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Comment by cercatrova | Hacker News Reader

Unfortunately, any aggregator service suffers the tragedy of the commons. At first it's nice because one place has all of the content. As time goes by, each provider of content sees that they could make more money by removing their content from the aggregator and launching their own service. This is true if it occurs in a vacuum, but it inevitably doesn't; each content provider thinks similarly and creates their own service. Now the consumer does not want to pay for each service and will resort to the most convenient option, piracy. If you follow gaming news, you see this happen with regards to Steam and the Epic Games Store. Piracy is a nearly unbeatable service because it acts as the ultimate aggregator with unremovable content. (Yes, there are private tracker sites with their own selection of content, but the vast majority of people use public trackers.)

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The thing they don't seem to understand is that you don't get long-term subscribers from the back catalog. It's the new content.

Which means what they should be doing is reserving the latest season to themselves but making it so that everything else is available everywhere (assuming reciprocity). Then when season one drops on Netflix and Netflix subscribers like it, well, season two is out but only on Disney for the next year. And the customer might actually be willing to drop Netflix for Disney this year if they both have the same back catalog, when it wouldn't be worth it if you have to subscribe to both at once for that.

The result would be that a customer could get all content by subscribing to only one service and no piracy, but only if they're willing to be a year out of date for most of it, which still allows them to get multiple subscriptions from the subset of people with more disposable income. And it's not as if they don't make any money from licensing the old seasons to the other providers -- or make any money when the other providers license their old seasons to them and allow them to get more subscribers.

Their problem is they're overvaluing exclusivity for old content.

I’m not sure you’ve seen Netflix’s dwindling catalog, but they are very aware of this phenomenon and have been pivoting away from deep catalog to originals since at least 2012. I remember once a VP said in all hands, “our plan is to become HBO before HBO becomes us”

Their dwindling catalog is the result of the other services thinking that removing their old content from Netflix will help them. But nobody is going to subscribe to a different service just so they can do a one-time watch of a series that has been on Pirate Bay for five years, so all those companies are really doing is depriving themselves of the money Netflix would have paid them to license that series.

What about the super-series content? netflix just purchased the rights to Seinfeld for example -- probably for an insane amount of money. Or The Office which is leaving netflix in a few years.

Those probably drive new users and retain current ones.

That quote is interesting. I'm not surprised to be a minority but I've paid for Netflix for several years and at no point would I have subscribed to HBO instead (though I did look at doing it, but only for GoT).

It would be nice if media companies could stop trying to own the World and instead be content offering a good service for good compensation. When they get to that point they seem to go "well if we can force people to consume something else that they don't like as much then we can get even more customers". Bleurgh.

OTOH they were willing to pay almost $100 million a year just for rights to The Office.

I wonder if that included the rights to produce new content.

It did not.

NBC already owns the production rights to the Office. Under agreements with the various Hollywood talent guilds, they are required to pay market value for distribution rights such as exclusive online streaming, because that money gets paid to profit participants like producers, actors, writers, etc.

However, NBC is considering rebooting or spinning off the Office with some of the original cast.

Personal anecdote, but the reason i dropped the households Netflix subscription is because they had nothing on their back catalogue i wanted to watch.

I couldn't give two hoots about most of their original stuff which has been laughably mediocre and designed by committee at best, and I have no problem watching it in 5 years time off it's any good.

I just want a media delivery service where I look for something and then it plays, and so far that doesn't exist...

If so then government can take part. Government "technically" buys content of 5+ years old (at fixed price or whatever-measurement they have) to provider, then streaming sites pays a set of price to government to access those content.

This could be fixed legislatively IMO, and should.

If you offer a show for X per view then you have to offer it to all aggregators for that cost.

Tell me the massive holes in that?

As I see it that satisfies the copyright deal, rewards creators and makes works available. Add a 20 year copyright term and I might even be happy!

I'm not sure about other companies, but Netflix doesn't pay per stream. If you license your movie to them you never find out how many people watched it.

In the gaming space we also have Steam and Gog which coexist happily because neither demands exclusivity, each catering to different consumer preferences.

Except you also have Origin and the Epic store which do demand exclusivity and we are rapidly approaching the same situation with video games that we are in with television streaming services. I have most of my games on Steam, but have had to download both the Epic and Origin launchers for one game each. Luckily I don't have to pay a subscription service for each launcher. Yet...

Epic has to pay publishers for exclusivity and most of the time still only gets one year of exclusivity. Steams strength was always the long tail, and personally I'm not that worried about getting games a year later.

EA (Origin) and Activision/Blizzard (Battle.net) have their own launchers and don't publish on Steam. But while those are some of the biggest brands it's a tiny portion of the overall industry: maybe 4-10 dozen exclusive games in Origin + Battle.net + Uplay + Epic Store, but a few thousand on gog and a few tens of thousand on Steam

Steam has just nipped Epic in the bud by saying you can't sell on Steam whilst you have an exclusivity contract with Epic.

Discord is/was a games launcher too and they just shuttered their subscription service as nearly no-one was playing the games that came with it.

> Steam has just nipped Epic in the bud by saying you can't sell on Steam whilst you have an exclusivity contract with Epic.

Huh? I thought saying you can't sell on Steam is kind of what an exclusivity contract with Epic does.

He probably meant to refer to Steam no longer allowing store pages on Steam for games that are Epic exclusives.

> As most PC gamers know by now, the Epic Games Store has been signing exclusives to its digital distribution platform. Unfortunately, some of these games already had Steam Store pages, creating the expectation for some that it would be launching on that service in the near future. Now, some reportedly recent Steam TOS changes may very well halt this practice entirely.

- If you put up a Steam Store page, you can’t release the game earlier on another platform. - Any patches/updates must be released for Steam at the same time as they are on other platforms. - Games can be released on other platforms, but you can’t put up a Steam store page until 30 days before the Steam release or the game’s original release, depending on which of the two is earlier.

Internet radio has figured this out, mechanical licensing. What is stopping netflix from lobbying and campaigning for something similar?

Netflix doesn't want mechanical licensing because they would have to reveal viewership numbers and for some reason they treat that like a big secret.

Because it is a huge secret. It lets them negotiate for content with a much more accurate price than even the producers.

Which they wouldn't have to do with mechanical licensing right?

Apart from giving a better negotiation position, viewership numbers tell you what people want to watch.

If you (think you) know what people want to watch it becomes easy to cheaply produce new content guaranteed to sell.

This is almost certainly the nexus for much of the original content coming out of Netflix.

How exactly is this a Tragedy of the Commons effect?

https://en.wikipedia.org/wiki/Tragedy_of_the_commons

from wikipedia you linked

> tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users, by depleting or spoiling that resource through their collective action

The shared resource is the amount of money spent by consumers to watch content.

The individual users are content producers and aggregators.

It is in their self interest to own the last mile of content distribution, as they get more money this way than by licensing to others.

This action, collectively, spoils the shared resource by reducing the amount of money that consumers are willing to spend on watching content. They don't want to maintain multiple subscriptions to watch just one or two shows, or different series of the same show, and so maintain less subscriptions than if there was just one or two services with all the content.

The tragedy of the commons is not just any nonrational behaviour. It's a specific case where there is some property or resource held in common, and actors or agents can act to privatise gains whilst collectivising costs.

The classic case illustrated in Garret Hardin's 1968 essay is a common field, with a fixed carrying capacity, at that carrying capacity, in which one herdsman chooses to run yet more cattle. The total yield goes down, but the defector's yield increases. Since the gain is private and the loss is shared, the net incentive is to overgraze.

Calling the subscription spending market a commons seems a stretch. That's never a shared resource, it's always one which accrues to specific provider(s). Though the tendency is for it to accrue to a winner-takes-all provider.

And more crucially, there's no socialised loss here that I can see. There is a race-to-the-bottom dynamic possible with excessive competition, so long as offerings of one providers catalogue cannot be shared with others.

The problem instead seems to be simply one of falling marginal costs, such that the largest provider has the greatest efficiencies, and that with a sufficiently subdivided market (multiple subscription services), no one provider has a sufficient catalogue to sufficiently interest any one viewer, but the monetary and other costs (choice, selection, management) of multiple services is too high for any one subscriber to choose more than a small subset of services.

That's not a tragedy of the commons, it's a natural (network effects) monopoly situation.

(I'm aware you're not the original poster. I'd hoped they might respond.)

The common here is the set of customers willing to sign up for a subscription nobody owns these people. Staring another service (adding another cow) is a gain for the service owner, but the set of people willing to pay for subscriptions goes down.

If your favorite show goes from service A to service B, you might switch, you might maintain both subscriptions, or you might decide neither is individually worth it, and either stop watching or start pirating.

Even if service A does not lose shows, its no longer getting shows at the same rate, so the quality of that service goes down, with nothing of similar quality to replace it. So again some customers will stop paying and the commons shrinks.

So, I'm considering this, but I really don't see it.

Yes, there's a shared, limited, resource pool. But that's true of any constrained economic resource.

The element of privatised gain / socialised loss is what's missing. Any given entrant has an all-or-nothing proposition. But gains precisely match others losses, assuming a fixed pie.

The marginal/average cost dynamic is a red herring here, so far as ToTC goes.

The privatised gain is that a content producer who was previously licensing their content to a streaming service, and starts their own streaming service, makes more money streaming than by licensing.

The socialised loss is that fragmentation of distribution makes people less likely to pay for any service. By trying to take a bigger slice of the pie, they make the pie smaller.

I don't see this problem with music streaming (although they have tried)

Do they finally offer mainly DRM-free music? I think I saw at least some mp3 offers from Amazon, but haven't looked closer at music streaming for a long time, since other sources are numerous.

For music it is one of my expectations. I have strange and sometimes old devices for playback. Not really interested in locked down content here.

Itunes for example is DRM free.

That is actually quite nice. Apple does good things from time to time, I just don't like their devices. But I think there are ways to access iTunes without an Apple device.

You can use iTunes purchase from the iTunes store on Windows.

And, as of very recently, there is an Apple Music web-app (https://beta.music.apple.com).

But Apple Music is streaming-only with DRM, not DRM-free downloads.

When you purchase a song from iTunes, it is DRM-free. When you download it through Apple Music, it is not.

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