Winning the Streaming Wars: Are Megahits Like Stranger Things the Answer?

Netflix, Hulu, Disney+, and other streaming giants are pouring billions into high-profile series — Stranger Things, The Handmaid’s Tale, Euphoria — carefully engineered to dominate headlines, drive subscriptions, and evolve into expansive cultural phenomena. The logic seems intuitive: land a blockbuster, and the subscribers will follow.

But is a handful of megahits really enough to attract new subscribers while keeping existing audiences engaged? The answer, it turns out, is more complicated than the industry tends to assume.

“To an extent, superstar series do matter,” says Anthony Palomba, an assistant professor at the University of Virginia Darden School of Business. “They generate significant buzz and help with subscriber acquisition. But, over time, their impact isn’t as large as the industry narrative suggests.”

Palomba’s recent study examines how superstar series — defined as shows ranking in the top one percent of demand each quarter — influence subscriber behavior across major SVOD platforms including Netflix, Disney+, Amazon Prime Video, Apple TV+, Hulu, and HBO Max. The findings are presented in “Series Superstars: How Subscription-Video On-Demand (SVOD) Content Popularity Drives Provider Demand in the United States,” co-written with Nicole Fleskes and published in the International Journal on Media Management.

The main takeaway? “The future of streaming competitiveness,” says Palomba, “may hinge less on chasing high-performing unicorns and more on systematically improving the depth and consistency of the content library.”

Understanding the Superstar Effect

To investigate what actually drives subscriber growth — a few breakout shows or a consistently strong broader catalog — Palomba drew on a novel data source from Parrot Analytics. Rather than relying on traditional viewership ratings, Parrot Analytics measures audience interest through digital engagement signals: downloads, views, online searches, and social media activity. According to Palomba, this approach offers a richer lens for understanding competition in the streaming landscape.

Palomba then applied the concept of the “superstar effect,” first introduced by economist Sherwin Rosen in 1981, to streaming television. Rosen’s theory explains why, in scalable markets where consumers prefer the absolute best, top performers command disproportionately large rewards despite only modest differences in underlying talent. The result is pronounced inequality in market share and earnings.

In streaming, this means that exceptionally popular content creates spillover benefits within a platform — enhancing brand visibility, strengthening pricing power, and increasing engagement with other titles in the same catalog. However, those spillovers largely remain within the platform. Cross-platform substitution effects are weaker than many executives assume.

Palomba’s research also found that high subscriber share does not always correlate with having the most superstar content. During the study period, Disney+ led the market in the percentage of superstar series — between 20% and 32% — yet it did not consistently lead in new subscriber acquisitions. Amazon Prime Video, with a lower proportion of superstars but a more diverse content mix, often outperformed it on that metric.

Consistency Beats Megahits

One of the study’s most actionable findings for business leaders is that subscribers respond more favorably to a catalog filled with reliably popular content than to a platform built around a few hits surrounded by mediocre filler. Palomba examined “content variance” — the gap between a provider’s most and least popular titles. When that gap is large, subscribers perceive less value in the subscription overall.

“Large variance increases the risk of disappointment and raises search costs, making the platform feel less reliably rewarding from month to month,” says Palomba. “Consumers respond more strongly to platforms with a broad catalog of reliably popular titles rather than a handful of elite hits.”

The Power of Average Popularity

To test these dynamics, Palomba ran simulations modeling what happens when a provider raises the overall quality of its catalog. The results were striking. A 10% increase in average catalog popularity allowed providers to raise prices without sacrificing competitive position, achieve significant gains in new subscriber share — ranging from 3.22% for Disney+ to 5.45% for Hulu — and increase consumer surplus (a measure of the extra value subscribers feel they’re getting from their service) by roughly 3.21% across the market. Importantly, this surplus increase reflects greater perceived value — not necessarily dramatic expansion in total subscriptions.

By contrast, increasing the number of superstar series by 10% yielded much smaller gains in both pricing power and subscriber acquisition. The implication is clear: elevating the middle of the catalog is more commercially powerful than adding another tentpole.

The Multi-Subscription and Churn Reality

The broader competitive context matters. The average U.S. household now subscribes to approximately four streaming services and spends around $60 per month. In this mature market, “subscription fatigue” has set in, and consumers increasingly treat platforms as imperfect substitutes for one another. Because switching services month-to-month is frictionless, price has become a primary differentiator.

“Overall demand is more inelastic than industry narratives suggest. Small improvements in catalog quality don’t dramatically expand the total market but they can meaningfully shift competitive share within it,” says Palomba. “Subscriber demand is less sensitive than many executives assume. Improvements in catalog popularity generate modest—but strategically meaningful—gains in market share.”

Palomba’s research also found that “own-elasticity”—how much a platform’s performance is affected by improving its own content—is significantly stronger than “cross-elasticity,” the degree to which a competitor’s improvements hurt you. Even category-defining hits like Squid Game, The Mandalorian, and House of the Dragon generate surprisingly little cross-platform audience migration. In other words, strengthening your own catalog delivers meaningful returns—but a competitor’s blockbuster is less likely to poach your subscribers than you might fear, as long as you maintain your overall catalog quality.

The Future Belongs to Consistency

The streaming industry has long operated on the assumption that a handful of megahits creates sustainable competitive advantage. The data suggests a more nuanced dynamic, notes Palomba. Superstar series generate headlines and support subscriber acquisition, but they are insufficient to sustain a business on their own. Subscriber retention is driven less by isolated tentpoles and more by a deep catalog of consistently engaging, reliably high-quality content.

Ultimately, the study makes a case for a disciplined, portfolio-driven content strategy—one that prioritizes raising average catalog quality and minimizing the highs-and-lows variance that erodes subscriber confidence. That approach, Palomba’s research suggests, offers the most durable path to pricing power, subscriber retention, and long-term viability in an increasingly crowded market.

“Series Superstars: How Subscription-Video On-Demand (SVOD) Content Popularity Drives Provider Demand in the United States,” written by Anthony Palomba and Nicole Fleskes, was published in the International Journal on Media Management in November 2025