Intro for May 9, 2024

Dear Gossips,   

Everything old is new again, as yesterday Disney and Warner Bros. Discovery announced they’re partnering for a new streaming bundle that will combine Disney+, Hulu, and Max. This is in addition to a sports bundle coming from Disney/ESPN, Warner Bros. Discovery, and Fox Corp (the part Disney doesn’t own) which will fill in the gaps for cord cutters who are left without easy access to live sports. It’s been said before, but this is it happening in real time—streaming is just turning into cable. Forget the streaming revolution, it’s the streaming reinventing the wheel.

The problem is, of course, that streaming doesn’t work economically. Some people—it’s me, hi, I’m some people—questioned the economics of streaming for years, doubting anyone was actually making money on their platforms, and then last year’s labor strikes exposed the failure of the streaming economic model for both consumers and the creatives who make the movies and shows that populate these platforms. Streaming only really works for the executives and their huge pay packages, and the top-tier A-list stars who can command tens of millions, if not hundreds of millions, in salary to headline streaming projects.

But for consumers, it doesn’t work, not economically. Far from making entertainment cheaper, the plethora of platforms and ever-rising subscription costs means that subscribing to many services costs you more than your old cable package. Thus, bundling, which is meant to make having multiple subscriptions more attractive. We’ll see how that works out once these bundles start launching later this year.

Then there are the ads creeping ever further into our once ad-free streaming landscape. Prime Video is already charging an extra $3 per month to keep your subscription ad-free, and now they’re introducing in-video ad “carousels” meant to increase shopping while people watch Fallout. I have gotten SUPER stubborn about shopping on Amazon since they put ads in Prime, and this is not going to change my mind. If anything, I’ll just watch Prime even less, and reduce my shopping online, too, which I’m sure the folks at Amazon love to hear.

The bad news, though, is that this is all unavoidable. Streaming as a technology isn’t going anywhere. As imperfect and constantly worsening as the experience is, audiences love on demand accessibility and at this point, no one is giving it up. Further, even as ad tiers expand across streaming, people are not returning to linear TV—it continues to wither as streaming, even with ads and rising prices, continues to grow. There is no putting this genie back in the bottle, not that anyone actually wants to.

Which means, yes, there will be more ads, and prices will keep getting higher. I have said for years I do not see how Netflix avoids a future in which their monthly subscription is $50-60. It costs a lot of money to put out as much stuff as they do, and at the quality that they (mostly) do. Yes, they can reduce their production costs by making less stuff, but streaming is a volume game. Having a lot of entertainment options on tap is what makes the price seem worth it, so there’s only so much they can cut their productions. 

Cable channels were never trying to be everything to everyone. They were always a niche conceit, each channel appealing to a different, specific audience. Streamers are the opposite, trying to be your one-stop shop for all things entertainment. So, yes, we’ll keep paying more for an experience that eventually will be worse than cable, a concept we’ve just reinvented. 

Live long and gossip,

Sarah