The streaming entertainment market has always had the makings of a bubble, and we’ll probably remember 2022 as the year it popped.
Netflix, still the industry-leading platform, earlier this year reported net subscriber losses for the first time in a decade, which sent the company’s stock price tumbling.
This fall, Netflix began running ads on a lower-cost version of its service — something Hulu has done for years — which previously it could afford to avoid on principle. And already it’s reportedly refunding some advertisers because fewer subscribers have opted for an ad-supported subscription than expected.
HBO Max has started canceling shows and purging titles from its catalog — including “Westworld,” a big-budget series once considered a possible “Game of Thrones” successor — presumably so its parent company, Warner Bros. Discovery, can sell them to other streamers.
Disney lately has endured some highly publicized corporate upheavals in part because its streaming revenues have fallen short of projections. In the past year its Disney+ platform has joined Netflix, Hulu and Apple TV+ in hiking its monthly subscriber fees.
And anecdotally, doesn’t the user experience just feel worse and worse overall? When was the last time you looked for a specific movie and actually found it available on a streaming platform you were already paying for?
The end of the salad days — easy access to seemingly unlimited content, commercial-free, for a fraction of what cable TV costs — was inevitable. It was just a matter of when.
Ironically, the instability in today’s streaming marketplace is because of Netflix’s initial disruptive success. The company, originally a DVD-mailing service, was quick to recognize that on-demand streaming was its future, so it acquired beloved shows and movies before studios understood the value of what they were signing away.
Soon enough, other networks began hoarding their existing content and developing their own streaming services to compete. Netflix, again seeing the future, started creating original shows and movies so it could have its own library to retain subscribers when it lost the rights to popular older titles. (Early hits included “Orange Is the New Black” and “House of Cards.”)
So began the great “streaming wars” of the 2010s and early ‘20s. A growing number of media companies — everything mentioned above, plus Paramount+, Peacock and Amazon Prime Video — operated as massive loss leaders, dumping billions of dollars into new programming to attract enough eyeballs in a saturated marketplace to offset what they were spending.
This was wonderful for consumers, but the industry’s growth was unsustainable by definition.
A time would arrive (and apparently has) when anybody who might conceivably subscribe to Netflix has either done it or not done it. And even if every person on the planet joined, that’s still a finite number of subscribers in a shareholder economy that demands perpetual growth, leaving the company searching for ways to squeeze more revenue out of existing customers.
So along with the ads and higher prices, get ready for a massive crackdown on password sharing, which Netflix is testing overseas and will likely expand in early 2023.
Call this the airline strategy: making a familiar experience so unpleasant that customers feel coerced into paying to alleviate that unpleasantness.
Which is what happened after my household started a few Hulu shows this fall on the cheapest version of the service, where the episodes have as many commercial interruptions as regular old TV. During an election season, this is not an experience I recommend for anyone fond of their sanity or prone to rage.
Coughing up a few extra dollars a month for an ad-free experience was an easy decision — especially since we wanted to keep going with “The Americans,” a riveting 1980s spy series.
We also brought home a cheap DVD player from a thrift store, plus a stack of titles from an amazing library of entertainment that has become so easy to overlook. I mean the actual library, where you can get movies and shows with no commercials, no engagement algorithms, no data mining, no subscription tiers, no credit card or password required.
It almost felt like the future.