To my beloved media and entertainment industry and streaming brethren, it’s time for a little tough love. At The Streaming Wars, we’re rallying behind a new way of looking at subscriber numbers that breaks things down into three buckets: wholesale, third-party direct, and true DTC (Direct-to-Consumer). Why? Because it’s the only way to get an honest look at the numbers driving the industry. But let’s be clear—the industry will never go for it. Why? Because it would expose too much or too little.
If we’re serious about understanding how these companies stack up, this is the transparency we need. We’ve got data coming soon that breaks this all down. Stay tuned.
The Three Buckets You’re Only Hearing a Third of the Story About
- Wholesale Subscribers
Let’s start with the one type of subscriber you’ve heard about. These customers get HBO Max bundled with their Verizon plan or Peacock as part of a Comcast package. Companies like Warner Bros Discovery love to pad their DTC totals with these wholesale subs to make the numbers look good, but let’s be honest—it’s about as direct as getting a gift card in a white elephant exchange. - Third-Party Direct Subscribers
These subscribers sign up through Apple, Amazon, or Roku, thinking they deal directly with Disney+ or Netflix. But here’s the rub: those tech platforms, not the media companies, control the relationship. So, when you see Disney+ boasting about its direct-to-consumer growth, remember that a big chunk of that base is signed up through someone else’s platform. It’s DTC in name only. - Pure Direct-to-Consumer Subscribers
Finally, we have the real deal—pure DTC subscribers. These customers come straight to your platform, enter their payment info, and hit “subscribe” without any middleman taking a cut. This is the gold standard of subscribers because the media company owns the relationship and all the data that comes with it. Companies would instead lump these in with wholesale and third-party subs to make the totals look massive, but we all know it’s mostly window dressing.
Why You Should Care (But the Industry Never Will)
Why won’t the industry get honest about this? The moment it does, it becomes glaringly apparent how few direct customer relationships these companies have. Media companies are uncomfortable reporting these categories because it exposes how much of their so-called “direct” business is funneled through third-party platforms and bundles. Plus, there’s a growing resentment between content owners and distributors—friction fueling even more discomfort around transparency.
And let’s be honest—this whole thing is confusing. Why should a subscriber signing up for Acorn TV through the Acorn TV app not count as an actual direct-to-consumer transaction? It makes no sense, but the industry’s tangled relationships with tech platforms and distributors mean that even something that looks direct is often anything but.
Want to know who’s dying for this kind of clarity? Analysts and traders. You know, the people who actually have to figure out which companies are fluffing their numbers and which are being real. And, of course, my grandma, who’s still working at Publix because she went too heavy in her portfolio investing in Warner Bros Discovery. But let’s be clear—most media execs will never let this happen. Playing the subscriber shell game and throwing “direct-to-consumer” around is way more fun than showing the whole picture.
The Big Picture (And Why It Won’t Happen)
Ultimately, if the industry were forced to report subscribers by wholesale, third-party direct, and true DTC, we’d finally have an honest playing field. But we all know that kind of transparency would blow the lid off the game most of these companies are playing. Instead of parading around their “direct” subscriber growth, they’d have to admit that a large chunk of their base is only there because of some bundled promo deal or sign-up through Apple. It’s not exactly the kind of news investors want to hear, is it?
But here’s the truth: transparency would expose how little these companies control their customer relationships. And if that truth ever came out, well, let’s just say many execs would be scrambling to develop a new narrative.
So, while it makes perfect sense for the industry to adopt these three buckets (and believe me, analysts would love it), don’t expect it to happen. After all, when’s the last time anyone in the media industry voluntarily chose to make themselves look worse?
My Take
I’m unapologetically a DTC guy. If you know me, you know that. That said, I never believed all of these large media companies should have gone DTC. This article isn’t here to claim that DTC is the most important—or the only way—to acquire a subscriber. I just need the industry to realize that to truly assess how these companies are doing, we need to break down these sales channels properly. This is where we start if we want any shot at absolute transparency.
