How many streaming services do you have a subscription to, and how much does it cost you? How does that total compare to what you are paying for television services, and how does the total and your general streaming situation compare to what you were looking at only a few years ago?
We want you to consider these questions because the landscape is quickly changing whether you know it or not, perhaps even more so than when the first few waves of streaming services came onto the market. Furthermore, the recent pandemic has only accelerated matters in some ways, with more people having to stay home and likely watching more TV to pass the time and get some entertainment (given that there was not much else to do).
While it might slow down as people get out more, many people have discovered streaming services and will not be going back. Many people have also changed their moviegoing from theater-based to home theater-based due to the pandemic, realizing that there is a lot to be said about enjoying the latest release at home instead of dealing with the crowds and concession prices of a movie theater. Combine that with the rise of prestige TV and people and changing the way they think about entertainment, cable, movies, and more.
Yet while people are changing their perspective, so are companies. They know people will only be willing to spend so much on streaming services, and they want maximum value. Therefore, more services are coming together by one means or another and larger services are trying to expand their offerings.
We find all these developments worth following and want you to have at least a general overview of them. Therefore, here are some of the key topics and trends to follow in regard to the current and future streaming market:
In the past few years, practically every cable channel, broadcast TV channel, media curator, and major tech company was trying to get in on the streaming market in one way or another, seeing both the profits of Netflix as well as the opportunity to distribute their own content as opposed to licensing it out, getting more back for their investment and building their own brand.
In short, many companies tried to get into streaming, and many companies or offerings for the most part failed, at least by their own hopes and standards. It takes a lot of momentum to create a successful streaming services, and these are long-term investments that have a lot of overhead to provide good content, at least if the goal is to provide content beyond which the company is already producing for television (in many cases a streaming service is just all of a channel or network’s content available for streaming, keeping costs low).
In some cases these options faded into irrelevance and receive little support to this day, and in other cases they were absorbed into larger services and companies. After all, there is still value in any original content produced (if this occurred) and there was a lot of said content.
And of course, there is also the issue of licensing agreements ending, allowing content to return to a more “natural” platform closer to the owner. For example, many Marvel Cinematic Universe entries are now going to Disney Plus after a certain amount of time on Netflix. It is quite likely companies will value their streaming rights and exclusivity even more than before, whether to compete better or place themselves in a better bargaining position for acquisition.
Alternatively, rather than just failing in the market, sometimes the more “creative” approaches are not viewed favorably by other companies and people. VidAngel, for example, tried to create a family-friendly streaming service by ripping DVDs and streaming editing versions, which didn’t go so well legally. They are still around, but are not at the top of the heap by any means. A few other services created followed a similar approach, but none have survived or caught on over the last decade.
Even with consolidation going on, if you search online, you will find a nearly endless array of streaming services and platforms that are lesser-known and cater to a niche audience. The selection of content might not be as new or as broad as what one might find on Netflix, Hulu, Prime Video, and the like, but it is content certain audiences can’t get anywhere else. Whether you are into tabletop gaming, classic movies, or endless cooking content, there is a streaming service or a website with a premium content subscription for you.
If you can find it. Most of these outfits will not have the budget or name-recognition needed to really break into the mainstream, or the audience is limited by the niche. No matter how much people know about a service known for having old Westerns available, there is a limited audience for that. For the most part, existing customers or followers will be the only ones who know about the service to begin with, and word of mouth can only go so far.
While some niche services will be able to get by and are scaled to their niche audience, we can expect that others will be scooped up by larger services or networks, or merge together, to better compete.
Another slight limitation we would like to mention here is that people often want options for watching. If there isn’t a phone or tablet app for some bedtime or waiting room watch time, people are going to be less likely to use the service regularly. Further still, people want to be able to watch content on their TV, which is effectively the intended screen. If people can only use a streaming service on their browser, that is a major limitation, but not every network or streaming service gets an app together. This slows growth and might make people hesitant to subscribe.
Related to this, the quality of the video player and server matters as well. Server issues can drive customers away and some players are better than others. As much as some people might not want to admit it, user experience is incredibly important, both within the player and on the website or app, whatever is applicable. Maintaining top quality requires a lot of technical talent and investment, which not every emerging streaming service might have access to or prioritize right off the bat. Every small thing can be important, and all of this leads to a world where there are a few leaders and everything else.
Even before the streaming wars began in full effect, it would be easy to say we were living in a golden age of programming and content. There were more prestige and high-quality shows than any single person could watch in their entirety, and something being well-reviewed is effectively a requirement for it to get a lot of attention (outside of a huge marketing budget or a very good time spot).
Therefore, in order for streaming services or channels to really break through, they needed hits and they needed shows that would wow people. That could mean producing or funding their own content from scratch or securing the exclusive streaming rights to an already popular show (lots of people watched “The Office” on Netflix, and kept their subscription for it).
If you take a look at the last season of Game of Thrones, for example, you will find that the budget per episode is millions of dollars, which is quite a bit even for HBO. There are shows in development that compete with or even eclipse that, trying to become the new must-stream TV that everyone will want a subscription for. Ideally, that combined with a wide variety of other content will keep people subscribing and entertained.
Whether all of this will mean that we have a few high-budget shows to focus on each year or a show for every genre and interest remains to be seen, but streaming services are going to have to try harder for the foreseeable future or go to the bottom of everyone’s list (and no one reaches that point with so much content out there). It is not just about money and value anymore, it’s about grabbing attention and getting people’s limited time. This, in turn, might lead to a limited number of things to actually watch, due to more focused investments.
As partially mentioned before, the number of streaming services has become more than most people can simply keep track of, much less afford. And if streaming services do not have much content to offer or enough to keep someone entertained from month to month, they certainly will not keep a customer around all the time. Many customers intelligently switch from service to service as they find shows they want to watch, which is great for the customers but not so great for the streaming services.
In some cases, a company or related companies will have multiple streaming services, and over time those services might not be popular or a few channels might be a bit too niche on their own. Yet to attract more viewers and command more attention (and perhaps command a higher monthly subscription price down the line), many companies might combine or consolidate their streaming services. A perfect example of this is the recent creation of Paramount Plus from CBS All Access and a few other services and offerings, or Disney Plus also offering National Geographic content. By providing something for everyone, everyone will subscribe (or at least that is the hope).
And while this sounds great and does have its benefits, some streaming services will likely act larger in addition to being larger. Effectively, some streaming services may see fit to charge more for providing more content, even if audiences are not interested in all the content. There is not much difference between this and traditional cable subscriptions if you think about it, and there is a possibility that the lines will blur more between the two and streaming services will be easier to change out of, but not all that less expensive.
While much of the detailed financial information might not be available to us, it is wise to consider what the business goals and business model of streaming services are. They are, after all, businesses, and their end goal is to make money for the owners or (more likely) shareholders. Yet there are several ways to go about this and several ways a company can look at a streaming service.
Effectively, the goal of any streaming service should be to get more subscribers. While content can be expensive to make, serving more customers takes little to no more investment, as streaming companies offer an infinitely (or near-infinitely) replicable service. It doesn’t matter whether one person or one hundred million people watch the latest season of your favorite show, it will still cost the same to make and distribute.
Big business and larger organizations with greater reach and marketing potential, therefore, have an innate advantage, and spending a ton of money to get a strong subscriber base might be the only option to gain a foothold, unless there are shows or content that becomes absolutely essential to watch and cannot be found anywhere else. And even then, a service needs a way to keep customers engaged beyond a single show or two. There are also app development costs for a wide variety of devices, the infrastructure and servers needed to make sure the user experience is perfect, and keeping track of what people want and are watching.
In a few cases, streaming services or content on-demand is a part of a larger subscription, and meant to keep people engaged with the platform or subscribed to that larger service. Amazon Prime Video comes complimentary (though premium channels are separate subscriptions) with Amazon Prime in general, which is the real sell there. Video Streaming as part of a larger ecosystem might be something other companies adopt in the future, especially the huge companies willing to try out an investment in anything.
There might be ad-supported models or partially ad-supported models for streaming services, but based on history they have not been the most successful or profitable. While Hulu offers both ad-free and ad-supported subscriptions for customers, they also got rid of their completely free service some time ago. Ad revenue often simply isn’t enough to support a company providing premium content, and things such as YouTube are a completely different beast entirely, deserving of their own articles and analysis.
Other services or sites might be free, but they often have another motive, only offering a few episodes to later sell a subscription to another service or outright selling the rest of a television season. It’s less of a subscription service and more of an extended preview for potential buyers or viewers on television.
And of course, another business model or two might appear in the coming years. As long as businesses are looking for ways to make money, there will be creative solutions (both successful and unsuccessful).
Yet as streaming services consolidate and condense and giants emerge, we will still nonetheless see new competitors try to find their niche or try a new business model. Venture capital will always be looking for the next great streaming idea, and large tech companies or any company that stands to make a potential profit will give their service a try next if they see an opening in the market, either filling a niche seemingly unfulfilled or a weakness in a longstanding company.
It is also wise to remember that the market is not completely saturated yet, as more people get better internet connections suited for regular video streaming as well as overseas markets open with better internet connections and available screens as well. Just because a service is not United States-centric does not mean it cannot be successful.
And finally, there will be new technologies and options opening up over time. Will there be a streaming service that offers cutting-edge VR content? Will there be a service that offers not only video but game streaming in one package? What about shows and tie-materials to match? Shows that have multiple options and endings, much like Netflix’s Black Mirror: Bandersnatch? Most experiments will seem like gimmicks, but all it takes is one success.
How these streaming services will wind up depends on all the usual factors and how well they can find their audience, if there is one. Furthermore, it can often take years for streaming services to build up, which requires a huge investment and a lot of patience from shareholders and executives.
As people sign up for more streaming services and use those more often, many of those people will find that they no longer need or use cable and cut the cord. This leads to cable seeming like it is diminishing, a relic of the past to be left behind. Yet we are not certain this will be the case at all, and in fact are confident cable will stick around, though it is certain that cable will need to adapt and catch up in the coming years in order to keep up with some consolidated streaming services and now-established giants in the industry.
Cable does have a few things going for it still, as they are still able to provide the most content for your dollar, though on their time. However, with DVR services and a bit of planning, on-demand content is available with cable for a reasonable price considering what you are getting.
Furthermore, cable and standard television is still by far the best option for anyone interested in sports programming or packages, and there are some events that are still best watched on TV. Cable news is a driving force, and many people watch regular programs that are not so easily found on streaming services which instead focus on premium content and limited series. There are relatively few alternatives on streaming services for this, and streaming is still mostly focused on more limited shows and a specific type of programming. The formats are fundamentally different when held up to close comparison.
Yet that does not mean cable companies should rest on their laurels, lest they go the path of Blockbuster. For standard cable to succeed and stay relevant, we think it will need to do the following:
Of course, not everything is so simple. Cable companies have dozens if not hundreds of negotiations to handle every year, and they have limited resources like every other company. They also need to make sure that they are staying competitive with other cable companies, often deal with shareholder concerns, and maintain a strong product for customers. We can only hope that they will put their best foot forward and plan for customers and their own sakes.
While we cannot be entirely sure where the winds will blow in regards to the consolidation of streaming services and entertainment options, there are some recent news stories that can shed light on the issue:
We are generally not privy to the dealings going on behind closed doors, but it is clear that media companies and major streaming services are in a de facto arms race to keep people’s attention and subscriptions. There is a trend towards larger services and making sure people are always focused on one service, but customers will do as they will and will likely always have a few subscriptions active at any one time.
Similarly, how cable companies will react will mean a lot in the years ahead, and despite rumors to the contrary, cable is not dying overnight or even dying at all. There is adaptation to occur, for sure, but there always has been, and all we can do is see what happens.