I think there's a significant difference between content packaged as "channels" and content packaged as individual shows. It's the difference between knowing that your Netflix subscription comes with* 10,000 different shows, and you will probably only ever care about 1000 or so, and knowing that your cable subscription comes with 250 channels, and you will probably only ever care about 20, and definitely never care about 100 of them.
It's also the difference between the, what, $20/month? that Netflix subscription costs and the $80/month or whatever that the TV portion of a cable subscription costs nowadays.
* No actual numbers were harmed in the making of this post. All numbers presented are purely imaginary.
>It's also the difference between the, what, $20/month? that Netflix subscription costs and the $80/month or whatever that the TV portion of a cable subscription costs nowadays.
Those numbers seem pretty close. I think the cost bit is probably the big thing. Yes, it's a bit annoying when I spend 10 minutes trying to find a show on Amazon which is, in fact, on Netflix.
But the main thing is that a lot of people have cut their $80-$100/month cable cord and their new normal is maybe a couple of [possibly shared] subscriptions plus maybe Prime--not their prior $100 monthly content bill.
Netflix showed how much content you could get for a cheap cost relative to cable. Now everyone company wants to charge the same for their meager library.
Netflix pricing was always temporary. Content owners werent ready to destroy their old business models, they temporarily
rented licensing rights to Netflix while they figured out how they were going to handle shifts in consumption.
It's almost the same thing as Uber prices being VC subsidized. And now Disney is following the same playbook, sell Disney+ at or below cost for a while until they can inflate MAU enough that people just accept the subscription as a cost of life.
Theres also a bit of Rose Colored glasses going on here, Netflix catalog was pretty bad in the beginning, and people are misremembering it as better than it was. Netflix only exists at all because they could get their DVD business off the ground without paying per view licensing fees.
>charge the same for their meager library
We are also talking about a generation who is saying "I wont pay $7-$15 four times, thats too expensive" but while growing up, who's parents were paying $150/m to Comcast or DirecTV.
>>We are also talking about a generation who is saying "I wont pay $7-$15 four times, thats too expensive" but while growing up, who's parents were paying $150/m to Comcast or DirecTV.
Yea I'm part of the group of millenials killing everything. Here's my honest to god thoughts: I don't care if piracy is killing the industry, or if these people aren't able to keep operating. Let the whole thing burn to the ground. We'll figure it out. It would be painful (the jobs! The lives disrupted! The profits!!!) and I'm aware of that. I just don't care.
The industry has opened Pandora's box. And I'm not going to feel bad when Disney or Verizon or whatever megacorp the other 5% of the industry those two don't has their business disrupted. The entertainment industry has gotten gross and stagnant and continues to progress towards a monopoly.
This current era is going to shift, and likely very fast. There's too many services, and piracy is still an easy option. You can slow roll price increases, but only so far and only if there's a very small (2-5?) number of services people feel they're getting value from.
No comment on responsibility or culpability. But, "I want everything for $9 that used to cost $99" is an unreasonable expectation. People paying for cable and satellite are paying way more than the cost of even 5 of these unbundled services. And pay for tv still has commercials. These direct from content producer unbundled apps are still significantly cheaper than the old world. People's expectation of what content should cost seems to be shaped by "I want everything cable does but for the price of netflix." Thats not a delivery volume or price point that ever existed, anywhere.
“I want everything for $9 that used to cost $99” is perfectly reasonable in markets where technology has dramatically lowered costs. It’s certainly what I expect when buying computer hardware, but it should also apply to the market for distributing films that have already been made. If the service you want is the ability to watch one movie a week from a huge catalogue, streaming technology has brought the cost of delivering the service way down, but the cost to the consumer has gone up compared to DVD rental!
Is it really? The amount of people willing (and able) to pay today 10-20 is likely ten times the people who paid 100-200 in previous generation. You see the same in gaming and film, where you have many many more consumers today than you had 30 years ago, and still they complain about “piracy is killing industry”, while their profits are through the roof.
It's also worth mentioning that these services are very big outside the US. Premium (cable) TV was never such a big thing in other countries, and those where it was somewhat popular never charged as much as the US.
Again: I get it's not the best look. I strongly support artists rights and the need for creatives to make money off their labor. However, the system sucks, and doesn't actually benefit the creatives anyway. Maybe creative/artist jobs shouldn't be "jobs" anymore, and people MBI or something needs to step in. Maybe the public need to subsidize the arts through state sponsored programs.
IDK what the answer is. But I know it isn't "more streaming services with no ability to share passwords".
I see (heh) the rose-colored glasses with Netflix a lot. Their streaming catalog for licensed content, especially movies, was always pretty sucky. People may remember specific things they used to have that they don't now, but it was always hard to find specific shows and, especially, films if you went searching for them.
I remember mentioning this to a senior Netflix tech guy at the time and his response was basically that people come for the movies and stay for the TV. (This was a bit before the real explosion in premium TV content.)
> Content owners werent ready to destroy their old business models, they temporarily rented licensing rights to Netflix while they figured out how they were going to handle shifts in consumption.
No, they saw a new revenue stream, and jumped on it. Then they saw where things were heading, and they would have less control if Netflix took over, so they all pulled back and started up their own streaming services.
Disney has admitted that they will lose money at their current price level. Which implies strongly that they'll be increasing prices substantially in the future.
They admitted they will lose money for the first few years, not forever. Like almost every single product. Do you think the iPhone or Xbox made a profit in the first few years, when you count the money spent on research and factories?
Disney has lots of ways to monetize. A slight increase in the odds your family books a Disney Cruise is a significant real monetization channel that doesn't show up in subscription pricing. Matthew Ball has a good analysis of these models[0].
Disney is currently making bank by licensing their catalogue to various streaming/cable services. This stream of revenue will dry up as they take back their IP. It might take them a long time to have enough users on Disney+ to cover the lost licensing revenue.
Netflix has ~150M paying subscriptions. Let's say that $0.20 of your Netflix subscription go to Disney (you can adjust it to whatever you think it might be). That's 30M a month. At $10/m, Disney+ would need 3 million users just to break even with what they used to make from Netflix.
How many active users (or what price point) will Disney need to justify the investment?
I'm not sure I buy that. It depends on both the cable TV/satellite bundle and bundles with cable TV and other services like Internet, but $100/month is probably a pretty reasonable ballpark for the cost of a traditional channel bundle. It's pretty easy to undercut that with streaming subscriptions including something like YouTube TV.
