why streaming is becoming cable again
Dummy・36 minutes read
Streaming services are becoming more like cable TV, with rising prices, reduced control over content, and increased advertising. Only Netflix and Hulu are currently profitable, while newer services like Max and Disney+ are working towards profitability.
Insights
- Rising prices and reduced control in streaming services mirror the structure of traditional cable TV, with major platforms like Netflix and Hulu becoming profitable while newer services aim for financial stability.
- The lack of regulation on streaming services, unlike cable TV, has led to increased advertising, ownership changes affecting content availability, and a shift towards formulaic content creation to attract advertisers, highlighting the necessity for a proposed Streaming Act to address pricing, infrastructure support, and consumer protection in this evolving media landscape.
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Recent questions
How have streaming service prices changed over time?
Streaming service prices have surged in recent years, with Netflix's standard plan now costing $16 and the Premium plan $22.99 per month. Major platforms have seen an average 21% increase in prices, moving away from the initial affordability of streaming services.
Which streaming services are currently profitable?
Only Netflix and Hulu are currently profitable among streaming services, while newer platforms like Max and Disney+ are still working towards profitability. This indicates the challenges faced by streaming services in achieving financial sustainability.
What impact do licensing changes have on consumer control?
Licensing changes and media concentration through mergers and acquisitions are reducing consumer control over content availability. Ownership changes due to mergers lead to content moving between services, requiring additional payments to access the same content, limiting consumer control.
Why are ad-supported plans becoming dominant on streaming platforms?
Ad-supported plans are becoming dominant on streaming platforms to increase revenue through advertising, even for paid subscriptions. This shift incentivizes formulaic content creation to attract advertisers, potentially compromising the quality of shows.
How has Netflix's shift towards original content transformed the company?
Netflix's shift towards original content, like "Orange is the New Black" and "House of Cards," transformed it into a media company. This move towards original content creation has been pivotal in Netflix's success and influence in the streaming industry.
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Summary
00:00
Rising prices and reduced control in streaming
- Streaming services are increasingly resembling cable television, leading to rising prices and reduced control over content.
- Initially, streaming services were affordable, but prices have surged in recent years, with Netflix's standard plan now costing $16 and the Premium plan $22.99 per month.
- Price hikes are common across major streaming platforms, with an average 21% increase in recent price hikes.
- Streaming services are striving for profitability, with only Netflix and Hulu currently profitable, while newer services like Max and Disney+ are still working towards profitability.
- Licensing changes and media concentration through mergers and acquisitions are reducing consumer control over content availability.
- Ownership changes due to mergers and acquisitions lead to content moving between services, requiring additional payments to access the same content.
- Changes in permissions, like Netflix's password sharing crackdown, limit consumer control over content access.
- Ad-supported plans are becoming dominant, leading to increased advertising on streaming platforms, even for paid subscriptions.
- Ads on streaming platforms incentivize formulaic content creation to attract advertisers, potentially compromising the quality of shows.
- Streaming services are evolving towards cable-like structures with higher prices, reduced control, and increased advertising, challenging the previous golden age of affordable, ad-free streaming.
13:50
Netflix's Evolution and Impact on Streaming Industry
- In 2008, Netflix experienced a 26% loss, amounting to a $4 billion decrease in revenue.
- Netflix introduced a streaming video plan in 2007, initially with a limited catalog that expanded over time.
- By extending the streaming plan to all DVD renting subscribers in 2008, Netflix dominated the streaming market.
- Media companies began noticing the demand for streaming, leading to lucrative agreements with Netflix in 2010.
- "Breaking Bad" received a significant viewership boost due to Netflix, altering the media landscape.
- Netflix's shift towards original content, like "Orange is the New Black" and "House of Cards," transformed it into a media company.
- The rise of numerous streaming services, including Disney Plus and ESPN Plus, followed Netflix's success.
- Streaming now accounts for 38% of television viewing, making it the most popular content consumption method.
- New York implemented regulations like the Airbnb ban and a settlement with Uber and Lyft to protect local renters and workers.
- The historical relationship between cable operators and the FCC has shaped the regulatory landscape for streaming services.
28:13
Evolution of Cable Regulations and Streaming Challenges
- In 1979, cable operators fought back against FCC regulations in the case FCC V Midwest Video Corp, leading to the Cable Communications Policy Act of 1984, the first legislation on cable, which lacked strong consumer protections.
- Cable prices surged in the 1980s due to weak regulations, with the Cable Act of 1992 reinstating price regulations and mandating the carrying of Public Access programming.
- The Telecommunications Act of 1996 altered cable operator eligibility, resulting in industry concentration in AOL Time Warner and Viacom, while establishing the Universal Service Fund for broadband infrastructure support.
- Streaming services, exempt from regulations, do not contribute to the Universal Service Fund or carry Public Access programming, leading to the decline of local media and weakened pricing regulations.
- FCC Chair Jessica Rosenworcel has been hesitant to regulate streaming, citing limitations from past acts, as the Supreme Court's Chevron deference has been weakened, requiring explicit legislation from Congress to empower the FCC.
- A proposed Streaming Act is crucial to regulate streaming prices, protect Public Access, ensure fair contributions to infrastructure, prevent monopolization, and address various issues, highlighting the need for societal advancement to align with technological progress.
