Streaming service economics


I watch a lot of TV. My friend Erik watches tons of movies, which I don't do that much; he's your go-to if you want to know what recent release is worth your time. But I revel in the age of television we now live in.

Which is becoming a problem.

Not in the couch-potato, get-off-your-duff-and-go-outside sense, though I could definitely use a bit more exercise. But in the how-much-is-this-costing-me? sense.

Used to be TV was the free alternative to movies. You had to sit through 10-18 minutes of commercials per hour, but no out-of-pocket. Then we had cable, which still had commercials to sit through but gave a wider selection of content for a fee. Then satellite gave cable real competition, but it was still the model of pay-for-a-variety-of-content.

Then came the internet. As shows and news and sports went online, we began cutting cords, as it were. I dropped my DirecTV service several years ago when baseball became available to watch online. Cable shows I enjoyed were still out there to see on websites and/or with DVD releases (and Netflix came around, providing easy DVD rentals).

Now it's internet streaming. Cool. At least, cool when it was just Netflix. Then Netflix and maybe Hulu. OK. Netflix and Hulu cost a bit, but it's still way cheaper than paying for cable/satellite.

Today it's a different story. Everyone, it seems, has a streaming service, and each one has some great stuff one wants to see. To subscribe to every service with a show you want to watch you're now having to, once again, pay the amount of money you dropped cable to save. And more services keep appearing.

Some of us work around this by sharing accounts. Netflix in particular wants to crack down on this and make every user pay their own way. If they succeed, I'm not sure it will redound to their benefit—for a lot of us it simply isn't affordable to pay everyone, there's a finite sum to pay out for TV streaming and some services will be dropped.

I absolutely love shows on several services, and most of the best TV is now streaming-only:

Subscribing to all of these services at the no-ads rate would run you about $75 each month. You can save a little by opting for commercials, but not a lot. And that's just today, rates are of course going to eventually go up. So now we're over the cost of cable TV, except none of this stuff is available there. And we're not even counting the lesser-known services like Peacock Premium or Starz.

Is this model tenable? Or will the proliferation of new services that snatch content away from the existing ones, ala Marvel's Netflix originals moving to D+ and Star Treks to P+, reach a breaking point?

One of the chief benefits of these services is that they're 100% on-demand, you can choose what to watch when you want to watch it, but how much is it worth when you're only interested in one or two of the service's offerings? Especially since a TV "season" on streaming is half of what we grew up with on network. Or less—Paper Girls' first season was only eight episodes.

Those of us that are more cash-strapped are sharing for now. The more services make that difficult/impossible the more we'll start to see if this can continue or if the model needs to change and consolidate. Hulu might be the first casualty now that all the corporate merging has brought it under the Disney umbrella; after various rights agreements run their course it might just get absorbed into D+ (which would inevitably up the fee for D+).

I suppose a patient person could wait until a show's season has run its course and subscribe for one month, binge the season, and cancel. Stagger the services you pay for throughout the year. At least with traditional TV you can record stuff to watch multiple times, you can't do that with streaming, so you'd have to be content with one-and-done if you staggered the binges. Or "buy" seasons if/when they become available on Vudu or iTunes or the like.

Anyway. It's a bigger budget item all the time. Eventually it will max out.


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