Streaming service prices have more than doubled since coming onto market
techdirt.com
techdirt.com
Ah, but one must remember, we are in the streaming situation we are in now because the consolidation already happened. Netflix was The Streaming Service. But the content providers to Netflix looked at Neflix's profits and said, "Hey, we could have a larger slice of the pie if we ran our own services." So they went off and made their own. And, yes, they discovered they were wrong.
But even if they consolidate again, it's just the nature of a MBA-executive in a content producing company to look over at the consolidated streaming service and say, once again, "Well, my predecessor couldn't make it work last time, but I'm sure that I can get a larger slice of the pie if I just make my own service. And look, customers will flock to my service because according to my numbers we can charge them a mere $9.99 a month whereas the consolidated service is $109.99."
Streaming service consolidation requires all the MBA-executives to humbly submit to the idea that they have no effective choice but to fork over control of the revenues to the consolidated streaming service. Who will, of course, be taking full advantage of their position to squeeze the content providers and push them as hard as they possibly can in the direction of the economics of running their own service making sense again.
I don't know that there's a stable solution to this. If there is I don't think it's the naively obvious consolidation solution.
> Disney’s streaming operation lost $512 million in the most-recent quarter, the company said, bringing total streaming losses since 2019, when Disney+ was introduced, to more than $11 billion. Disney+ lost roughly 11.7 million subscribers worldwide in the three months that ended July 1, for a new total of 146.1 million.
It seems unlikely they were losing money on the Netflix licensing deals.
I mean, if they're really losing half of a billion dollars per quarter, they'd need to do something like doubling their subscriber count to even approach breaking even. Is that really the case?
It looks like maybe WB is doing OK: https://www.hollywoodreporter.com/business/business-news/war...
But in general, Netflix was in a broad Silicon Valley sense profitable at the time (in that I don't recall and I'm not going to dig it out, but if they weren't profitable, they were in a growth mode and definitely pulling in revenue and choosing debt-for-growth, which isn't really the exact same thing as straight-up losing money), and the competition is losing billions at a time. That's not a "larger slice of the pie".
Maybe they'll make up for it later, but at the moment I wouldn't bet on all of them managing it. I actually think the recent Hollywood strikes were darkly funny; the writers were striking because they want a bigger slice of what they perceive to be that sweet, sweet streaming money, whereas almost all of the news about the actual streaming services is them losing billions. When the real numbers come out we'll probably hear accusations of more Hollywood accounting, and while there will be some truth to that (inevitably), Hollywood is already reporting huge streaming losses when it is actually against their interests to do so.
Though, I suspect this is Hollywood accounting so that they can avoid paying royalties.
Once they have to pay out more people based on streaming success, their incentives become more mixed. But at the moment, if anything I'd say their motivation would be to minimize their streaming losses.
Of course we're not going to see that solution for many reasons.
D+ for a month is a lot cheaper than paying 20$ for The Last Jedi, but they are happy to take 20$ from you.
I thought that £7.99 for D+ was pushing it as there was a limit to the content that we wanted to watch.
Pay for that over multiple months, and you own nothing at the end.
Should have bought the discs instead. At least then I could continue to watch that content at leisure, without spending any more.
I mean, sure, Best Buy evidently thinks this is the right time to exit physical media. They might be right. But "never coming back" seems like an a possibly overly confident prediction at a time when the major substitute causing the decline is on fire?
The previous physical media world existed without ad-supported and subscription based streaming / social media competition for eyeballs and vast majority of people are going to choose that v. buy physical media.
I just quietly download copies of media I may want to watch to an archive NAS so that they'll always be available when I want to watch them. I don't try and justify this to myself as a good thing; it's just the pragmatic thing I do because I don't like being at the whims of some publicly traded company or other (I've had WAY too much of that in my life). Most of my friends do the same.
Netflix bought DVDs to ship out as rentals. Content providers had no say (first sale doctrine?).
Netflix then saw that streaming was going to eat the legacy physical-disc market and pivoted.
At this point, streaming was a new revenue stream. Most content provider money was still coming through cable/broadcast. So they said "Sure, we'll license you a bunch of stuff for cheap to do this thing we don't care about."
Streaming's growth led to it overtaking other revenue streams. At this point, content providers looked at the numbers and said "The main channel for eyeballs is getting our content for cheap. We should do something about that."
And then built their own streaming services, e.g. Hulu.
The biggest miss here seems to be by Google and Microsoft. Why, for the love of profit, didn't they say "Hmm, we have data centers, software expertise, and bandwidth... let's build a B2B streaming platform offering for content providers."
Now that industry is stuck in a situation where they wrecked their own income streams, expectations have been set with customers about what streaming costs, and they are scrambling to figure out how to re-gain that income but no one wants to go back to those pre-streaming prices.
This whole problem was one of the foundational issues behind the recent writer and actor strikes.
I think Netflix, Amazon and Apple were sort of that for a while, with all the deals they were cutting with production companies..
But in the end it was just Meet the new boss, same as the old boss..
At the end, it's the startup problem. Would you rather gamble all your money and get all the winnings? Or get a salary regardless of how things turn out?
Bear in mind that you’re talking about Ballmer-era mobile’s-no-big-deal Microsoft here, not Nadella-era reimagine-the-company-around-cloud-and-services Microsoft. That kind of smart strategic offering was never going to happen during the time period it would’ve needed to happen.
Netflix was started with streaming in mind from the outset. It's in the name, for one thing. They didn't pivot, (they only stopped their DVD mailing service this year, I believe,) they just started streaming as soon as the hardware, software, and network could be built up to a point where it was feasible financially.
Netflix was always intending to stream movies via the Internet. it wasn't possible when the company was founded, but streaming was the vision from the outset. they began the dvd-shipping service to build the company and bootstrap their way to the streaming service.
I've read this in multiple places, but I'm not going to do your homework for you.
Prevent all exclusivity deals, and force identical pricing on all streaming platforms.
Do this, and we'll have competition for stability, and cost.
And it's 2023 ffs. There should be a backend deal, where you can watch anything ever made, and the streamer can on demand snag from the studio if rare. EG "Please wait 2 minutes, while we snag and cache super-rare content from studio X." This sort of dynamic arrangement should be so logical, but instead, I have 120TB of storage. All with rare, hard to get media.
Because the people that own it, won't make it easy to consume.. if they'll even keep it available.
In addition I'd add, force identical pricing for all TV/Movie actors auditioned for same role. All players same salary for same position in team. That will definitely change landscape for sports and entertainment business.
Those MBA's are doing what they were hired for under a capitalist model. Their companies controlled IP's and those IP's are profitable outside of the Netflix umbrella, which ended up being true considering the success of Disney+, Hulu, etc. Of course now you're seeking a equilibrium. Will lower-tier offerings work like some no-name services or services with lesser content like Paramount? Maybe some players won't survive this, but that's also part of this model.
Not to mention nearly all these services opened with predatory pricing. Disney+ was not going to work at $7 a month, but it got people to sign up, maybe cancel with someone else without predatory pricing, and now Disney just needs to boil the frog to higher prices. Under capitalism these anti-consumer tricks are perfectly legal and oddly acceptable. It seems now we're in the stage of the capitalist entrepreneur cycle where predatory pricing is out the door, and everyone is clamoring to get to the price point that works. All the players who would make a streaming service already have, so this little masquerade can stop.
It just may be the case that your average US household can afford $150 in streaming services and everyone is just fighting to get that, which is close to what they paid with cable before streaming with inflation. This is the goal, not "lowering prices for good American families" and other dishonest marketing. If there's a $150 slice to be had per household, then capitalism will extract it. Or more, then people will revolt, cancel, and that will lead to price cuts and maybe some consolidation (say two weak services combine).
I find it amusing that Americans who claim to love capitalism, actually dislike what it does, and instead quietly pine for socialism without knowing the word or concept. "Hey why dont all these inefficient companies just combine already? With strong consumer protections? Under a non-dishonest marketing scheme where efficiencies and where they co-operate deeply to maximize value and lower prices?" That's not the system you live under. Instead companies will fight each other, steal marketshare, raise prices, etc and maybe there's efficiencies there, but often not, but what matters is learning what the consumer can pay, and charging her that exact maximum.
Which is what's happening here. No one but account sharers and college students etc are cancelling. Middle America isn't cancelling Disney or Netflix anytime soon. Maybe paramount or a weaker service, but everyone is in contention for that $150 and they're going to fight for it. It makes no sense under capitalism to consolidate back into a Netflix-like service. Its not going to happen again. Netflix was just capitalism getting there, but now that replicating the Netflix model got easier thanks to the cloud, these big IP holders just made their own.
Imagine asking "God I hate paying to the Disney parks, why don't universal and disney and MGM just make one big park with all their IP run by another profit-seeking entity?" That would be absurd to ask under capitalism, but people are asking this for streaming?
Predatory pricing is illegal, and the first sale doctrine is core to how capitalism works. Similarly, current copyright terms are laughably long.
The problem here is not capitalism, it is corruption: The US has laws that will not be enforced, or that have been modified via regulatory capture / bribery.
Had waving this with a vague "but but corruption" ignores the forest for the trees here. Not to mention your comment is provably false. Even the least corrupt capitalist states suffer from the exact same mechanisms and their own streaming prices are going up as well.
A probably-dumb idea that I haven’t seen discussed anywhere: a federation of services (I pay $30/mo to the federation -- if I spend 2/3 of my time on Netflix and 1/3 of my time on Hulu, then Netflix gets $20 and Hulu $10)
Look at music streaming. Music was a crusty old industry rife with nepotism and abuse of artists, where some big companies scooped up all the profit. It was heavily disrupted, but the artists and their agents were free to list their music on any service, no exclusivity required, the services were just conduits that took a small cut. Now, that's mostly the world we live in.
The problem with video is that a single artist with a computer can't usually make a complete season of a TV show or a marvel movie. It cannot be disrupted in the same way because content cannot be produced unless big players are involved, its just too cumbersome and expensive.
But you already see that it's moving to the music model anyway, more people spend time watching tiktok, Instagram and YouTube than they spend watching TV shows and movies. And, with compute becoming cheaper and AI generated this and that, soon it will be possible for a single artist with a good computer to make good content. The key thing here is that video content will move the way music content did, except the incumbent content producers will not make it to the other side, whereas with music they can.
I gave up. I cancelled my streaming services.
I bought a mini PC (<$100). I started buying blu-rays on FB Marketplace and pawn shops ($.75-$2.00 each). I'm ripping them to a big harddrive (12TB, ~$200). I have Jellyfin installed (Open Source, Free). I bought a digital antenna ($130) and capture device ($200) compatible with Jellyfin. I set up SSL certs and DuckDNS (free). I integrated it with Home Assistant (free).
I can now watch my movie library or live tv from anywhere, and I have all of the bonus features from the disks. It's private!!!! I'm not being tracked. There is no profile anywhere that says "he watches this or that for X amount of time at Y part of the day, and travels to A and B".
I had subscribed to Netflix for over 16 years. Then, when they "cracked down" on my mother accessing it (I had stopped using it myself), I decided that enough was enough.
I don't care if it cost a lot to set up. This is mine, and I will NEVER go back to paying them a subscription.
Lesson: Don't anger the nerds. They can replace you. They will replace you.
[1]: https://www.theverge.com/2023/10/13/23915567/best-buy-discon...
If they'd just sell me a DRM free digital version, I'd be all over it. I'd probably end up paying _more_ than I do in subscriptions knowing I can watch how I want, when I want, for as long as I want.
I spend way more than $15/month on bandcamp for DRM free music (vs Spotify plan), give more money to artists, and cut down on streaming costs of the platforms.
I'm currently just ripping my CDs (flac), but am completely undecided about new purchases.
"All songs offered by the iTunes Store come without Digital Rights Management (DRM) protection. These DRM-free songs, called iTunes Plus, have no usage restrictions and feature high-quality, 256 kbps AAC (Advanced Audio Coding) encoding."
https://support.apple.com/guide/music/intro-to-the-itunes-st...
Also a regular Plex user so would like something that integrates with it to handle antenna / live recording.
I got it because it can stream to more than one person simultaneously (although I haven't tested it thoroughly yet).
There's supposedly some issues with the newer encodings and Jellyfin itself (just watch any video on YT that talks about the HD Homerun Flex 4K and Jellyfin), but it's all good for me so far. I don't know if Plex users are affected.
I was able to pick up 41 channels, but I only got a 70 mile antenna, and the big cities are much further away, so I'm happy with it.
I’ve yet to go all the way with an antenna and capture device, seemingly waiting forever for ATSC 3.0 broadcasts in my area.
Do you mind if I ask how large the screen is that you view it on? I'm watching on a 65" tv in my living room, and artifacts are visible during high-action sequences.
However I'd consider Neil Postman's excellent book "Amusing ourselves to Death" on why Americans (and perhaps many more countries now) are obsessed with entertainment rather than why entertainment is so expensive
Maybe a lot of people on this forum, but that doesn’t mean much.
Piracy used to compete with the complete inability to download TV shows and movies and conveniently watch them on a regular TV.
That’s not the world of piracy as it stands today. You have to put significantly more effort into piracy than you do to subscribe (or unsubscribe) from a streaming service.
You can’t just download stuff on BitTorrent without setting up a VPN, and the Usenet stack requires a whole bunch of technical knowledge to setup for yourself. Governments play whack-a-mole with tracker websites.
I have a real life example of this from the other day. My friends and I were about to watch an NBA game. I pay for Youtube TV with all the requisite sports packages and my friend had Sling with the corresponding sports packages. We tried both services only to realize that the game was "blacked out" in our area.
So we seeked out a pirate stream and watched the game that way. It's not that we don't want to pay for the service, no we are both more than happy to pay for it, there was simply no way to watch the game outside of a pirate stream.
I get that there are contracts in place that require blackouts and probably other agreements in place that prevent X game from being streamed at Y location. But as a consumer who just wants to watch an NBA game, I really don't give a s**t.
If anything, I’d expect the opposite: If your tax money didn’t directly subsidize one of the teams, then you pay extra.
(Personally, I try my best to just ignore that corner of the industry as much as possible.)
When I was a teenager in the late 00’s, I could totally rent “Fear and Loathing in Las Vegas” from Blockbuster, but I didn’t have any money. Once I got a job and had money, I started paying for streaming services because they were more convenient, and I’ll likely keep doing so.
But my friends outside of tech who make less money are pissed off about the unbundling and rising prices of streaming services, and I won’t be surprised if some of them switch from paying multiple expensive streaming services to paying for one of the VPNs that advertise on every YouTube video everywhere.
Piracy exists because people inherently want to pay as little as possible, it's why people by knock off LV handbags and why people buy cheap TVs from the supermarket which have terrible picture quality.
The other psychological thing is FOMO, or the idea that you have to watch these things, so if you can't justify the expense then you might as well pirate. Ultimately people don't need to watch those shows, but they want to and they just don't want to pay what's being asked.
The frustration is that people think that the streaming services are scalping, when the reality is that streaming is not very profitable. It's hella expensive to get CDNs to deliver video in good quality and it's hella expensive to encode video at good quality.
You used to be able to use a VPN to create a streaming account in the US, but now everyone has cracked down on that, so they are actually making less money from us.
I feel like studios are shooting themselves in the foot with this kind of stuff.
Go on amazon prime and see what you get for your monthly flat fee. Half the movies you actually want to watch cost extra. Netflix is showing ads now. You have to pay for half a dozen services to get access to all the content you want. Content disappears all the time.
Here's the fundamental problem: people want to stream movies and shows on the internet. But the providers want video on demand cable TV channels. So that's what they're building. From a technical perspective they're the same. From a user experience perspective these are completely different things. From a business perspective, it seems, only the latter is viable. And so they push, and slowly a new reality is born, one where Redbox and Hallmark Channel have a better user experience than streaming services.
The free alternative is I search torrents-csv for a movie, click it and start watching. And if I want I never lose access, just like if I had a DVD. I don't watch all that much TV or movies these days, but I can clearly see what the problems are here, and the entrenched industry leaders either are too detached to see it, or they're trying to pretend it's something else because they don't have a viable business model.
Why does my phone plan need to suddenly include streaming services? Why does a retailer's loyalty service need to include a streaming service?
I'm so fatigued by the amount of subscription services and platforms out there and I'm just absolutely bewildered at how normal consumers... accept this.
Normal consumers who are not obsessed with things behind the scene took the glorious streaming future at its face value.
Then streaming services want to increase their reach, so their sales teams will do a deal with as many partners as possible to tap more audiences.
I can pirate a movie/tv show and Plex will automatically grab practically any subtitle language I need.
If I pay for the same content using a stream service its a mixed bag but usually english, chinese and some mix of euro languages.
Yo-ho. Yo-ho. No streaming fees for me.
The price hikes from both and unacceptable and I don't need to keep paying those prices. Even if they crack down on piracy, which is impossible, I'll still find a better way than paying $20/month for Netflix that I almost never watch.
If you follow the torrentfreak blog you can see that anti-piracy forces really do make big moves. They are capable of passing laws internationally, international enforcement, dictating the technology in our devices.
So far things have worked out in favor of Pirates, but every year another piece of the cage is created, from device attestation, secure enclaves for decryption keys, infiltrating and busting piracy groups, shutting down the latest applications that people use, etc.
That's the thing, in the past I I'd go months without watching anything on Netflix yet still pay them for it, so they were essentially getting a free $8 a month (or whatever) off me during that time.
Now the prices have gone up so much it doesn't make sense to keep subscribed for something I'm barely using, just so I can easily watch a single show that interests me once every three months or so.
The only streaming service that has makes some sense for me to pay for right now is Youtube's, since that's my goto for videos anyway, and it's nice not to have ads for those.
Additionally they also have a bunch of great older movies free to watch movies on Youtube, probably a better selection (of movies I care about) than Netflix right now (saw/rewatched Train to Busan, Little Shop of Horrors, Ghostbusters, It's a Mad, Mad, Mad, Mad World, Tropic Thunder, Fifth Element, Big Trouble in Little China, Dr. Strangelove, 12 Angry Men, Pee-wee's Big Adventure, The Truman Show, Air Force One, Dirty Work, and Dracula: Dead and Loving It recently).
I think greed is what kills good programming. Quality cost money, but there never seems to be enough money, and if the program is successful, then the people want more money to keep making it. Studios pushback, people, leave the project, and many of them eventually fail or slowly die.
Maybe it's an ego problem..
This is a minor complaint, but somehow when it registers I notice all the other contradictions and poor writing, suspension of disbelief collapses and I can no longer pay attention.
Sharing this because I wonder if it's a personal quirk or if other people notice this?
Also it makes me desperate to read an interview from someone who works in the costume department for their content factory. What is the process, and why is it so different than other productions?
Thanks a lot!
Where Netflix pays off for me is their purchases of the rights to foreign shows and films.
That and the occasional mainstream movie or original makes it a decent deal.
I find the sameness of Disney+ to be worse than Netflix, personally. But they have they are anchored by their big movies and Star Wars -- beyond that there is no depth at all.
Www.ViaPlay.com
I feel we are now on abusing users part of "How platforms die".
The Netflix model worked when it was the only one with all the content; but now each studio wants to repeat the Netflix model and pulled their IP to self host it. It was pure greed, naivety and incompetent foresight on the part of the studio.
It does seem like they are pushing out a commercial or two every 3-5 minutes, but I haven't ponied up for Premium, yet...
This is following the exact trajectory that early cable TV did. No ads at first, relatively cheap. Then they figured out we can ratchet up the price, then they figured out not only can we charge to the full extent that the market will bear, we can put ads on it too--just like cable TV did
Growth of subscribers isn't going to get people buying Disney or Warner stock. These aren't all tech companies, and they have to have some way to make money. The idea the ecosystem would generate tons more content on less revenue was always a silly one
A wise man once said, "I'm gonna ride this horse till I can't no more"
Of course content costs as much to make as it does and needs to profit a certain amount. There was never any inefficiency that was going to go away and long term pass on benefits to customers. Now we have the extra inefficiency of every media company building out its own infrastructure.
Although, the cable company is there taking a cut in the form of a broadband bill
I've been looking for a way to pause my accounts, but after looking specifically at Netflix, there's no way to do that. Maybe the empty account is the way to go??
People pay Apple the 30% because they have no other choice. Anything else said as an "reason" is just starting the spin cycle.
The artists and staff who worked on the content want to be paid fairly.
It's great that consumers want cheap stuff, but we can't have it both ways.
If we go down this route, either the content will be crap (and AI-generated), or people won't be paid fairly.
From the article
Then, they deleted a bunch of first-party content to get a dubious tax deduction.
Finally, they doubled prices.
I refuse to do do all that so guess what….
Last i checked many of them in US are on strike because they're not being paid fairly and it has nothing to do with piracy.
They aren't having their pay doubled by this. Some executives are getting a bonus.
https://en.wikipedia.org/wiki/2023_Writers_Guild_of_America_...
One of their main issues was residuals from streaming.
Executives deserve to have pay slashed and massive executive position layoffs before consumers, artists, or production staff feel any inconvenience. That will never happen, so it's on us consumers to overpay to keep artists fed.
So I'm pretty sure the streaming services are charging whatever they can get away with, aka the market equilibrium price, regardless of their executives' salaries.
As a customer, I might be okay with paying more if there was a transparent effort to cut expenses and a renewed focus on their core business.