With Disney pulling its content off of Netflix in order to make their own competing streaming service, one has to wonder where streaming is headed in the next couple of years. When it started, Netflix was the only name in the market, offering competitive prices and a wide variety of content. Needless to say, the playing field has changed since 2007. Now, audiences have a wide variety of services to chose from, including Amazon Prime, Hulu, HBO Go and the upcoming Disney package. There are more top-tier options to chose from as well, including Sling, Playstation VUE and the new CBS streaming site All Access.
While the cost of streaming still is cheaper than regular cable for most, how long before those combined costs surpass the cost of cable?
Cutting The Cord
The interest in cutting the cord with cable and going completely digital has gained favor with many customers over recent years. Many cite that opting out of cable offers higher quality and variety while paying a fraction of the cost. In 2016, Fortune Magazine did a write up on the cost of cable in the United States, stating:
"Last year, the total for cable TV rose above $99 a month on average, and it's up another 4% to $103.10"
How long will it be then until we have all our streaming services packaged together for one fee? It's ironic to think that the idea of cutting the cable will actually lead to the consumer creating a new cable, so to speak, where a flat fee will cover as many streaming services as one would like. Depending on how many channels there are in the future, consumers would be able to chose from a variety of bundles, much like how digital cable is today.
A Growing Market
As everyone seems to want to enter the streaming market and create their own awarding-winning original content, like Netflix did with House of Cards, the interest in these services will go up. Amazon CEO Jeff Bezos has recently stated that he wanted his creative department to find him their answer to Game of Thrones, tasking Amazon Studio's chief Roy Price with making "big shows that can make the biggest difference around the world."
Disney has already expressed interest in creating original content on their platform and having their new films like The Lion King and Toy Story 4 be available there from the outset. And why shouldn't they be interested in doing this? Streaming is in, while box office numbers are down, plummeting from "$1.4 billion in 2009 to $886 million this year," as stated in a recent Yahoo Finance report. While we have no idea how many services will be available in five to ten years, we can be quite confident that they'll continue to grown and the cost of having all that content will naturally grow with it.
Of course, the issue of regional exclusive content will come up again. Services like CraveTV are currently available only in Canada but Hulu is only available in the States. The question of who benefits most from this proposed concept is definitely something that may cause issue with some customers. Another problem would be how to make a bundle cost effective for the individual companies, if they do it at all. This could theoretically include partnerships between companies, or all these platforms coming together to create a new company that would monopolize the market.
The concept of streaming isn't just limited to films and television. Also part of Disney's new plan is to launch a separate ESPN channel, opening the floodgates to having sports as part of the package. Whether Disney creates a bundle with the two channels remains unknown as of this moment, but it's definitely an indicator that the future of entertainment lies on the internet. How long until other sports channels, cooking or even basic cable make the transition to have online streaming services? Many cable channels have an on demand service, which is a step towards this initiative, but is still tethered to the original cable plan.
Having these services bundled together may seem like taking a step backwards, but financially, it'll make the most sense for the consumer. It'll likely mean the end of cable TV as we know it, but it'll start the beginning of a new chapter (which ironically, will look an awful lot like the past).
That is, of course, if the streaming services can come together and find a way to continue to make profits while also offering a bundled package that saves money for the consumer. Otherwise, there would be no point to this potential enterprise and consumers will be left wondering which streaming channels to chose from.