The Golden Age of Streaming: Is it the end or only the beginning?

The Streaming Wars are about to heat up. NBCUniversal, Apple, HBO, Warner Bros, and the 800 pound gorilla sitting in the corner, Disney, are all about to launch their own streaming services to challenge the industry leader, Netflix. Oh, and Hulu and Amazon Prime are still in the ring, too. And don’t forget that CBS already has its streaming service up and running, and it met its initial subscriber goal two years early. What does this mean for consumers? Well, if The Guardian is to be believed, this means the golden age of streaming is over, because costs are about to flare up. I don’t completely disagree with this. From the article:

Most importantly, we should all remember that this content war is hinged upon a fundamental misunderstanding of viewing habits. Netflix didn’t become a monster because people wanted to watch a specific show; it became a monster because people wanted to watch everything. When its streaming platform launched, people were spending more than £15 just to watch a single season of a show on DVD. So to be able to watch every season of a show – and every season of hundreds of others of shows – for a fiver a month was revolutionary. The whole point of Netflix was that it was a relatively affordable bucket that contained an awful lot of television. That’s why people liked it. That’s why so many people subscribed and continue to subscribe. To pretend otherwise is to miss the point. (link)

The idea that streaming hinges on tons and tons of content is not wrong, though it is not the complete picture. This is called demassification (thank you, Ruggiero, for the term) which is the ability to access a very wide variety of content, not just what is limited to a broadcast release schedule. However, demassification is only one piece — albeit an important piece — of the puzzle. Value is another piece, but not the entire puzzle.

So what makes the difference? To understand that, let’s look at Netflix.

While the appearance of these new streaming services, especially Disney +, has caused many to lament that Netflix is on its way out, I would tend to agree with this article from Polygon that Netflix is going to be just fine. Netflix has been a forward thinking outlet from its outset, and it has managed to weather quite a few storms. Does anyone remember the time it split its DVD service from the streaming service and made everyone mad? Does anyone even remember that it used to have a DVD service? And one thing it has always understood is consumer viewing behavior. That’s why it chose to release its new programming all-at-once instead of one episode per week, creating the term “binge watching.” It knows how people want to watch content, what kind of content they like, and it encourages its producers to create content in a way that best tells the story and will best connect with audiences.

Netflix has succeeded because its a better way to watch television, both in terms of content and technology. And that’s the big, main, all-important piece of the puzzle. My own research supports this. Looking at cord-cutting, it is the perceived advantages of the technology of streaming that predict cable cord-cutting (abandoning cable to rely on streaming for television), more so than streaming’s value.

Netflix will continue to succeed because they understand what the technology can do for consumers. I am not going to be surprised at all when these new streaming channels release their shows week-to-week in a desperate attempt to force consumers back into old models of viewing content. It won’t work. And I don’t care if you have The Office — if you’re not going to innovate, you’re not going to survive. I think the platforms that come up with innovative ways to experience content that meet the on-demand, interactive, in-control expectations of modern audiences will be the ones that will thrive.

While the outset of the Streaming Wars means that yes, things will get expensive if you want to access every piece of content out there, I believe that once the dust settles, there will be a few winners and more than a few losers. We’ll see the losers’ content migrate towards the winners’ channels.

And the winners will be the channels that succeed in doing innovative things that make the viewing experience better.

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