There are more streaming choices than ever – why are prices going up?
theverge.com
theverge.com
Low subscription prices are sustainable when the subscriber base is growing and continually bringing in more money, but at some point most of the customer base has been reached and then the only way to increase revenue is to raise prices. Until recently, streaming customers have had their subscription prices subsidized by subscriber growth.
Why can't streaming companies be happy with the revenue they already have? They need to increase revenue not solely because shareholders demand it, but also because the price of content continues to increase, especially when content providers know they have leverage when licensing terms are negotiated. The bigger a streaming company gets, the more eyeballs will see the content, so content providers feel justified in asking for more money. Also, streaming companies generally have libraries of content that increase in size over time, so the total money they pay for licensing will also continue to increase even if the price of each piece of content does not. On top of all that, they need to pay for the infrastructure to deliver all the bytes.
(This is why Disney's streaming service is in such a good spot -- they already own the content, and they have a huge back catalog.)
Say what you will about the cable companies (and they really do suck) but their pricing was not entirely a result of monopolistic practices. Price pressure from content owners was also a major factor, and it is such a strong force that streaming companies can't escape it.
Streaming companies are starting to look like cable companies, because the "system" incentivizes exclusivity of content.
When netflix started, they didn't make their own content, but instead licensed it. They offered fast and reliable services, and the content was tangential.
But as soon as content producers (and other media companies including cable companies) saw how profitable netflix was, they either raised their content license fees, or withdrew it to add to their own streaming service for exclusivity.
Therefore, netflix needed to complete with exclusivity. This is starting to look like the cable days.
I would propose that all content producing companies have to license their content to anyone who is willing to pay, at the "same" price (per user? per year? etc? this is something yet to be decided). That is, a content producer cannot charge one entity one price, and another entity a different price, nor refuse to license it to another entity (in the same way that a store cannot charge one customer one price, while another customer gets a different price).
Compulsory licensing for mass-distributed media is a good idea. Ever since the Napster days I've wished the media market worked kind of like a spot electricity auction market, and any provider could bid on any show.
If I develop a service with a clever new gimmick-- a better recommendation algorithm, a clever social feature, improved accessibility, whatever, it's dead in the water today due to no content. I have to sell out to a big player to have any chance at traction. If I can just pay for a compulsory license, I can focus on the thing that makes my offering unique.
I also think compulsory licenses might provide a desirable social benefit-- separating the artist from their work in the public's eye.
Look how every election year you get the songwriters beefing and suing "I don't want campaign A playing song B". If everyone knows all content can be compulsory licensed, the air of endorsement is gone and nobody has to get inconvenienced or angry.
Not everything covered by copyright is a purely economic transaction. To varying degrees, some or most art is an expression of the artist and means something to them. There's more to seeing someone you disagree with use a piece you poured your heart and soul into than just an assumed endorsement.
It makes a lot of sense to prevent this kind of walled-garden approach and the incremental hassle of renegotiating licenses every time, but the licensing organizations aren't the most flexible or responsible, so it brings its own issues.
A business can still be selective over who it serves though. If company X is caught doing shady, yet legal shit (say, “donating” millions to a political campaign that goes against my interests) I want the right to not license my works to them.
and i don't want you to have that right. Unless said company is proven to have broken the law, this is how you end up with political divides.
A political divide is more like old Dutch pillarisation, where you have some people who read the red newspapers and listen to red music and work for red businesses and go to red schools (and live in red towns), and others who read blue newspapers and list to blue music and work for blue businesses and go to blue schools (and live in blue towns), and very little purple beside.
Purple media is a good thing. You don't have to be a moderate to agree with that.
(Side note: In retrospect, this reads like I'm talking about the US society, but I'm not from the US. You can see the same rifts opening in other Western countries, although probably slower on most of them.)
Hopefully this will once again force content producers to consider the risks of prioritizing profits exclusively, at the cost of convenience and fragmentation. Worked 10 years ago, should work equally fine today.
and it's not because of piracy. It's because these games _do_ absolutely bring in more money, due to the way it's designed to fuel addiction.
There's plenty of games in the indie games market that are original and fresh. But the unfortunate outcome of those games is that they don't bring in as much money, and so any failure dooms the indie developer.
After all, media conglomerates have had 10 years to prepare and perfect their anti-piracy systems. What happens in an arms race if one of the sides stops innovating for a decade?
and yet it's trivial today to obtain any media you want to watch for free. popcorn time comes to mind, but there's countless others.
Fighting piracy is like trying to fight the tide.
There's an argument that music has gone downhill also because of it. You either do well as a band with the first two albums and translate that into tour money or you are gone. I can't imagine that a lot of artists that don't make tour money like Enya would ever emerge these days - no matter how good their studio stuff is.
Quality series creation driven by money flowing from streaming services is one of the few bright sparks in quality entertainment these days other than gaming. If everyone decides to pirate the crap out of that we end up essentially with middle of the road rubbish as we basically are at the cinema now.
I get the frustration about needing to have so many services, it feels like we have just uninvented cable to reinvent it again (I'm waiting for places to start selling packages of streaming) but the benefit at least has been in programming.
Now pirates complain about "convenience and fragmentation." Saying they want a service with everything all in one place.
The truth is that pirates want content for free. Which is fine. I get that. But don't try to package up this belief as some kind of principled "civil disobedience."
You want to watch other people's stuff for free. Own it.
If such a thing existed for TV and movies it would be a no-brainer too. And Netflix was that for a while. Sure, it didn’t have everything but it had enough that I had more good content than I could watch. It’s not that it’s fragmented, it’s that too expensive to maintain 7 streaming service subscriptions. So most people seem to pick one or two, account share to get coverage, and then pirate what still isn’t available.
Ditto for computer games, as everything I care about is always available on one of the three (!) services I use: Battle.net, Steam and GOG. That's an example of low fragmentation. I gladly spend hundreds a year on this. I never have to worry that my favorite game will disappear from my catalog. Never have to worry about DRM servers shutting down and making my purchases worthless.
The same is not the case for movies and series, as the movie industry in particular is still digging its heels and refusing to build something that properly serves its prospective customers. Multiple examples of DRM servers shutting down. Weekly examples of content disappearing from a particular platform, or changing its licensing terms to make it unavailable in my location. You'd have to be a chump to accept these terms.
The alternative should be obvious.
I not sure if there is a 'fix' for this other then reducing copy right.
I suspect that physical stores usually charge the same price to every customer only for practical reasons, namely because they have to display a price. They use as many ways as possible however to override it and apply personalized prices: fidelity cards, coupons, happy hours, student and veteran discounts, partnerships with credit cards or airlines, private sales and so on.
What economic problem are you trying to solve? These companies make an optional entertainment product. Why shouldn’t they be able to sell it to whoever they want? Especially today now that the Internet has destroyed any sort of market power based on distribution channels.
I want to pay CBS, Disney, ATT, Comcast ONCE for each license. If I sign up for DirecTV, Hulu, Prime, Netflix, Youtube how much content am I double or triple licensed for. By making everything a bundle with some exclusive content, they are triple charging the consumer. Prime and Roku are at least a little closer to reality, Movies Anywhere, Vudu, Roku, Apple and Amazon have made some progress here. Pay a CBS or HBO auth price, and it integrates into the interface. There needs to be a way to discount a service when youre already paying a content license elsewhere. (I've written more about how this discount should work before https://news.ycombinator.com/item?id=21482394 )
No matter what playback app I want, once I'm licensed for it, let me play back anything I'm licensed for. I want one license manager. I register all my accounts or pay the license manager directly, and then I can sign into any playback platform with my single account, and that interaction determines what I can see. I can sign into a Roku, Firestick, or AppleTV with my Access Manager, without needing to reregister each account on each platform.
Not really. Licensing fees end up being (more or less) tied to actual number of views. When a piece of content is licensed more broadly the views on any given platform will go down, so the fees will as well.
This makes no logical or arithmetic sense. How does adding more watchers improve profitability if each viewer has the same associated costs? The code is written. You just need content. Either each viewer pays enough for the content that viewer sees, or they don't. If the content
Say what you will about the cable companies (and they really do suck) but their pricing was not entirely a result of monopolistic practices
The cable companies own a lot of the content companies though.
Because each additional viewer does not cost the same as the previous one. Why would you assume that?
Plus, a Netflix membership is like a gym membership. Some users watch a lot more content (and cost more in terms of infrastructure) than others. Much like at a gym, all subscribers pay but only some cost as much as they pay. If a gym only charged people who showed up, the fees would need to be much higher.
If every subscriber cost more than they brought in, Netflix would have gone flat broke years ago. There is a reason shareholders wanted subscriber growth and got spooked when it slowed.
This makes no sense. These services charge a monthly fee. What you are saying only applies to business models that charge a single upfront fee.
Imagine you have some fixed costs per user and some fixed revenue per user. Revenue is less than costs, so in theory, you should make a loss each month.
However, imagine you find a way to have costs lag a month behind revenue: A user pays their fee on first of month n, costs occur on first of month n+1. Then as long as you keep acquiring new users, you can "run away from your costs" by paying your gap with the "extra fees" of new users.
Of course this is completely unsustainable and basically a ponzi-scheme - but I imagine there will be temptation to do this, as long as there is sufficient growth...
In some ways the video/DVD business was better for consumers, because once you've bought the DVD you won't have to go pay more money next year to be allowed to watch it again. The problem is very few people can afford all the DVDs they might ever want to watch.
And let's not pretend that sales would go down. Music is sold like this for a long time, just like copying without permission unfortunately didn't kill Hollywood all this time.
There's also the convenience factor. You're over at a friend's house and decide to watch a movie? Better hope you grabbed the dvd with you or that he has one. Just discovered something you wanted to see? Have to wait a day or two or drive to the store to get it. Oh, not what you expected and get bored after ten minutes? Tough, you won't get your money back.
You’d be shocked to find out how many times I’ve watched Deep Space Nine since I subscribed to Netflix two years ago.
It’s great because most of the episodes are utter garbage, but..
At least $3 of the AU$15 per month I pay could go directly to Andrew Jordt Robinson and the writers for their outstanding work on Elim Garak.
Disney is big - on the film side there's Walt Disney Pictures, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, Searchlight Pictures and Blue Sky Studios
On the TV side, ABC, 20th Century Fox Television, FX Networks, ESPN, and others
I'm not saying Netflix and Amazon won't be able to produce more and more. But completely taking out Disney seems like a whole 'nuther ballgame
I'd be curious to hear more of your reasoning
Instead of everything being on one app, now it feels like you "need" about 9 different services.
Second, even if you could prove they are a monopoly 'to big' you would still need to prove that there is actual harm to consumers. If the Disney streaming service is reasonably priced its not clear how you would prove that.
What would really make far more sense is simply to reduce Copyright laws back to former levels so that things get to be public domain.
It's typical for harm to be argued along just one metric, prices for any particular individual, but I tend to think that's a mistake.
My reasoning is looking at the "long" game here. For example, back in the 80s a production company would "pitch a series" to a "network". The network was a company that paid for the production and in return retained rights on the resulting show which it either aired, syndicated, or resold via other channels (essentially in perpetuity given modern copyright law). As new distribution companies have been built they have started getting their own series and having their own content.
Perhaps one of the better examples of this would be Sterling Manhattan Cable. The company got the idea for the "green channel" where they would license movies from movie studios and show them uncut and unedited to home audiences. With the financial backing of Time Life Inc they managed to launch their service which they called "Home Box Office" (aka HBO). The story of how HBO came to be, how Time Life bought them and then bought Warner and became the gorilla TimeWarner has a lot of parallels to the Netflix story, except that while HBO had to fight to get onto the cables in peoples houses, Netflix gets there for "free" because Internet. If you ever wondered what the Net Neutrality fight was REALLY about it is pretty clear what its about if you read how being able to control HBO's ability to get to customers was the tool that media companies used to get leverage over them, and then has the tables turned the tool that TimeWarner turned around and has been trying to use against streaming companies.
So what happens if there isn't this stranglehold on the "last mile" between users and the conglomerater? What happens to HBO in an alternate universe where they don't need other cable companies to "like" them to grow their customer base? I think that is the world that Amazon and Netflix live in today.
Both Amazon and Netflix have been able to develop relationships directly with production companies without having to be consumed by one of the big players. Over time their content libraries grow, and their audiences grow, and they become the 'first' place a show runs, rather than the second or third. They are starting to win Oscars and Emmys for their content so their production values are coming up to speed and they can be considered "serious" players.
A couple of things I'm looking for; The first is which one will be the first to launch a "news" channel. Amazon owns the Washington Post so they have some idea of what that might take. As I understand it, news shows (aka talking about what is happening outside, no need to get creative) are the most profitable parts of many networks. A news show might add the additional working capital to make the dependency on subscriber numbers a bit easier to manage. The second will be exclusive production contracts. When a production company like Bad Robot, or Fuzzy Door Productions signs an exclusive distribution arrangement with Netflix or Amazon, that will signal that these "channels" if you can call them that go from being "some people have them" to "everyone has them."
Then all you need is time. Old stuff sticks around but it gets easier and easier to produce new and "better" stuff. CGI has cut costs significantly according to Variety and so maybe the old guard loses out.
That's all I got :-)
[1] Robotica
At some point does this just result in streaming from the content producers directly regardless of how that came to be in any given case?
[1] https://medium.com/@ThinkNowTweets/linear-tv-loses-half-its-...
Bundling is also beneficial for allowing some choice as a value-add, as opposed to choice-first like Netflix. There's less friction in the former, less in the way of putting some random thing on and making it stay on while changing programming over time.
I’m currently subscribed to four streaming services, and disney hasn’t even launched in my area. It is too much. I’m going to get rid of a few, and just start pirating content again. There are many shows and movies I can’t get on any streaming service anyway, but the pirate bay carries them all in bluray quality.
and hence the return to channel bittorrent.
https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
I'm almost exclusively renting, at this point. Decent selection and it comes out cheaper.
Skipping 15 minutes ahead using a remote control is virtually impossible.
You cannot turn off auto play. And what it chooses is complete garbage - nothing I ever watched while using it.
Ugh.
It even has live stats during certain sports, and allows you to catch up watching each "key play." That is, when sports were actually happening. Sigh.
Also, from March of this year the price per channel was capped and even the carriage fee has been capped to what the government agency deemed suitable - https://economictimes.indiatimes.com/industry/telecom/teleco...
Though this can end up making the business for some cable TV companies unsustainable, especially on the lower end of the spectrum - some of which were already in losses.
In all seriousness - I believe it really is pressure from Disney forcing their competitors out, that's caused the faster acceleration of prices. It's something that would have happened anyway, but it's more pronounced with such a large behemoth of licensed content joining in to the fight.
I pay $6.60USD per month for Disney+. No way that’s their par pricing. Why would I ever buy my kids a Disney DVD or blu ray?
Your revision makes the point a bit better. They’ve cut out the store. Manufacturer. Etc. So that’s a win win.
Doesn’t mean Disney is happy sharing the profits with me.
Originally, the Disney channel was a premium subscription channel. They started transitioning to basic cable bundling in 1990-91.
I'd be surprised if their strategy involved going after anyone BUT families with kids.
They don't need to get more money out of everybody if they can get more customers.
This is a truly sickening failure of our copyright laws.
I feel like lots of the small/niche services are going to see their subscribers doing the same.
I suspect Netflix will continue to dominate the adult/indie streaming scene while Disney will get a majority of the pop culture market. And pop culture sells in the physical world as well.
Add to that, that the linear tv channels spam me with commercials at a frequency and duration so that it feels like the commercials is the content (which is probably not far from the truth from a broadcasters perspective).
I'd say that the "breaking point" is around $20/month. After that it is no longer possible for most people to have 3-5 streaming services, and there will be a battle for customers, and we're going to see an increase in piracy again.
In Denmark (and possibly more European countries) you can get "streaming bundles" with your mobile subscription with a 10%-20% discount. I.e. Telmore (https://www.telmore.dk/) offers a "Telmore Play" bundle, consisting of unlimited/free calls/texts, 60GB data (of which 32 are free for EU roaming), as well as Netflix, HBO Nordic, Viaplay and TV2 Play (last 2 are danish/nordic). This bundle will cost you $52/month.
Upgrade it to $60/month and you also get unlimited data, a music streaming service (Telmore Music) as well as Bookmate which is a "book streaming service" (not really needed as public libraries are free and offer everything as ebooks anyway)
As prices increase, i think we're going to see more and more deals like this. Netflix etc. will be the new "middlemen" in the coming decades and have less and less direct customers.
As to why it ended up being the cell companies distributing it, i can only guess that the danish (nordic?) cell market was/is highly competetive, and for the past 20 years prices have been downward spiraling. That has changed in the last 5 years or so with prices starting to increase, but the amount of goods/services offered increasing as well. It is no longer enough (in Denmark at least) to simply offer more calling time/data, and we've arrived at "unlimited" at <$50/month.
I'm sure before Netflix raises prices, they ask themselves the question "what % of our subscriber base will we lose, and how much will it hurt the growth rate?"
Presumably, they also do some research. For Netflix, previous subscribers were slowly grandfathered in to the new prices, while new subscriptions paid the full price immediately. I imagine that allowed them to measure the impact on growth and churn before affecting their entire user base, allowing them to reverse the change if they saw it was a big mistake.
Since they haven't reversed the change, one can only assume that it didn't have a big enough effect to justify keeping the previous pricing. Ergo, people consider it to be worth the money. I know I do.
Finally, presumably they arrived at the previous price point by playing with prices, content and advertising until they arrived at a sufficiently large growth rate, so they were at the right price for that time. But many variables have changed since.
Why is there such a demand for the carrier channels? Shouldn't youtube and twitch channels and other content providers increase supply to the point that people don't care about the content that they can get from the carriers?
Are those prices sustainable for the next generation or are carriers milking old customers who just have switched the medium but won't switch content?
On the other hand, with phones going for $1,000+, there is enough money available to be spent. What's the upper overall limit on money that is spent on streaming and entertainment? If people can afford to spend $200 per month on entertainment, it's not unreasonable for streaming services to go for a $100 share.
Though lately it helps that my daughter is home from college now because of the pandemic. She seems to have access to just about every service. (Sharing accounts with friends)
We did watch The Mandalorian via my other daughter's ex-boyfriend's account. I felt a little dirty doing that because they just broke up and his heart was broken.
Between sub $10.00 video games on Steam or GOG, Youtube, and Amazon Prime, it seems silly to pay for more services.
If I'm getting my Internet through Comcast and really want cable TV that bad I might as well go through them and take advantage of the bundles.
i could also live with a system that costs $30 per month but caps the hours i can watch to say, 60. that's 2 hours per day. that would be enough.
now of course with that in mind, i should be willing to pay more for each family member, and then $60/month don't look so bad anymore. however, i'd still want to get all available tv channels for that, and not just a selection
Now participating in society isn't as immediately necessary as air, water, or food, but just staying physically alive isn't really enough for people. They seek meaning in their lives and emotional connections to others, by participating in human society. The Network enables that.
A programme to deliver Network access to everybody who wants it and hasn't gone out of their way to live somewhere crazy makes at least as much sense for a rich industrialised nation as a programme to build sewers, or to demand safe housing for its people.
Fortunately if you want television the Network delivers that too.
And even still, I know several people who fill every spare minute with streamed tv to keep their conscience busy.
Piracy bad I know I know, but there's a limit to how many hoops I'm willing to jump through before I give up and pirate stuff - legitimately finding out how to buy content I want to watch shouldn't be harder than torrenting it.