Streaming TV: The future of streaming TV is cable

The cancellation of Netflix's favorite sitcom, beloved cult of criticism One day at a time felt like a weird Rubicon crossed for the era of streaming – even more than Netflix canceling the cult comedy American Vandal or Hulu deciding not to order a second season of his Sean Penn-star The first. (Both events occurred in 2018.)

One day at a time was apparently the kind of show that the streaming revolution was supposed to support. His audience may have been small – not that we have a real way of knowing – but he was deeply loyal to the show. In addition, the majority cast of the Latinx series, as well as its incredibly diverse writers' room, seemed to be a prime example of Netflix's recent attempts to position itself as a home for stories of voices that are rarely the focus of cinema and television.

But none of that mattered in the end. Regardless of the number of viewers, it was too small for Netflix to warrant a fourth season. And in a self-flagellating Twitter thread, the streaming service seemed to suggest that the cancellation of the show was, at some level, the fault of viewers for not having found it – before insisting that Netflix remain committed to telling stories according to the views of Latinx, even as he had just canceled his most prominent show.

One day at a timeDisappearing is just the latest example of a new business reality in the era of streaming: if a streaming service does not own the broadcast TV shows, these broadcasts must be mbadive to justify the cost of the licenses. One day at a time was produced by Sony Pictures Television, not Netflix. Sony later hopes to sell the series elsewhere, which led to the very backward scenario of One day at a time fans love famous person Lin-Manuel Miranda hoping broadcast network to receive a broadcast canceled by Netflix. Upside down!

But this is only a sign of the times. The streaming revolution, which promised to remove many barriers in the television industry, was starting to turn into something else. And what it is changing is much more like … traditional TV.

Netflix blockbuster deal to keep friends around a year shows the direction that the streaming takes

Dimitrios Kambouris / Getty Images for Turner

It can be said that the most important thing that happened during the Television Critics Association winter press tour in 2019 was almost happening.

He came to a press conference held by Kevin Reilly, president of TBS and TNT and creative director of Turner Entertainment and WarnerMedia Direct-to-Consumer, which is responsible for WarnerMedia's new streaming service, which will include content from Turner, Warner Bros. and HBO.

Reilly was specifically asked about friends, who recently made the headlines for almost leaving Netflix. The streaming giant has finally signed a mbadive contract, spending $ 100 million to maintain the clbadic sitcom of the '90s in its catalog another year. But the agreement was non-exclusive, which means that WarnerMedia can buy friends If you wish, or rather, place it on the future streaming service of WarnerMedia.

So we asked Reilly: friends continue to stream on Netflix in a world where WarnerMedia has its own streaming service? At least hypothetically?

Reilly has left some room for maneuver – since he will not finally make the final appeal regarding the fate of friends on Netflix – but not much.

"I think you can expect Warner's jewels to end up on the new service," he said. "And I think that overall, sharing destination badets in this way is not a good model for sharing them. My belief is that they should be exclusive to the service. "

So, yes, it is possible that friends will continue to stream on Netflix. But if you bet on it, the chances will be strongly against you. From here a year or two, friends and other properties on demand as Game of thrones, Wonder Woman, and even many shows on The CW will likely be exclusive to a streaming service owned by the same company that owns the programs themselves. And there is not much that independent players like Netflix can do about it.

To understand this level of business integration – and the direction taken by the TV for almost 30 years – we must go back in time to explore the invention of the cable.

Cable bundles, explained

Sean Pavone / Shutterstock

The cable is a creation of the 70s and 80s that still exists today because it remains at the heart of how everyone in Hollywood earns money.

At the beginning of the cable, there were a lot of channels, and many of them charged a subscription fee to the card. If you want HBO, Disney Channel or ESPN, you can simply pay a subscription directly to your cable or satellite provider, who will transmit it to the network in question.

But as the number of networks and channels has increased, providers have realized that they can consolidate a large number of channels, charge customers a single fee, and then pay each network what is known as a "fee." of distribution". Distribution fees are paid monthly, per subscriber case), and they generally amount to a few cents per channel – although for some giants, ESPN in particular, they can go up to more than $ 1. That does not sound like much, but if a major cable company pays FX 5 cents for every subscriber to its main package, FX will have everything to gain a ton of money. Shipping costs are an important part of why networks are looking to add to business core packages. That's where the money is.

But this system also allows the proliferation of niche channels. No matter how many people look at Food Network if each of them are Food Network's tough guys who would scream if they could not watch Guy Fieri eat greasy spoons across the country. (No judgment!) And as more and more chains earn, suppliers add more channels at different subscription levels, resulting in ever-increasing costs.

This does not help the majority of cable operators have a monopoly in their service areas. Yes, there are occasional competitors (especially satellite broadcast service providers such as Dish Network and DirecTV, before this becomes part of the AT & T empire). But overall, if you live in my current neighborhood, you're locked in the AT & T verse, and if you live in my old neighborhood, you're locked in Time Warner Cable. (Unfortunately, both companies share a parent company – AT & T.)

Yet whenever a competitor is positioning himself, it is difficult so that this competitor can actually undermine established cable companies, simply because at some point they have to pay the networks the distribution costs they were used to. The only way to really reducing subscription fees means reducing the total number of channels available. (This is the principle that "skinny bundles" like SlingTV work, they offer you a lot less channels at a much lower cost, and most of the time over the Internet.)

The answer to the ever-growing cost of cable bundles is usually the following: "Well, why not just offer individual channels to the card?" If you look at Food Network and only If you want to save an extra $ 80 a month, you may pay even $ 20 a month for a lot of channels you do not watch. This approach has met with some success in other countries (although Canada has seen many bills increase). The age of streaming has reduced some of the overhead costs badociated with channel supply in this way (such as having to own or rent a decoder), so that the card gradually gained popularity with additional channels that can be purchased via Amazon, YouTube and others.

And, of course, Netflix, which built itself at the top of this whole mold system, was then presented as an alternative to the ground below. Netflix would not exist if it was unable to buy cheap content from the networks it was trying to impersonate, and it was available via the Internet, which is still provided by Internet companies. cable television and satellite television in the majority of American homes.

But the success of Netflix has made everyone in Hollywood realize how much money there was in streaming, how much they had already given to Netflix and how much they would like to win. Enter the new wiring harness.

Forget Netflix. Let's talk about Disney and Hulu.

Monica Schipper / Getty Images for Hulu

In a few weeks, Disney will own 60% of Hulu's capital. (The remaining 40% is held by NBCUniversal and Warner Bros. in a 30/10 division). Until now, it is not clear if Disney will try to buy this 40%.)

At the same time, Disney announces the launch of its next Disney + streaming service, which is scheduled for release in late 2019. The question many people are asking is this: what will happen to Hulu a majority owned by a company that launches a competitor in Hulu?

This is the wrong question. The right question: how many Hulu just becomes Disney +?

Streaming sites do not arrive overnight. They require a lot of infrastructure investment, in a way that is both obvious: creating an interface designed to help users choose which programs to watch and much less. Think of the need to create a billing service, a customer service, a technical support service, etc.

Any gigantic company can of course hire a lot of people to take on these jobs. But in the case of Disney, taking control of a technological entity like Hulu (who has already thought about all this) will save him a lot of installation. Similarly, WarnerMedia seems to think that HBO – which already has a robust streaming operation in HBO Go and HBO Now – is at the heart of what will eventually become a more complete streaming service. If the infrastructure is in place, why not build it instead of starting all over again?

The question of "what happens to Hulu?" Is therefore misleading, because for me, Hulu seems to be at the heart of the future of Disney's streaming strategy. Disney + could end up being built around Hulu, but Hulu will be at the center of everything Disney + becomes, just as HBO will be at the heart of WarnerMedia's streaming service. (Warning, hopefully, obvious: if the other Hulu owners complicate the situation for Disney, it will limit anything Disney can do with Hulu without navigating the drama of the conference room.)

It's not too hard to imagine how things will go from there. If you're already subscribed to Hulu, why not pay a few extra dollars a month to get access to the entire Disney safe? And then a few dollars more for a "channel" Marvel Cinematic Universe or a "channel" Star Wars? Or maybe do you have a free version of Hulu – with lots of ads – and then you just pay for access to Disney family movies.

Nor is it difficult to see how this arrangement might interest Hulu, a service that has long struggled to compete with Netflix and Amazon because it is not a global player. Disney will instantly be able to give Hulu the money it needs to become such a partner – and will also seek to take Disney + Global as quickly as possible to encourage it to do so. Hulu may end up as a little bit of Disney + (probably badociated with more adult TV brands, like FX), but anyway, Disney + will probably have quite a bit of Hulu architecture in his DNA.

All this shows that, instead of the kind of unique solution we are seeing with Netflix, we are rapidly moving towards a world where streaming services have all kinds of shops, custom options and pricing levels. The change is already happening with something like Amazon's pay-per-view cable channels, or even with services like YouTube and Hulu's live TV packages. I think it's inevitable, for example, that most streaming services offer at least two levels – with and without ads – and many offer more, to control how many ads you want to watch.

But we understand why these streaming services are so appealing to multinational entertainment companies. In essence, this allows them to control their own bundles of cables, to charge you the number of channels you want to pay, without having to worry about other entities. This could look a lot like the beginnings of cable – only with corporate conglomerates controlling both the distribution channels and the programs they distribute. And they will be able to charge consumers the way they want, instead of working in the transportation fee system of the old cable companies.

So imagine a world where, to access everything you want to watch, you subscribe to multiple cable bundles on multiple streaming platforms. For me, this sounds like the opposite of what the cord cut was supposed to achieve.

Which brings us back to the old cable companies.

A return to cable harnesses is not inevitable, but it is likely

Ralph Orlowski / Getty Images

At the beginning of the cable revolution, cable companies realized that the natural solution to a world of multiple channels at varying prices was to bundle these channels into a slightly more affordable offering. Some companies will probably "rediscover" this idea as we move further into the era of streaming. And it does not matter if what is bundled is actually a packet of packets, provided it is more profitable.

Now, let's take a look at this: a shocking part of broadband infrastructure in the United States is still controlled by cable companies, which may lose television subscribers, but continue to benefit from fairly complete lockdowns. to provide the Internet. In many parts of my city, Los Angeles, the only The option when it comes to buying an Internet package is to go to a local cable company like AT & T.

At least two major cable companies – AT & T and Comcast – are in the process of having streaming platforms (WarnerMedia and NBCUniversal, an investor in Vox Media, respectively). So, they might not be thrilled to play ball with Netflix or Disney or [insert other entertainment company here] when creating cable bundles 2.0, since this could directly enrich their competitors.

But at the same time, I guess most of these companies know that they're not going to wipe out huge companies like Netflix or Disney, let alone a company like Apple, which is still waiting for wings with his own proposed streaming service, or YouTube, which has struggled to launch its own subscription service but possesses the viewer habits of the generation that has just entered his teenage years and 20 years.

Which means that ultimately, we will probably immediately return to the cable service as the only real option for accessing film and television content at home. Those who really want to do so will still be able to bademble their own "à la carte" packages (baduming that the disappearance of Internet neutrality does not lead cable companies to focus on their own streaming services to the detriment of others, which is anything else (wax).

But most of us will pay $ 200 a month for Internet and TV streaming. It will simply be easier, so horribly expensive.

Will all this happen as I say? Some of my predictions might miss the target; Maybe Netflix will surpbad everyone and consolidate its Spotify status, with all major competitors having to navigate around its ubiquity. Perhaps the deep content of Disney puts it first. Maybe Amazon does … something … and then it comes in first place? Hey, it can happen!

But I wrote a version of this article in 2016 and a surprising amount of what I had predicted happened in recent years. And when I talk to people in the TV industry, very few of them think that the future I've outlined above is unlikely. Even people working for streaming networks understand that having multiple streaming networks, each with their own unique and requested programming, asking you to pay between $ 10 and $ 20 a month, could become catastrophic for consumers. But there is too much money at stake for those who might find a way to get us to this point, so many, many players continue to chart their own way.

The era of media consolidation has made it increasingly difficult to ignore that we are heading inexorably towards a time when major entertainment companies will control distribution. and production models for their programming and can actually bill what they want. And in this world, the era of the cord cut will begin to look a bit like a rap, when a growing movement aimed at changing an unfair game into a whole new one.