurs about whether FAST is a reliable bet are beginning to spring up.

Paramount may demonstrate that an extraordinary library doesn’t equate to instant scale. But that may be a problem that Redstone lets the next owners figure out for themselves.

Peacock continues to find itself in the murky middle. Sports fans will subscribe to Peacock for exclusive games, and cord-cutters may like that Peacock can serve many of their needs alongside Paramount+, Apple TV+, ESPN+, and Amazon Prime Video. But sports rights are getting more expensive, and it will require a meaningful investment from Comcast for Peacock to continue competing in that space—investment that may come from other programming pockets. Peacock also has a fantastic library offering, but it’s not enough to get subscribers in, at scale, and take them away from Netflix or Hulu. (NBCU executives will argue that a tipping point will occur when extant company I.P. is returned to the platform after franchising deals end and cannibalization decreases.)

At the center of every conversation about streaming, whether it’s Peacock or any other app, is why someone should have a service. There is so much to choose from, it’s so easy to cancel, and there are so many apps fighting for attention outside of traditional entertainment. Companies looking to survive the next few years in these streaming races need to step back and ask, “What exactly do people get from us, and what aren’t people getting that we may have an opportunity to dominate in?”

Where Peacock can really thrive is with networks like Bravo. Low cost, highly in-demand unscripted content that has obsessive audiences across younger and older generations. Real Housewives, Summer House, Vanderpump Rules, Below Deck… the list goes on. There’s an opportunity to create a streaming platform that is exactly what cord-cutters are looking for—sports, unscripted “snackable” programming like the Dick Wolf universe, some new original series, all beloved by advertisers—without having to spend top dollar and compete against HBO, Apple, Amazon, and FX.

And the opportunity is massive: Dancing with the Stars was pulling an average of 18-20 million viewers over the course of each season between 2006 and 2011, according to Nielsen. Sure, the overall audience has dropped over time: The 2021/2022 season had just under 5 million average viewers, a remarkable 75 percent decline (roughly) in the span of a decade. But the audience, itself, is still eminently valuable in a world where the streamers are fighting to build library value for particular demos, such as people over 60, which Disney+ lacked and Dancing with the Stars had locked down.

This sort of audience targeting can indeed have immense strategic value. When Hamilton hit Disney+ in July 2020, for example, Chapek boasted that the musical didn’t just bring in new subscribers (Hamilton increased Disney+ signups by 641 percent, according to an Antenna note from October 2020), but also new demos that Chapek referred to as “an audience we don’t really get that often on Disney+,” according to leaked audio from a Disney town hall meeting, as reported by The Verge. That’s great! Expanding the total addressable market by finding new audiences is key to scaling an otherwise general-interest DTC product.

The trick, of course, is retention. A large number of people (about half of those customers who signed up for Disney+ to watch Hamilton) canceled their plans within six months, according to Antenna. There was nothing else for them to watch if they weren’t interested in Star Wars, Marvel, or princesses. Dancing with the Stars shouldn’t have that same problem, given that it airs weekly, and especially now that Disney is pushing its streaming bundle, which includes Hulu and ESPN+, giving older audiences more of a reason to hang around.