It sucks for the employees and executives laid off (especially during this pandemic), but audiences continue to consume a steady stream of high quality scripted content (ranging from low budget sitcoms to high budget action movies). If executives at Warner Media struggle to meet shareholder expectations as audiences vote with their wallets and opt for streaming services instead of cable bundles then so be it. The executives at Netflix have earned their place (and one day, they too will be replaced).
Streaming services may be 'in control' but they're still as bad as, or controlled by, the studios they're replacing.
In the UK, suppose I want to watch Forbidden Planet, or Gone With The Wind, or Carry on Screaming. Show me a streaming service that has those films. I either wait 6 months and hope the TV shows them or.... hello bittorrent. Even more recent films.
Suppose I want to listen to Louis Armstrong, or Ella Fitzgerald? Spotify, Apple Music, and Amazon Music all have those songs.
It's just a shame we didn't have higher bandwidth in the Napster era to do to the studios what it did to record labels.
That's a "controlled by" problem, not an "as bad as" problem. Region restrictions are primarily imposed by studios, so that they can make different exclusive licensing deals in different regions.
The other thing going on is that Netflix' DVD service drove Blockbuster et al out of business and now the Netflix back catalog is pretty terrible. So you increasingly can't rent a disc if something isn't available streaming--even a la carte. (In fairness, many films are available for Amazon pay-per-view that aren't on all you can eat subscriptions, including 2 of the films you mention.)
But it's a mess generally. I don't know if it's Napster/bandwidth given that mechanical licensing for music is much older. In any case though, we've largely moved to a new medium but a lot of content hasn't moved over.
I canceled my DVD service a year or two ago because I was doing a lot of work travel and I'd end up with discs sitting by my TV for a month. I've renewed it for now during the pandemic. It's fine for recent movies but the back catalog has gotten pretty bad. I've mostly resigned myself to paying for streaming rentals plus buying a Blu-Ray every now and then if I think it's something I might want to rewatch.
I suspect there isn't a critical mass for a robust DVD service any longer. RedBox skims some demand for current blockbusters and a lot of people want content right now.
> RedBox skims some demand for current blockbusters and a lot of people want content right now.
I really can't emphasize the right now enough. I'm never planning things I want to watch days in advance, so a by-mail service just doesn't work (plus there's the physical hassle of having to mail stuff all the time and dealing with the inevitable hassle of things going missing in the mail).
I just can't imagine waiting for something to come in the mail when I could instead fire up BitTorrent and be watching it 30 minutes later. The music industry learned their lesson from piracy but the movie industry still hasn't. Things will hopefully change now given that theaters are a much-reduced experience; they did always have the benefit over music in that whether you buy the music CD on launch day or pirate it digitally, the listening experience itself is identical, whereas seeing a film in theaters on launch day is definitely still quite different than watching some shitty pirated cam version, assuming the shitty cam version is even out by launch day (it isn't always).
As long as I'm around to watch them, I actually find getting DVDs by mail is a low effort way to catch up on the previous year's award winners; there's always a film I want to see sitting there. And I usually don't need to watch something in particular right now. It's just increasingly not a great way to watch older films.
Libraries. Your local library probably has a large selection of DVDs, and most libraries are part of networks that can request everything you can't find locally. The only downside I've found is for kids' movies, as those are invariably scratched beyond any usability.
I live in a small town so my library doesn't have great selection. I have gotten DVDs out of the library when I've been down there for some other reason anyway. But, for the most part, I find it's more effort than it's worth.
This isn’t an article about streaming services replacing studios, it’s an article about streaming executive culture replacing studio executive culture.
As an example: I'm paying for Netflix and Amazon prime. I'm not going to pay for more services because I don't value watching TV more than that.
We buy or rent a specific movie maybe once a quarter at most.
So total expenditure on TV services is around $20/mo.
Almost everyone I know is in a similar situation. Some swap one of those services for something else, many are sharing subscriptions with other households.
So right now most people are paying a fairly fixed amount for access to a portion of TV and film. The total money flowing in seems to be enough to support the entire industry.
If a service that cost $20/month for access to everything came out, I'd definitely switch. I imagine most of my friends would as well.
Then the total money flowing into the industry would be the same, but everyone would have access to all the media.
It's not enough to support the entire industry, that's the point of the article. $20 a month has never been enough, bearing in mind it's effectively replacing (in north America) cable which used to cost much more than that and those channels used to run ads as well!
I suspect a lot of people buy or rent more than you and your friends.
For example, many people have either a cable TV or online streaming subscription that's another $50-100/month. HBO would be another $15 or so. And so forth.
There is an argument that, at some point, there are only so many hours in the day and a Spotify for video (i.e. most content for one monthly fee) makes sense but that's probably a $100-200/month fee in the US (assuming you could get most players to cooperate). YouTube TV alone is $65/month these days.
Are normal working people really willing to pay hundreds of dollars a month for some TV? Nobody watches that much TV surely? And how many have that kind of spare cash?
I feel like outside of the rich, $10-15 is about all you can reasonably ask people to afford for a pure luxury like this.
"According to a Nielsen report, United States adults are watching five hours and four minutes of television per day on average (35.5 h/week, slightly more than 77 days per year)."
I.e. a good chunk of people has the TV running in the background all the time. Another chunk is just watching whatever during the day. How much do you think those demographics value that financially?
My intuition is that the 90s provided a good high-water mark for pre-internet entertainment spend. The average price of a cable subscription which in 1995 was $22.35/month [1] (inflation adjusted to $38 [2])
So $40/month. I'd add to that whatever the average blockbuster price was $5 * 4-weeks (quick googling didn't give me a great answer, but I found 2.18 GPB for 1995, so probably $3-5 with conversion and inflation).
That makes roughly $60/month for the average American at-home tv/movie spend in the 90s. I suspect that still is the rough tolerance.
I would guess that the distribution today is at least somewhat bimodal based on whether someone pays for a live TV package whether cable, satellite, or streaming. Any of those probably cost at least $60/month (in no small part because of sports).
I expect that typical other streaming spend (Netflix, a la carte rentals, maybe a premium Print add-on or HBO, etc.) probably don't add up to more than $30-40 a month or so.
Many people did and do pay $100 for a satellite or cable TV subscription and add on premium channels (movies/sports) to that. And many of those same people go out the movies (during normal times) a couple times a month and possibly rent/buy DVDs as well (though less than in the past). And while most of those people are presumably not poor, I'm sure many of them are not rich.
And, as I said in another comment with respect to streaming, YouTube TV alone is $65/month.
So, yes, many normal working people do pay on the order of a couple hundred dollars a month for video entertainment.
Sky TV UK charge £59/mo ($77) for the package with sports and movies. The "everything" package with UHD and a second set top box costs £97/mo ($127). Nearly half of UK households have satellite or cable TV.
If you spend 4-5 hours a night coding on personal projects you probably have both a pretty strong self image of yourself as a developer and probably people who know you see you that way as well. Same goes for if you read for 4-5 hours a night, gamed, worked out, cooked, swam, whatever. Reader, gamer, bodybuilder, amateur chef, swimmer, etc. If you consistently do something for 4-5 hours a night it's generally a big part of who you are.
TV stands alone where people do it 4-5 hours a night and its not considered being super in to that thing. People in the tv watching category don't see it as choosing to do a thing. It's just part of what you do. Sleep, work, then tv. Repeat. They don't identify as a tv watcher any more than they do as a sleeper.
You'd be surprised. In our household we pay for a sports streaming service and watch the occasional movie over Xbox video, but otherwise we don't use any other streaming service.
Our friends have recommended over 200 hours worth of TV since the pandemic hit, and everyone is quite horrified of how big our things to watch list has grown. It's months worth of spare time where we simply wouldn't do anything else.
> There isn't a world where you can pay $20 a month and get everything, every movie, every tv show, ever, the finances just don't work.
It is the promise we were sold on when Netflix first started online streaming: without the costs of distribution and physical media creation, it would actually be possible.
I'm happy to be corrected, but I don't think costs of distribution or physical media creation actually add up to that much in comparison to the cost of actually producing the content which pretty much only ever gets more expensive.
People think physical media has much higher costs than it does. Don't know about movies, but about $2 of a hardcover book costs are associated with printing and distribution--and that has far less infrastructure associated with the digital version.
Netflix has never had a great streaming movie catalog. As a senior Netflix exec told me, "people come for the movies and they stay for the TV." So, to the degree Netflix streaming ever claimed to be about having all the films, it was always something of a bait and switch.
Theoretically, a fairly good subscription video catalog plus live TV is probably possible. But as I said elsewhere, it would probably be more like > $200/month than $20. Recreating the cable bundle streaming is already pushing north of $100.
>without the costs of distribution and physical media creation, it would actually be possible.
Did anyone seriously think just because you don't need to make blu-rays any more a 50 million dollar TV show or movie can just be sold for next to nothing? It's probably not even 1% of the production costs.
Even weirder because I've never seen anyone think that Red Dead Redemption would coast 5 bucks if they only sold it on steam
The lack of unified interface is my biggest gripe. I pay £12/month for Netflix, £8/month for Amazon Prime, £6/month for Disney+. Used to have to pay £8/month for NowTV to watch GoT in 720p. My Android TV has a Google Play store embedded in it for me to rent/buy in one tap. I often find myself jumping ebtween 4 different apps on my TV to figure out what content is where to watch, and occasionally end up finding out it's an iTunes exclusive. That's assuming the content is available in the UK at the time - many TV shows just aren't available on any of the UK equivalent streaming services until months later than the US (Mandolorian for example)
I don't want the content for free/bargain prices. I want the content in a reasonable format, that I can play legally on my TV, phone or laptop, and that I can discover easily.
Compare that experience with something like popcorntime, where a user can type in a movie name, and have it streaming in 1080p/4k/highest available quality in under 30 seconds.
Yeah, I find myself spending 10 minutes searching for something on Netflix only to realize it's on Amazon.
People didn't like cable bundles. Now it's a la carte in various ways and people are realizing that it's not only not cheaper if you want "everything" but it's a fragmented mess.
The search on my Roku is across services. I'd like to have a cross-service discovery app too, but the in my roku (and even better, on my roku phone app where typing is easier) I can type a movie name and see if it is on one of the services I use, or if not in Amazon to rent/buy).
That's really helpful. My Android TV will let me do voice commands to "Play X on <Service>" but if it's not on the play store, it won't respond to "Find <X>". Unfortunately, I'm not in the roku ecosystem right now, but this would be something that would make me change!
Fire TV also has cross-service search which I find good. Roku has a more streamlined clickthrough interface but Fire TV generally shows me where something is available even if it takes a few more clicks to get there.
From some googling, It seems like the median movie costs about $18M to make, while the average is about $70-100M and something like the avengers is around $200M. Oscar winners seem closer to median or average cost than avengers cost.
For shows, it seems to be in the $0.5-10M per hour range. I'll wave my hands lazily and call a season $5-100M.
If about half of US households spend $20/mo on these services, that's $16B per year. If half of that went to making movies and shows, it could make something like 500 median movies per year, 100ish average movies, or 40 avengers-caliber movies. For shows, it'd be 80-1600 seasons per year.
Apparently something around about 500movies and 500 shows come out each year.
I'm sure these numbers are way off, but the orders of magnitude are probably reasonable and suggest to me that $20ish/mo for everything ever is likely a little low, but not insane.
> $20 a month and get everything, every movie, every tv show, ever
I'm surprised, thought, that there's no service that offers a lot of old movies. I get it - the Avengers movie that was just released cost a few hundred million to make, so it would make sense that it would be harder to find on a streaming service than something that came out in the 80's. What I find is the opposite, though - it's easy to find recent big hits online than it is to find, say, Bladerunner or Bill & Ted.
The monopolies are always seen good in their infancy. You always forgive them for mistakes as they are new and fresh. Then they begin making significant mistakes as they age. And finally become too powerful and you realize they are truly a monopoly. See Google. Everyone ‘welcomed their new google overlords’. Now we see how awful they are for the world.
I feel like you are purposefully ignoring the fact that you can easily get all of those movies (and tons of others not on streaming services) on DVD or Blu-ray for relatively cheap. As another commenter said, you can also rent them from any number of services for $2-$4.
While I don't love the current state of affairs, I dropped cable TV recently (which I hardly ever watched) and I sort of take the attitude that it makes sense to keep my monthly subscriptions down and periodically buy, whether disc or streaming, or rent a la carte things I want to watch--especially given that I don't really watch all that much.
That is no longer always possible, some movies just don't release on DVD or Blu-Ray anymore or it takes a very long time after release before they appear as Blu-Ray (as to not take profit from streaming services)
There is plenty of movies that are not available to me. They're not available for streaming or as bluray, and in some cases cannot be imported legally either.
Even record labels came out unscathed, relatively.
It's not like we live in a world where artists record songs, and get paid by streaming services. Record labels get paid, and they pay artists with hollywood accounting. All the control is still with them.
They have much less control of what becomes popular. Recording has no need for upfront, risky capital anymore... Once upon a time, you needed a lot of money to cut & press a commercial album. A warehouse full of records, physical distribution, the advertising to make that work.
The "record deal" was essential because someone had to fund an album. The record industry was built around this, with the portfolio of "signed artists" being their primary asset. Napster, Youtube & Spotify haven't really changed this... They've affected it, but the system survived irrelevance.
The reality of content industries (and many other ones) is that centralisation is everything. The big hollywood studios, record labels & such will take the lions share. If they don't, it will be netflix, youtube, spotify & such. Someone will be in position to dictate terms, and it's not the artists.
That's because it's not only poorly marketed but also a completely awful idea. It's 8-minute shows, chunks so small that it's hard to get invested because a full season can be less than a feature-length movie but has the ambitions of one. Some episodes are actually less than 8 minutes, most show concepts are horrid (they relaunched Punk'd!) and the people at the helm are... unusual.
My favorite quote from that: "When I ask Whitman what TV shows she watches, she responds, “I’m not sure I’d classify myself as an entertainment enthusiast.”"
I wouldn’t call Whitman and Katzenberg “unusual”. Katzenberg, by all accounts, is stereotypical power-Hollywood. Whitman is an average tech ceo. Their coupling might be a bit unusual, but it makes sense in from an “opposites attract / complement” point of view.
I do agree that 8-minute video-chunks are silly, that’s youtube territory and people are not going to pay for that as long as YT is free.
I often find myself thinking, I have spare 8 minutes, I wonder what I would do with them.
As oppose to spare few mins.
Mobile phones provide distractions for spare few moments. 8mins is not a timeframe we randomly waste. Its a commitment, clearly a commitment nobody want to make.
The first time I heard of it was the wave of articles a couple weeks back about how it was failing and would probably shut down soon. Suddenly it was everywhere but it was all coverage of how it'd already failed.
If it's a free choice between paying and not paying for a product, most people will simply not pay because that's the simplest option. Paying what you want actually is much more complicated because you end up having to try and establish the value of something to you, again much easier to just pay zero.
On the otherhand, people will support people directly to create, patreon already fills that niche, but in that respect "you" the creator are the product not just what you create.
> most people will simply not pay because that's the simplest option.
I would disagree with that. If you are young and tech/internet savy and have time then sure. But if I get back home after days work. All I have time/strength for is to put on netflix to watch the show i heard from a friend.
Convenience trumps piracy. As long as its more convenient.
The moment I need to figure out if that show is on Netflix Hulo or Amazon, etc the convenience factor is diminishing.
I will check if its no netflix, no... hbo... no ah fuck it, piratebay it is.
> On the otherhand, people will support people directly to create, patreon already fills that niche, but in that respect "you" the creator are the product not just what you create.
I have monthly budget for patreon to support people I like. There is a lot of high quality niche content that I want to see being made so I chip in.
Piracy is already back on the uptick because of all the streaming services. Wouldn't be surprised if in a couple years, the industry goes through another panic like they did 20 years earlier with online piracy.
I am an independent producer. The intent of your proposal is to send me all the money so I should like that. But let’s talk about the realities. To make a show or movie I need financing and that comes from a studio. To recover my own expenses and hopefully earn a profit I need to sell distribution rights across different geographies to different copyright holders. These entities exist for a reason. Look everyone would like to pay zero for infinite content but the reality is that without payments there is no content.
I've been completely disconnected to Hollywood as I've found better content on YouTube.
I admittedly like non fiction, and my wife likes the occasional comedy. Both of these are often better than anything you can get from Hollywood because it's more niche.
I guess I don't understand the problem. People really like their old school classics?
Coca Cola sold Columbia Pictures to Sony and Rupert Murdoch bought 20th Century Fox in the 1980s, General Electric got Universal Studios 20 years ago, sold it to Comcast, Stephen Spielberg sold Dreamworks to Sumner Redstone, who had taken Paramount off Gulf+Western, but sure NETFLIX brought a "ruthless new culture" to Hollywood.
I think considering TikTok a threat to hollywood, or a sign of diminishing relevance is naive... disingenuous even.
The medium, art and distribution methods shift. This isn't the first time. Television encroached on film. VHS. Cable. DVD box sets. Home cinema. The rise of the cinematic series.
Shifts sometimes hurt, they may even have some casualties.... but this is not dying. Hollywood, and old media generally, are in much better shape than I had expected.
Remember "information wants to be free?" Remember the initial response to ipod? The scoffs around early DRM? Disintermediation? The end of record labels? None of this came to pass.
The true economics of "content" is centralisation, exclusivity and manufactured scarcity. Tiktok (youtube moreso) demonstrates the point. It doesn't matter that you have millions of viewers. That doesn't translate into money, power or value. 0.1% of the viewership is not worth 0.1% of the money. It doesn't divide. Centralisation itself is where the value is. Content is not a "sum of parts" game.
For success, you need centralisation & control. Theatres, PPV services, cable deals, streaming services... This is why spotify is buying the top podcasts, to exclude them from itunes & youtube.
Porn is the counterexample. As a pariah, it had no ability to affect DRM, Copyright, other legal frameworks and the details of how they will be implemented.
When online payments started working, Porn had its "DVD Boom." When streaming started working, the industry collapsed again. That's what a free media market looks like. Extremely high volatility.
The record industry & hollywood have never dealt with this kind of thing. Never will, probably.
The main thing shaking up hollywood is that they're being introduced to startup/tech economics. Market caps. Short term equity plays. This takes some getting used to, but the structure is as secure as ever. They're just learning that just because investors have valued something @ $Xbn doesn't mean it will make $Xbn.
Really if TikTok is a threat to Hollywood they should hang their heads in shame if absolute amateurs with short clips can do a better job than professionals.
One thing I don't get about porn is why it remains so pariahed despite it being a foregone "pretty much everyone watches it at least occassionally single or couples". You still wouldn't list it on your LinkedIn profiles but you would think advertisers would be less afraid of it and you would see at least contraception ads preferred there as opposed to mostly circular porn advertising. There are few who would be offended by products for the recreationally sexually active who would actually use the product. Instead the only online ads I have seen for contraception are work youtube when it mistakes me for a woman.
>Porn is the counterexample. As a pariah, it had no ability to affect DRM,
Bullshit. Porn DEFINED the fucking media, no pun intended. They pushed the VHS against Beta. They were pioneers on online payment methods, and live chats over the web.
Currently, porn CDN's are HUGE, and the industry pays MILLIONS worldwide. You have no idea.
Prior to video streaming progressing to a viable point, there was no reason for anyone in the industry to have the skills to work with it.
Netflix comes along with a business model of providing these services to the industry by hosting their content on its platform
There is massive success, everyone is making lots of money doing what they are good at
The industry, lacking the skills to recognize the value netflix provided them in technical skill, tries to get a larger cut of the pie because "how hard could it be?"
Very hard. The competition leads to cannibalization of the market and the industry has a lot of catch up to do just to get to Netflix's level. Meanwhile the carpet being pulled out from under netflix allows other, actually technically competent, competitors to pick up real gains.
Where before the industry were the customers of the streaming partners, now they are competitors. Both are out of their comfort zone, but there is a lot more free-floating talent from the long term industry than the new niche technology, so the streaming platforms can become content producers faster than the reverse.
Repeated botched attempts at competition with the streaming services drains the industry of both capital and morale. Acquisitions happen at an accelerated rate as small companies run out of steam and larger ones need to demonstrate something that looks like success to investors. Innovative but risky projects get axed as the call to cut costs grows and the heads of their benefactors roll. Seemingly safe projects repeating what worked in the past are the only ones that survive long enough to produce results, but their failure to make up for the losses continues the downward spiral of morale.
A few players are large enough to shield a division from the worst of it, and they can develop a viable competitor. Others luck out on a convenient merger that actually gets them the resources they need. These become players alongside the newcoming streaming services, but their positions are much reduced in stature. For the bulk of the industry though, there is no recovery - those who can jump ship do, and those who can't re-prioritize to stay afloat just long enough to retire.
It happened with the rail companies, it happened with cameras, its happening with traditional media. It's much easier for a competitor to destroy your empire than it is for you to seize theirs intact.
Competence (IMO) plays a role for a short while. Netflix may have been especially competent early on, but that doesn't matter anymore. Streaming is a commodity. Now they have to compete in other spheres. Hence the exclusive content strategies.
I'm sure there was a time when printing newspapers was technically hard. You needed chemistry, mechanical engineering... Some people/companies probably succeeded by being good at it. Eventually though, printing becomes a commodity. Being competent doesn't matter anymore. You buy a machine. The machine is competent.
I agree on the competition point. We know the game at this point. The difference between owning 25% and 5% is not 5-to-1. It's 100-to-1. All the returns are tied to centralisation, bottlenecks.
It looks like Netflix and the old studios will meet in the middle. A cluster of content generation & platforms. They'll eventually find an equilibrium where the major compete more modestly, focusing mostly on keeping out newcomers.
The software competence may be a commodity at this point, but there's a lot more to streaming than that. The botched launch of HBO Max is merely the latest in a string of poor performances by the classic industry. Sure they can get a video to the end user, but that's useless if no one wants to watch it.
Netflix has been collecting detailed information on how people select what they want to watch for a decade. Their recommendation algorithms may seem impenetrable, but they obviously work on some level. They are refined enough that they can optimize the content they produce for consumption by streaming - they consistently have a show release every month which no one can really explain why they just have to watch but nevertheless millions of people do. No company has produced a better streaming UI than netflix and most are just straight up copies.
There were no technical hurdles preventing Kodak from creating a competitive digital camera, nor for IBM to keep making competitive personal computers. These giants faltered because they thought the technical problems were all they had to deal with, and did not recognize the non-technical changes they would need to make to stay competitive.
Some of the old studios will figure out that the streaming content market is neither about the streaming nor the content; they will adapt and even thrive. Most though are making horrible strategic blunders, and by the time they learn what they should have done it will be too late to recover. None will be as successful as if they had just stuck with netflix, made it the one and only must have streaming service, and maintained their oligopoly on content creation while cashing fat licensing checks.
Maybe. I don't know that there's an objective way for us to convince each other.
Subjectively, I just can't see "streaming media player that is good enough" as a long term differentiator. Seems like too limited a domain. I'm not dismissing "good software is hard," but this isn't iphone vs android. It's more comparable to a single app.
Recommendation algorithms... I honestly think this is overemphasized. It's selecting from a pretty shallow content pool. This isn't TikTok/Youtube/Instagram/spotify etc. Discovery just isn't that big a problem when there are circa 2000 options.
Online streaming is a content game, ultimately. You can't win on tech, I think.
There are only a few thousand options on the streaming network, you are correct in pointing out that picking a few recommendations for the user from this list is not differentiating.
For picking what content should be created and added to the streaming network, there are infinite possibilities. Selecting correctly there is very difficult to do reliably. We've all watched movies that made us ask "what the hell were the producers thinking?" Even experienced professionals can do little more than guess what audiences are looking for. When you wonder why a weak movie has 7 sequels, it's because re-using what worked in the past is a very simple risk reduction heuristic that humans are good at applying. With little to go off of beyond past ticket sales, a few test screenings, and personal anecdote, there's little a human can do to improve upon this. You get the occasional genius who has some fundamental understanding of what people like and they regularly make hits, but these people are few and far between, and still they are generally limited to a handful of genres they understand and enjoy enough to work with.
If you had pitched to me an idea for a documentary about a gay redneck roadside zookeeping convicted felon, I would find the idea that any significant amount of people would watch it laughable. No sane person would think of giving this top billing. But Netflix's algorithm spit out that for some arcane reason this would be a hit, and alas now everyone and their mother has watched Tiger King. Such is the power of analyzing tens of billions of viewing experiences in exceptional detail.
Moving beyond this, there is a widely held belief that the key to a strong streaming service is having the best content. Certainly if you are choosing between two movies at the theater you're going to watch the one you think you'll like more. Ditto for if you're flipping through the channels to see which show you want to watch. But streaming isn't the same as going to the movies or flipping through the channels. In those circumstances you have to choose the best of a small number of options that are offered right now; with streaming you watch what you want when you want. This leads to fundamentally different viewing habits. People will binge a season of TV in a weekend, or throw on a movie they've seen 15 times to have on in the background, or will watch a new movie every night for a month, and so forth. Further, the economics of streaming are different. Movies are about getting as many people as possible to pay the price of admission, television is about getting as many people as possible to watch ads, streaming is about maximizing subscription-months. It doesn't matter if 99.9% of a service's offering is crap, if they have 12 releases a year that you want to watch, and they space them out appropriately, you'll remain subscribed. On the other hand, a much anticipated blockbuster that has something for everyone but doesn't have much re-watch value isn't going to get anyone past the free trial period. Success in streaming is all about having the right combination of content being released on the right schedule so that as few users as possible go more than a few weeks without wanting to utilize the platform. When you have millions of users, this is an incredibly difficult instance of combinatorial optimization. This is why, for example, Amazon entered the space and succeeded with ease despite no experience with content creation: online streaming is not a content game, it's a big data game.
Ultimately, all such innovation implosions are a result of a mismatch between the technical challenges perceived by those looking to get into a market and the real technical challenges that actually face those in the market. The old institutions definitely have the resources necessary to reach technical parity, but they squander those resources solving the problems they think are important, not the ones that actually are. At the end of the day, you don't real...
Old Hollywood died when they stopped creating anything and started doing nothing but sequels and comic book films.
The record industry died when it stopped discovering, polishing, and promoting real creativity and instead started manufacturing pop that all sounds the same because its written by the same couple Swedish guys. There have been no major new breakthrough styles of music since the early 1990s because the industry stopped performing its talent scout function, which was its primary value add.
People will support you if you have something to support. Add no value and you are redundant and the market will go around you.
If the streamers ever stop making fabulous original content, they too will be disrupted.
Hell hath no fury like print media commenting on tech companies encroaching on their space. When did anyone actually love studio executives and their excessive compensation?
As someone who worked on early Disney streaming efforts and watched the recent Disney restructuring that saw massive layoffs, I find this article disingenuous and blatantly anti-tech.
The fact is, content consumption is more pro consumer than ever, and I think anyone who argues otherwise is looking at the past with rose-colored glasses. Content delivery has changed and the business models have followed, but this business is all full of the same people. Disney was full of ex-Warner people and vice versa. Many of my ex-Disney colleagues are now at Netflix.
The only thing that’s really different right now is the pandemic. Many of the people who’d normally jump from Warner to another company are having trouble getting new jobs right now because Hollywood production is still not at 100%, which means no one is hiring. Doesn’t matter if a Hollywood exec can do their job on zoom. Production can’t. Tech hasn’t solved that yet.
So I’m disappointed that the only thing this article has to say is “look at yet another example of how tech ruined everyone’s fun.” Between this and the Blockbuster Airbnb you’d think everyone is longing to go back to the 90s.
Oh cry me a river.. execs routinely fire people with less than a day's notice. People in leadership positions are expected to have a long-term vision of their industries, if they're surprised by this, it just validates the change of guard.
> The corporate shifts at WarnerMedia and NBCUniversal in recent days signal that the technological shift you’ve been reading about for years is finally taking concrete form, accelerated by the pandemic.
Echoes of the collapse of Blockbuster. For those familiar with Clayton Christensen's overlapping s-curves [1], the only remaining questions were the timing of the transition and whether any of the leaders in the old ecosystem could navigate the disruption; the pandemic pulled the rug out from under old Hollywood.
I'm curious how the social aspects unfold if/when the pandemic subsides. The summer blockbuster directly targeted teenaged boys and their dates (indirectly). Will a new public space emerge as an alternative meeting place for teenagers or will the smartphone be the main platform for teenage courtship moving forward?
Is the first date now an anachronism or maybe I'm the anachronism that missed this already long established shift.
Complete financial corruption, a hedonistic set of self-righteous celebrities, endless re-hashed content, #metoo running rampant (combined with the self-righteous hypocrites!) etc.
I can't wait until Hollywood is remade, more inline with reality.
106 comments
[ 4.6 ms ] story [ 189 ms ] threadIn the UK, suppose I want to watch Forbidden Planet, or Gone With The Wind, or Carry on Screaming. Show me a streaming service that has those films. I either wait 6 months and hope the TV shows them or.... hello bittorrent. Even more recent films.
Suppose I want to listen to Louis Armstrong, or Ella Fitzgerald? Spotify, Apple Music, and Amazon Music all have those songs.
It's just a shame we didn't have higher bandwidth in the Napster era to do to the studios what it did to record labels.
But it's a mess generally. I don't know if it's Napster/bandwidth given that mechanical licensing for music is much older. In any case though, we've largely moved to a new medium but a lot of content hasn't moved over.
I subscribe to both Netflix DVD and streaming.
I don’t much like serialized shows and maintain streaming mainly for my partner and the occasional one off.
Netflix’s DVD back catalog is thinning and I’m sort of at a crossroads about what to do.
I wish Netflix would spin off the DVD service and give it a chance to thrive.
They were going to do that back in 2011, but then cancelled the plans
https://www.cnet.com/news/netflix-cancels-qwikster-spinoff/
I suspect there isn't a critical mass for a robust DVD service any longer. RedBox skims some demand for current blockbusters and a lot of people want content right now.
I really can't emphasize the right now enough. I'm never planning things I want to watch days in advance, so a by-mail service just doesn't work (plus there's the physical hassle of having to mail stuff all the time and dealing with the inevitable hassle of things going missing in the mail).
I just can't imagine waiting for something to come in the mail when I could instead fire up BitTorrent and be watching it 30 minutes later. The music industry learned their lesson from piracy but the movie industry still hasn't. Things will hopefully change now given that theaters are a much-reduced experience; they did always have the benefit over music in that whether you buy the music CD on launch day or pirate it digitally, the listening experience itself is identical, whereas seeing a film in theaters on launch day is definitely still quite different than watching some shitty pirated cam version, assuming the shitty cam version is even out by launch day (it isn't always).
This isn’t an article about streaming services replacing studios, it’s an article about streaming executive culture replacing studio executive culture.
There isn't a world where you can pay $20 a month and get everything, every movie, every tv show, ever, the finances just don't work.
As an example: I'm paying for Netflix and Amazon prime. I'm not going to pay for more services because I don't value watching TV more than that.
We buy or rent a specific movie maybe once a quarter at most.
So total expenditure on TV services is around $20/mo.
Almost everyone I know is in a similar situation. Some swap one of those services for something else, many are sharing subscriptions with other households.
So right now most people are paying a fairly fixed amount for access to a portion of TV and film. The total money flowing in seems to be enough to support the entire industry.
If a service that cost $20/month for access to everything came out, I'd definitely switch. I imagine most of my friends would as well.
Then the total money flowing into the industry would be the same, but everyone would have access to all the media.
For example, many people have either a cable TV or online streaming subscription that's another $50-100/month. HBO would be another $15 or so. And so forth.
There is an argument that, at some point, there are only so many hours in the day and a Spotify for video (i.e. most content for one monthly fee) makes sense but that's probably a $100-200/month fee in the US (assuming you could get most players to cooperate). YouTube TV alone is $65/month these days.
I feel like outside of the rich, $10-15 is about all you can reasonably ask people to afford for a pure luxury like this.
"According to a Nielsen report, United States adults are watching five hours and four minutes of television per day on average (35.5 h/week, slightly more than 77 days per year)."
https://en.wikipedia.org/wiki/Television_consumption
So $40/month. I'd add to that whatever the average blockbuster price was $5 * 4-weeks (quick googling didn't give me a great answer, but I found 2.18 GPB for 1995, so probably $3-5 with conversion and inflation).
That makes roughly $60/month for the average American at-home tv/movie spend in the 90s. I suspect that still is the rough tolerance.
[1] https://www.businessinsider.com/cable-tv-prices-inflation-ch... [2] https://www.usinflationcalculator.com/
I expect that typical other streaming spend (Netflix, a la carte rentals, maybe a premium Print add-on or HBO, etc.) probably don't add up to more than $30-40 a month or so.
And, as I said in another comment with respect to streaming, YouTube TV alone is $65/month.
So, yes, many normal working people do pay on the order of a couple hundred dollars a month for video entertainment.
"Normal SV developers spend 4 to 5 hours a night coding on personal projects"
The normal people watching their TV would think those devs spend a ridiculous amount of time coding.
TV stands alone where people do it 4-5 hours a night and its not considered being super in to that thing. People in the tv watching category don't see it as choosing to do a thing. It's just part of what you do. Sleep, work, then tv. Repeat. They don't identify as a tv watcher any more than they do as a sleeper.
Our friends have recommended over 200 hours worth of TV since the pandemic hit, and everyone is quite horrified of how big our things to watch list has grown. It's months worth of spare time where we simply wouldn't do anything else.
It is the promise we were sold on when Netflix first started online streaming: without the costs of distribution and physical media creation, it would actually be possible.
Netflix has never had a great streaming movie catalog. As a senior Netflix exec told me, "people come for the movies and they stay for the TV." So, to the degree Netflix streaming ever claimed to be about having all the films, it was always something of a bait and switch.
Theoretically, a fairly good subscription video catalog plus live TV is probably possible. But as I said elsewhere, it would probably be more like > $200/month than $20. Recreating the cable bundle streaming is already pushing north of $100.
Did anyone seriously think just because you don't need to make blu-rays any more a 50 million dollar TV show or movie can just be sold for next to nothing? It's probably not even 1% of the production costs.
Even weirder because I've never seen anyone think that Red Dead Redemption would coast 5 bucks if they only sold it on steam
I don't want the content for free/bargain prices. I want the content in a reasonable format, that I can play legally on my TV, phone or laptop, and that I can discover easily.
Compare that experience with something like popcorntime, where a user can type in a movie name, and have it streaming in 1080p/4k/highest available quality in under 30 seconds.
I want that, but paid.
People didn't like cable bundles. Now it's a la carte in various ways and people are realizing that it's not only not cheaper if you want "everything" but it's a fragmented mess.
For shows, it seems to be in the $0.5-10M per hour range. I'll wave my hands lazily and call a season $5-100M.
If about half of US households spend $20/mo on these services, that's $16B per year. If half of that went to making movies and shows, it could make something like 500 median movies per year, 100ish average movies, or 40 avengers-caliber movies. For shows, it'd be 80-1600 seasons per year.
Apparently something around about 500movies and 500 shows come out each year.
I'm sure these numbers are way off, but the orders of magnitude are probably reasonable and suggest to me that $20ish/mo for everything ever is likely a little low, but not insane.
I'm surprised, thought, that there's no service that offers a lot of old movies. I get it - the Avengers movie that was just released cost a few hundred million to make, so it would make sense that it would be harder to find on a streaming service than something that came out in the 80's. What I find is the opposite, though - it's easy to find recent big hits online than it is to find, say, Bladerunner or Bill & Ted.
They're on Amazon UK. You can stream them right now. What are you talking about?
Then they were crushed by reality and we got multiple suppliers of Napster's $10/month-for-all-music offer.
Imagine if Napster had got what it wanted and became the only supplier of music? I doubt they'd still be seen as the good guy.
Ben Thompson (https://stratechery.com/2020/apple-epic-and-the-app-store/)
LOL
(Obviously there are exceptions for things made by streaming companies but even those get physical releases eventually.
The obvious answer is that either you own a DVD player or you can get one for next to nothing. Amazon has region free ones for $25.
It's not like we live in a world where artists record songs, and get paid by streaming services. Record labels get paid, and they pay artists with hollywood accounting. All the control is still with them.
They have much less control of what becomes popular. Recording has no need for upfront, risky capital anymore... Once upon a time, you needed a lot of money to cut & press a commercial album. A warehouse full of records, physical distribution, the advertising to make that work.
The "record deal" was essential because someone had to fund an album. The record industry was built around this, with the portfolio of "signed artists" being their primary asset. Napster, Youtube & Spotify haven't really changed this... They've affected it, but the system survived irrelevance.
The reality of content industries (and many other ones) is that centralisation is everything. The big hollywood studios, record labels & such will take the lions share. If they don't, it will be netflix, youtube, spotify & such. Someone will be in position to dictate terms, and it's not the artists.
I had never until this very moment even heard of Quibi
This interview gives great insight into the mess it is: https://www.vulture.com/2020/07/is-anyone-watching-quibi.htm...
My favorite quote from that: "When I ask Whitman what TV shows she watches, she responds, “I’m not sure I’d classify myself as an entertainment enthusiast.”"
I do agree that 8-minute video-chunks are silly, that’s youtube territory and people are not going to pay for that as long as YT is free.
As oppose to spare few mins.
Mobile phones provide distractions for spare few moments. 8mins is not a timeframe we randomly waste. Its a commitment, clearly a commitment nobody want to make.
I would only pay back to creators directly, no copyright holders, no studios..
Wonder how that would go...
On the otherhand, people will support people directly to create, patreon already fills that niche, but in that respect "you" the creator are the product not just what you create.
I would disagree with that. If you are young and tech/internet savy and have time then sure. But if I get back home after days work. All I have time/strength for is to put on netflix to watch the show i heard from a friend.
Convenience trumps piracy. As long as its more convenient.
The moment I need to figure out if that show is on Netflix Hulo or Amazon, etc the convenience factor is diminishing.
I will check if its no netflix, no... hbo... no ah fuck it, piratebay it is.
> On the otherhand, people will support people directly to create, patreon already fills that niche, but in that respect "you" the creator are the product not just what you create.
I have monthly budget for patreon to support people I like. There is a lot of high quality niche content that I want to see being made so I chip in.
I admittedly like non fiction, and my wife likes the occasional comedy. Both of these are often better than anything you can get from Hollywood because it's more niche.
I guess I don't understand the problem. People really like their old school classics?
The medium, art and distribution methods shift. This isn't the first time. Television encroached on film. VHS. Cable. DVD box sets. Home cinema. The rise of the cinematic series.
Shifts sometimes hurt, they may even have some casualties.... but this is not dying. Hollywood, and old media generally, are in much better shape than I had expected.
Remember "information wants to be free?" Remember the initial response to ipod? The scoffs around early DRM? Disintermediation? The end of record labels? None of this came to pass.
The true economics of "content" is centralisation, exclusivity and manufactured scarcity. Tiktok (youtube moreso) demonstrates the point. It doesn't matter that you have millions of viewers. That doesn't translate into money, power or value. 0.1% of the viewership is not worth 0.1% of the money. It doesn't divide. Centralisation itself is where the value is. Content is not a "sum of parts" game.
For success, you need centralisation & control. Theatres, PPV services, cable deals, streaming services... This is why spotify is buying the top podcasts, to exclude them from itunes & youtube.
Porn is the counterexample. As a pariah, it had no ability to affect DRM, Copyright, other legal frameworks and the details of how they will be implemented.
When online payments started working, Porn had its "DVD Boom." When streaming started working, the industry collapsed again. That's what a free media market looks like. Extremely high volatility.
The record industry & hollywood have never dealt with this kind of thing. Never will, probably.
The main thing shaking up hollywood is that they're being introduced to startup/tech economics. Market caps. Short term equity plays. This takes some getting used to, but the structure is as secure as ever. They're just learning that just because investors have valued something @ $Xbn doesn't mean it will make $Xbn.
One thing I don't get about porn is why it remains so pariahed despite it being a foregone "pretty much everyone watches it at least occassionally single or couples". You still wouldn't list it on your LinkedIn profiles but you would think advertisers would be less afraid of it and you would see at least contraception ads preferred there as opposed to mostly circular porn advertising. There are few who would be offended by products for the recreationally sexually active who would actually use the product. Instead the only online ads I have seen for contraception are work youtube when it mistakes me for a woman.
Bullshit. Porn DEFINED the fucking media, no pun intended. They pushed the VHS against Beta. They were pioneers on online payment methods, and live chats over the web.
Currently, porn CDN's are HUGE, and the industry pays MILLIONS worldwide. You have no idea.
Prior to video streaming progressing to a viable point, there was no reason for anyone in the industry to have the skills to work with it.
Netflix comes along with a business model of providing these services to the industry by hosting their content on its platform
There is massive success, everyone is making lots of money doing what they are good at
The industry, lacking the skills to recognize the value netflix provided them in technical skill, tries to get a larger cut of the pie because "how hard could it be?"
Very hard. The competition leads to cannibalization of the market and the industry has a lot of catch up to do just to get to Netflix's level. Meanwhile the carpet being pulled out from under netflix allows other, actually technically competent, competitors to pick up real gains.
Where before the industry were the customers of the streaming partners, now they are competitors. Both are out of their comfort zone, but there is a lot more free-floating talent from the long term industry than the new niche technology, so the streaming platforms can become content producers faster than the reverse.
Repeated botched attempts at competition with the streaming services drains the industry of both capital and morale. Acquisitions happen at an accelerated rate as small companies run out of steam and larger ones need to demonstrate something that looks like success to investors. Innovative but risky projects get axed as the call to cut costs grows and the heads of their benefactors roll. Seemingly safe projects repeating what worked in the past are the only ones that survive long enough to produce results, but their failure to make up for the losses continues the downward spiral of morale.
A few players are large enough to shield a division from the worst of it, and they can develop a viable competitor. Others luck out on a convenient merger that actually gets them the resources they need. These become players alongside the newcoming streaming services, but their positions are much reduced in stature. For the bulk of the industry though, there is no recovery - those who can jump ship do, and those who can't re-prioritize to stay afloat just long enough to retire.
It happened with the rail companies, it happened with cameras, its happening with traditional media. It's much easier for a competitor to destroy your empire than it is for you to seize theirs intact.
I'm sure there was a time when printing newspapers was technically hard. You needed chemistry, mechanical engineering... Some people/companies probably succeeded by being good at it. Eventually though, printing becomes a commodity. Being competent doesn't matter anymore. You buy a machine. The machine is competent.
I agree on the competition point. We know the game at this point. The difference between owning 25% and 5% is not 5-to-1. It's 100-to-1. All the returns are tied to centralisation, bottlenecks.
It looks like Netflix and the old studios will meet in the middle. A cluster of content generation & platforms. They'll eventually find an equilibrium where the major compete more modestly, focusing mostly on keeping out newcomers.
Netflix has been collecting detailed information on how people select what they want to watch for a decade. Their recommendation algorithms may seem impenetrable, but they obviously work on some level. They are refined enough that they can optimize the content they produce for consumption by streaming - they consistently have a show release every month which no one can really explain why they just have to watch but nevertheless millions of people do. No company has produced a better streaming UI than netflix and most are just straight up copies.
There were no technical hurdles preventing Kodak from creating a competitive digital camera, nor for IBM to keep making competitive personal computers. These giants faltered because they thought the technical problems were all they had to deal with, and did not recognize the non-technical changes they would need to make to stay competitive.
Some of the old studios will figure out that the streaming content market is neither about the streaming nor the content; they will adapt and even thrive. Most though are making horrible strategic blunders, and by the time they learn what they should have done it will be too late to recover. None will be as successful as if they had just stuck with netflix, made it the one and only must have streaming service, and maintained their oligopoly on content creation while cashing fat licensing checks.
Subjectively, I just can't see "streaming media player that is good enough" as a long term differentiator. Seems like too limited a domain. I'm not dismissing "good software is hard," but this isn't iphone vs android. It's more comparable to a single app.
Recommendation algorithms... I honestly think this is overemphasized. It's selecting from a pretty shallow content pool. This isn't TikTok/Youtube/Instagram/spotify etc. Discovery just isn't that big a problem when there are circa 2000 options.
Online streaming is a content game, ultimately. You can't win on tech, I think.
For picking what content should be created and added to the streaming network, there are infinite possibilities. Selecting correctly there is very difficult to do reliably. We've all watched movies that made us ask "what the hell were the producers thinking?" Even experienced professionals can do little more than guess what audiences are looking for. When you wonder why a weak movie has 7 sequels, it's because re-using what worked in the past is a very simple risk reduction heuristic that humans are good at applying. With little to go off of beyond past ticket sales, a few test screenings, and personal anecdote, there's little a human can do to improve upon this. You get the occasional genius who has some fundamental understanding of what people like and they regularly make hits, but these people are few and far between, and still they are generally limited to a handful of genres they understand and enjoy enough to work with.
If you had pitched to me an idea for a documentary about a gay redneck roadside zookeeping convicted felon, I would find the idea that any significant amount of people would watch it laughable. No sane person would think of giving this top billing. But Netflix's algorithm spit out that for some arcane reason this would be a hit, and alas now everyone and their mother has watched Tiger King. Such is the power of analyzing tens of billions of viewing experiences in exceptional detail.
Moving beyond this, there is a widely held belief that the key to a strong streaming service is having the best content. Certainly if you are choosing between two movies at the theater you're going to watch the one you think you'll like more. Ditto for if you're flipping through the channels to see which show you want to watch. But streaming isn't the same as going to the movies or flipping through the channels. In those circumstances you have to choose the best of a small number of options that are offered right now; with streaming you watch what you want when you want. This leads to fundamentally different viewing habits. People will binge a season of TV in a weekend, or throw on a movie they've seen 15 times to have on in the background, or will watch a new movie every night for a month, and so forth. Further, the economics of streaming are different. Movies are about getting as many people as possible to pay the price of admission, television is about getting as many people as possible to watch ads, streaming is about maximizing subscription-months. It doesn't matter if 99.9% of a service's offering is crap, if they have 12 releases a year that you want to watch, and they space them out appropriately, you'll remain subscribed. On the other hand, a much anticipated blockbuster that has something for everyone but doesn't have much re-watch value isn't going to get anyone past the free trial period. Success in streaming is all about having the right combination of content being released on the right schedule so that as few users as possible go more than a few weeks without wanting to utilize the platform. When you have millions of users, this is an incredibly difficult instance of combinatorial optimization. This is why, for example, Amazon entered the space and succeeded with ease despite no experience with content creation: online streaming is not a content game, it's a big data game.
Ultimately, all such innovation implosions are a result of a mismatch between the technical challenges perceived by those looking to get into a market and the real technical challenges that actually face those in the market. The old institutions definitely have the resources necessary to reach technical parity, but they squander those resources solving the problems they think are important, not the ones that actually are. At the end of the day, you don't real...
The record industry died when it stopped discovering, polishing, and promoting real creativity and instead started manufacturing pop that all sounds the same because its written by the same couple Swedish guys. There have been no major new breakthrough styles of music since the early 1990s because the industry stopped performing its talent scout function, which was its primary value add.
People will support you if you have something to support. Add no value and you are redundant and the market will go around you.
If the streamers ever stop making fabulous original content, they too will be disrupted.
The fact is, content consumption is more pro consumer than ever, and I think anyone who argues otherwise is looking at the past with rose-colored glasses. Content delivery has changed and the business models have followed, but this business is all full of the same people. Disney was full of ex-Warner people and vice versa. Many of my ex-Disney colleagues are now at Netflix.
The only thing that’s really different right now is the pandemic. Many of the people who’d normally jump from Warner to another company are having trouble getting new jobs right now because Hollywood production is still not at 100%, which means no one is hiring. Doesn’t matter if a Hollywood exec can do their job on zoom. Production can’t. Tech hasn’t solved that yet.
So I’m disappointed that the only thing this article has to say is “look at yet another example of how tech ruined everyone’s fun.” Between this and the Blockbuster Airbnb you’d think everyone is longing to go back to the 90s.
Echoes of the collapse of Blockbuster. For those familiar with Clayton Christensen's overlapping s-curves [1], the only remaining questions were the timing of the transition and whether any of the leaders in the old ecosystem could navigate the disruption; the pandemic pulled the rug out from under old Hollywood.
I'm curious how the social aspects unfold if/when the pandemic subsides. The summer blockbuster directly targeted teenaged boys and their dates (indirectly). Will a new public space emerge as an alternative meeting place for teenagers or will the smartphone be the main platform for teenage courtship moving forward?
Is the first date now an anachronism or maybe I'm the anachronism that missed this already long established shift.
[1] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
Picture reminds me of one of the Duke brothers played by Ralph Bellamy in Trading Places (1983 film starring Eddie Murphy).
Complete financial corruption, a hedonistic set of self-righteous celebrities, endless re-hashed content, #metoo running rampant (combined with the self-righteous hypocrites!) etc.
I can't wait until Hollywood is remade, more inline with reality.