Streaming services are gaining traction in the entertainment world. New challengers like Disney and Warner Bros are entering this competitive field. And yet streaming as a home-based entertainment concept is still relatively new. It has only gotten popular in the last ten years.
But as trends tend to do, some old habits never die out. Especially when there’s more money to be made. And when it comes to the traditional cable model, there’s a lot of dough to go around — even for streaming services.
Let’s delve into the future for a bit, and speculate what’s in store for streaming as a medium.
The Cable Bundle Model
Before looking to the future, here’s a quick overview of the history of television subscription models. It started with cable and satellite companies negotiating for content (channels) with studio networks in Hollywood and beyond.
At-home entertainment has progressed a long way from those early days of channel subscriptions. Viewers could subscribe to individual channels of their choice. They only needed their cable provider, who then paid the network.
Later on, in the ‘70s, as more channels appeared, cable companies switched to a bundle system. It offered customers a cheaper option than paying for every channel separately. It was also a much more lucrative business model for everyone involved and meant studios got paid in carriage fees. It brought in big bucks for networks, who still got paid per viewer. It also allowed smaller, niche channels to establish a more certain foothold.
Though now, of course, the world is in the midst of another entertainment revolution with the cord-cutter movement. Thanks to massive influencers in the biz, like Netflix and Amazon, streaming has become the major new horizon for studios and networks.
Streaming Opens Up New Opportunity for Studios
Netflix’s network-agnostic platform drew in millions of viewers. In a way, it set up the prosperous streaming industry as we know it today. Many networks agreed to license their content to the platform, not expecting it to grow as much as it did. They may have looked on in envy as the platform they sold their intellectual property reached success.
Sure, cable TV might still be rolling in the big bucks for networks right now. But that reality is changing as more consumers adopt the cable-cutting movement.
It is a profitable venture, and network execs wouldn’t want to miss out on cashing in before it’s too late. Not only did Disney buy 60% of Hulu, but they removed most Disney content from Netflix. Instead, the content found a new home in Disney+ on November 1 last year. Other media giants have seen the proverbial light too. Now they are scrambling to catch up.
There are also plenty of benefits in switching to a direct-to-consumer model. For one, the networks can cut out the cable middle-man. And they can charge consumers whatever they want. It’s not hard to imagine this evolving into different cable-esque packages or bundles either. Streaming services offer different pricing tiers, sequestering commercial-free and premium content behind higher subscription fees.
Not Everyone’s Happy About the Massive Influx of Streaming Services
It might be great news for studio networks, but consumers aren’t all too happy about this new development. No wonder why. Having to pay $10 – $20 per service to access network-owned shows instead of getting them from one or two platforms isn’t positive progress. Especially for those who cut the cord to get away from cable/satellite prices for channels they rarely watched, to begin with.
Then there’s the added issue of availability. Netflix might have expanded to a worldwide audience with Amazon following hot on its heels. Other streaming services like Hulu, HBO Now, and Disney+ are still only available in a couple of countries. Of course, this might change down the road, but for now, it’s a significant problem for international viewers. That’s one of the reasons VPN services became so popular nowadays. They enable you to connect to a VPN server in another country and thus watch content that otherwise is geo-restricted.
Let’s take The Mandalorian series as an example. The Star Wars franchise has fans all over the world, but Disney+ is only available in six countries. The fans from the United Kingdom need to wait for the Disney + launch until March 31, 2020. Most countries don’t even have launch dates yet.
Streaming seemed to be the new horizon for in-home entertainment, and in many ways, it is. But as they say, history has a way of repeating itself. Streaming might not be the escape from the expensive cable structure that some were hoping for.