We are living in a golden age of TV thanks to the streaming revolution. Showrunners and directors have been given more creative freedom and there has been a constant flow of new shows. Yet the rise of streaming has been so fast that it leads to the fears that we are on the edge of streaming service crunch.
As a disclaimer, I live in the UK, so this article will be written from an Anglo-American perspective.
When streaming services first rose in the mid-noughties things were simple. Services like the iPlayer and 4od allowed audiences to catch-up on shows whilst LoveFilm and Netflix expanded from being DVD mailing services to streaming films and shows online. Netflix became popular in the United States and led to shows like Breaking Bad gaining a wider audience.
The real gamer changer came in the early 2010s when Netflix announced they would make their own original programming. Their first effort, a remake of House of Cards, showed their ambition by getting pre-disgraced Kevin Spacey and Robin Wright to star and David Fincher directed the first three episodes. It was a critical success and Netflix was able to change how TV shows were released. It cemented the binge-watching culture we have now. Amazon quickly followed and made their own successful shows like The Man in the High Castle and gained the international rights for shows like Vikings, Black Sails, and Outlander.
In the UK and the US, there seemed to be a streaming service equilibrium. In the States there were three major services: Netflix, Amazon Prime, and Hulu. In the UK, audiences had the options of Netflix, Amazon Prime, and all the catch-up services. Customers of Sky, Now TV and certain Virgin Media packages have access to Sky Cinema and many TV series are available to stream. But the rule in the entertainment industry is if something’s successful then copycats will follow.
Because of Netflix’s success, several other companies have started their own streaming services or planning to launch them. Famously Disney, HBO, and Apple have launched their services. There are also many smaller services that specialise in certain genres, e.g. anime and world cinema/TV.
There is an obvious appeal for studios and other media companies to set up a streaming service: they can provide a constant revenue stream. If a service can gain a large number of subscribers then they can be a money-maker. But the issue with the current market is oversaturation. This oversaturation has led to numerous memes that compares the cost of streaming to cable packages and see viewers turn back to privacy. And these memes do speak the truth.
In America there are numerous streaming services like Netflix, Amazon Prime, HBO Max, Disney+, Apple, and CBS All-Access. If you add them all together it would cost $56 a month, at least. The prices go up if you all things like to stream in 4K or without ads. And those costs increase even further if you include premium cable channels or smaller/niche services like The Criterion Channel, Shudder, and Acron. In the UK Amazon Prime offers add-ons like StarzPlay, Acorn TV, Arrow TV, and Funimation, and like with America, if you got all these add-ons the cost builds.
The fracted nature of streaming services has the unintended consequence: a rise in piracy. When there was only Netflix, Amazon, and Hulu there seemed to be a comfortable balance with a good amount of content available. However, as more companies make their own streaming services, they have pulled their own content from their rivals. Since most people have a limited amount of disposable income and there are some less scrupulous people who are willing to turn to piracy to watch the shows that are unavailable to them. The Mandalorian was one of the pirated shows of 2019, partly due to Disney+ not launching in major markets like the UK and Germany.
Anyone who watched any Youtuber often gets a sponsorship from a VPN company. One of the ways VPN companies advertise themselves is by saying users can change their location on their computer and by doing that watch Netflix content that is unavailable in your home country.
An obvious comparison that can be made with the streaming market would be with the music industry. The music industry suffered a lot from piracy until iTunes reinvented the market and allowed people to buy music online. The music industry changed again because of Spotify which allowed people to stream music. Amazon and Apple followed suit and made their own music streaming services. The big difference between music and film streaming is the various music services have the same content, it doesn’t matter which one you use. Plus Spotify and Apple are great platforms for indie artists and new artists to release their music.
Another comparison that can be made is with the console war of the 1990s. During the ‘90s many electronics companies made their own consoles: Panasonic had the CDO, Phillips made the CDi, and Atari released the Jaguar. None of these companies were able to break Nintendo or Sega’s dominates. Many failed for various reasons like high price points and a lack of games. Now there are only three companies who make game consoles and no other company is going foolish enough to enter the market. The big difference is consoles are expensive items and most people only have one. Most video games are multi-platform.
There are two other comparisons that can be made with the video game industry. In 1983 there was the Video Game Crash which was caused by market saturation of games which undermined the market. The other is with MMORPGs because that genre of games is dominated by World of Warcraft. No other game has been able to compete, even ones based on popular franchises like DC Comics and Star Wars.
There have already been failures in the streaming market. The most famous service to flop was FilmStruck. FilmStruck marketed itself as a high-end service that specialised in showing world cinema and classic films. It launched in November 2016 and two years later closed down. Quibi is a new service that has launched in April 2020 and it has already been met with criticism. The service was founded Jeffrey Katzenberg, one of the co-founders of Dreamworks and it was able to gain $1 billion in investment. But the service only be showed programmes in 10-minute increment and can only be viewed on mobile devices. In June, the service only had two million users when it was predicted to gain seven million. Katzenberg blamed the failure on the Covid-19 pandemic, ignoring that Netflix and Disney+ gained subscribers during this period.
Even Apple TV+ has struggled in this market. According to researchers Apple TV+ has over 33 million subscribers, but most aren’t paying for the service because many people got a year’s subscription for free when they brought an Apple product. Anecdotal accounts have said that Apple TV+ lacks content. This shows content is king for a streaming service. Netflix and Amazon have been in the game long enough to have built up a lot of original shows and movies, whilst Disney+ and HBO Max have access to huge libraries from their parent companies. But even Disney+ has received criticism for a lack of original content. The Honest Trailer for A Goofy Movie even commented on this.
There has been a gold rush for content. Streaming companies have looked to make their own content, brought the rights to movies, and even had bidding wars for the streaming rights for popular shows like Friends and Seinfeld. When a streaming service gains the rights to something, like Netflix getting the international streaming rights for Studio Ghibli films, it can be big news online.
The current market is great for filmmakers because they can get films or show seen by a wide audience, make lucrative personal deals, and get big budgets for their projects. But, there are risks because it can lead to infection: Amazon’s Lord of the Rings TV series is estimated to have a billion-dollar budget, and Martin Scorsese secured a $200 million budget from Paramount and Apple for his next film which is a period crime-mystery. The risk is there could be a crunch in production as well as streaming services. Another is a lot of rubbish that has been made or brought: anyone who has searched Netflix or Amazon Prime can testify to this.
Recent political events have also exposed another issue with streaming services: their ability to pull content at a whim. Netflix and BBC removed Little Britain because of its questionable content, and Netflix has removed episodes of shows like Peep Show, The Mighty Boosh, Community, and Always Sunny in Philadelphia because of blackface. This was reactionary and the context within these episodes was ignored. When HBO Max removed Gone with the Wind it led to it becoming the most popular film brought on Amazon for a brief period.
It would be foolish to bet against streaming. There are obvious benefits to streaming like low costs, wide libraries, and convenience. Yet, the streaming market is becoming more fractious, and newer services will struggle to breakthrough. The market is becoming unstainable and some services will fold in the years to come. Hollywood has a habit of trying to repeat success. After Avatar was a hit there was a big push for 3D technology but by the middle of the 2010s, 3D was dead in the water. The same thing happened with many companies trying to make their own cinematic universes after Phase One of the Marvel Cinematic Universe. Most of the pretenders have failed.
Even the giant of Netflix has its issues. Netflix has $14.8 billion of debt and for the company to function they need to constantly grow their subscriber base. There is a risk Netflix is going to reach a peak and be unable to grow any further. When that happens Netflix would have to scale back its productions.
The market would have to reinvent itself to sustain the various services. Companies could go to Disney where they bundle Disney+, Hulu, and ESPN in a package in the US, or some companies are going to have to make deals with each other if they want their services to survive. Some consumers have already modified their behaviour and rotate their monthly subscriptions in accordance with the releases of major shows. Or services might for the on-demand model like All4 in the UK which uses advertisements to generate revenue.
