We’ve often thought of streaming services as our salvation from cable, but the world of streaming is starting to adopt some distinct cable television characteristics. How far will it go?
Why Streaming Services Are Awesome
Streaming services have been successful because they do things differently. They’re known for being cheap, convenient, ad-free, and contract-free. They’ve also changed the way that we consume media, and they’ve offered us a reliable alternative to cable companies.
Early streaming services, like Netflix, Hulu, and Amazon, entered the streaming market with aggressive strategies that benefited consumers. They signed as many deals as they could with TV networks, and built massive libraries of hit movies and TV shows. There’s a good chance that you signed up for Netflix years ago specifically for Breaking Bad, The Walking Dead, or the library of Disney movies that they offered.
Streaming services also gave us a new way to watch serialized TV shows. Instead of rushing home to catch a new episode of Bones every week, you could wait for it to come out on a streaming service and binge-watch it over a weekend, ad-free. Plus, a lot of these streaming services implemented learning algorithms that encouraged you to watch shows you might have missed. Netflix’s algorithms are particularly detailed, to the point that the website will show different thumbnail artwork to different users based on their preferences and the shows they’ve watched before.
But it turns out that the greatest strength can also be a weakness. Cord cutting only sucks if you’re trying to replicate cable—unfortunately, streaming services themselves are now trying to copy cable.
The Streaming Services We Love Aren’t Sustainable
Years ago, it seemed like everything was on Netflix. The service didn’t have to compete with many streaming competitors, so it managed to sign some killer deals with networks like Starz, Disney, and AMC. These deals brought in thousands of shows and movies that people were familiar with and ready to watch, like Breaking Bad, The Walking Dead, NCIS, CSI, and Hannah Montana. These popular, contemporary shows brought a lot of subscribers to Netflix. And it wasn’t hard to keep people subscribed to Netflix, because it had such a massive library of shows and movies.
But that started to change very quickly. Competitors like Hulu and Amazon Prime began to outbid Netflix for big-name shows and movies. Services like HBO GO and Showtime cut out the middleman by building their own streaming services. And some of the networks that signed deals with Netflix early on felt that they were ripped off and tried to find better deals once their contract with Netflix ran out.
Let’s put things into perspective. In 2008 Netflix signed a 20 million dollar contract with Starz and gained 2,500 shows and movies from the deal, including hit titles like Ratatouille and Spiderman 3. But just last month, Netflix had to cough up $100 million for a single TV show, Friends. They can’t afford to bring in as many hits shows and movies as they used to, which gives subscribers less of a reason to stick around.
The binge-watching format is also unsustainable. If you sign up for Netflix to watch Stranger Things, you’ll probably finish watching it in a week or two. If Netflix doesn’t have any shows that make you want to stick around, then you can cancel the service when you’re done with Stranger Things. And if you managed to do all of this in your “first free month,” then Netflix doesn’t get a penny.
Hit shows bring people into streaming services, but they don’t necessarily keep people around. In the past, a hit show that airs week-by-week on a TV channel gave people a reason to renew their subscription every year and would provide networks with a steady stream of revenue. But streaming services can’t expect that from their shows.
Streaming Services Are Becoming TV Channels
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