For a moment, it seemed like the streaming apps were the things that could save us from the hegemony of cable TV—a system where you had to pay for a ton of stuff you didn’t want to watch so you could see the handful of things you were actually interested in.
Archived version: https://archive.ph/K4EIh
Yeah, cable was and is really awful. The amount of ads makes it literally unwatchable. And the shitty thing is that when cable TV was first introduced, the whole idea was that there wouldn’t be ads like broadcast because you were paying for it. And then they moved the goalposts. Something that Hulu in particular was very guilty of. In the beginning, only the free-tier had ads. And there was one paid tier with no ads. Then that started showing ads, and they created a higher paid tier with no ads.
To me, one of the best things about streaming was timeshifting. You didn’t have to wait for Sunday at 9:00pm to watch a show, and maybe miss it, or have to DVR it, and maybe the recording didn’t work. Or whatever. You didn’t have to schedule your time around TV. You could watch what you wanted, when you wanted. And now that’s gone too, with weekly releases of shows, or half a season now, and the other half a month later, and so on. They’re bringing back scheduled TV and it’s fucking bullshit.
Another promise was that we’d be able to basically have access to every tv show or film, and that evaporated very quickly when all the studios decided they wanted to gatekeep everything so they could charge even more for it, and then now we have them disappearing so many things that have been out there just because they don’t want to pay royalties to anyone involved.
So much culture is being lost because of greedy fucking execs who want to use the things you enjoy as an extortion tool. Going back to cable isn’t the answer. It’s a failed model and needs to die. But we need a massive overhaul of the streaming scene to figure this out. Because right now, it’s so much worse that what came before.
Defined narrowly enough, yes, that old model is dead.
But more broadly, as an economic matter there will always be a business model for having a basket of content, with some portion of historical content (classic movies and tv shows from decades past) on demand, some ongoing/current on-demand content (last week’s episode of some scripted show), and live broadcast (sporting events happening right now). Build up enough of a catalog, charge a single price to subscribers for access to that content, and people will pay for the entire bundle. And because each subscriber is interested in a different portion of that bundle, the mass of subscribers essentially cross-subsidizes the fat tail of niche content: I don’t mind paying for your niche if it means my niche gets to survive.
The technological and cultural changes have deemphasized the importance of cable’s live delivery mechanism of 100+ “channels” each with programming on a specific schedule, but the core business model still will be there: subscribe to content and you can get some combination of live channels and a catalog of on-demand content.
The content owners, through either carriage fees with the cable/IPTV providers, or through the streaming services, or everything in between, are trying to jack up the price to see what the market will bear for those bundles. They might miscalculate to the point where the subscriber count drops so much that their overall revenue decreases even with a higher revenue per subscriber (and I actually think this is about to happen). And then instead of a market equilibrium where almost everyone pays a little bit to where there’s a huge bundle of content available, the little niche interests just can’t get a subscriber base and aren’t made available, even if the content is already made.
I mean, you just defined YouTube. It has both live content and on demand, historical and real time, it covers a much broader range than any cable station will ever be able to, and it’s single price to not have ads. You don’t get charged for the service and still have to see ads.
Well, I was trying to give a broad enough description to cover literally every video service, so mission accomplished!
My point is that every service will have different items in each category, and that splitting up the world’s catalog of content into many different services ends up breaking down the economic benefit of bundling. The YouTube bundle is different from the Netflix bundle, which is different from the Apple TV+ bundle, which is different from Disney+ and Hulu, which is different from Max (formerly HBO Max). YouTube has live content, but if you want to watch a specific basketball game live, you’ll have to subscribe to the service with that (and you’ll have to endure ads and product placement as part of that game). And maybe that’s not the $15/month YouTube Premium, but is instead the $73/month YouTube TV.
I finally dropped YoutubeTV for the summer months because we are seldom watching tv over the summer, choosing to spend more time outside. I haven’t missed it at all. They’ll probably get me back next month when college football starts again but I’m leaning pretty hard towards dropping it again after the new year. The price increase, even though it hadn’t kicked in for me at the time was absolutely the catalyst.
That is one part of it. The studios believed that if they did the distribution they’d be able to have a larger slice of the pie. This isn’t working as well as they thought it would in many cases (Disney is likely the exception if there is one with a very large historical catalog and several profitable franchisees) but didn’t realize the corresponding infrastructure and (customer) support costs that would incur reducing the amount that they make.
Furthermore, the residuals (things that are currently at stake in striking) are based on “having it available” even if no one is watching it. This means that studios (and Netflix and Amazon) are strongly incentivized to remove shows that aren’t getting watched sufficiently for the draw of having them there because they’re paying residuals no matter if its being watched or not.
Having a streaming catalog of 10,000 shows (Netflix has about 13,000 world wide by some accounts with about 5000 available in the US) would mean they’re paying small amounts to everyone even if they’re not getting watched. If the company (e.g. studio) isn’t set up around the infrastructure and support needed for streaming, this can easily mean that those small amounts can become more than the amount that the company is making off of streaming.
Ever notice how Amazon Prime Video rotates in lots of B movies that are available for a few weeks and then disappear again? This is to get people to watch them but minimize paying residuals for having a bunch of movies and TV series that no one watches otherwise.
With the combination of race to the cheapest for pricing (and sharing of accounts), and infrastructure / operational costs it is quite possible to be in the situation where studios are losing money on hosting shows and at the same time paying actors and writers far less than is fair… and the easiest solution that studios have to resolve this is to aggressively pull shows.
https://text.npr.org/2023/03/06/1161382179/hbo-max-disappearing-shows-series-streaming-warner (full site for a 26 minute audio version)
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https://www.axios.com/2023/08/09/disney-earnings-streaming-profits
https://www.businessofapps.com/data/disney-plus-statistics/
They’re getting better and have a lot of other revenue that they can use to offset those losses while they figure out how to do streaming more profitably.
All of the following statements can be true simultaneously:
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I am making sure that if someone else reads it who doesn’t know or wasn’t sure if I used the words properly that the up front clarification would avoid them asking and then waiting a day or so to get a response that clarifies their question. While you and I may be familiar with it, there are also high schoolers who are reading this who are less familiar with accounting terms and their specific meanings.
All great points. That said, no one should feel sympathy for Disney’s profit margins.
They can and should spend less on anti-piracy measures to become more profitable.
And Disney could be 100% profit, overnight, while paying their actors and writers handsomely, if they just license their content to a streaming service that knows what they are doing.
You mean by making a better service?
I’m not sure where you got the impression this was designed to elicit sympathy. I was just saying that it is incorrect to say they are making a lot of money/the model of financial success in streaming lol
Fair enough. I’m just getting a little tired of our monopolist companies buying every competitor while burning through venture capital and then claiming they need to raise prices to “survive”.
Totally