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The Future of Streaming

My degree is in Literature and Education, and I have been writing for Hubpages for over 9 years.

The world is gradually transitioning from linear television viewed through cable and satellite subscriptions to streaming. It is a dynamic yet somehow gradually changing landscape, and many of those anticipated changes, particularly the pending migration from Netflix, will be explored here.

The Big Four Will Eventually Take Over as the Predominant Streaming Services

The three original US streaming services—Amazon Prime Video, Netflix, and Hulu—established a model that included both movies and television programs. Coincidentally, over the past few decades, four of the countries five largest film studios have combined with major television studios to form media conglomerates: Warner Bros. Pictures and HBO, among others, are part of AT&T’s WarnerMedia, The Walt Disney Company now owns Fox and ABC, Paramount Pictures is owned by ViacomCBS, and NBCUniversal is self-explanatory. All four were content to sell the short-term streaming rights for their productions to those three services when streaming was new and the market was small, but now that the streaming market is expanding, they are gradually taking their toys and going home. Once streaming passes linear television as the place where most consumers view programming, almost all of the productions of those four media conglomerates will become exclusive to their own individual streaming services, a process that should be largely complete by 2025.

It almost seems unfair that Star Wars and Marvel are part of Disney Plus. Didn't we use to have antitrust laws?

It almost seems unfair that Star Wars and Marvel are part of Disney Plus. Didn't we use to have antitrust laws?

Hulu/Disney Plus

Because they’re both owned by Disney and are included in a bundle that matches the price points of HBO Max and Netflix’s top tier, Hulu and Disney Plus can generally be considered one entity, and that bundle should eventually represent one of the top two streaming services. That being said, continuing to offer Disney Plus individually is a brilliant choice; even cost conscious parents are likely to carry the family-friendly service at all times, even when they’re supplementing it with a service other than Hulu that offers more adult fare. Disney essentially formed what would be a formidable future streaming library when it acquired ABC, but it was their acquisition of Fox that really puts them over the top with regards to both film and television content. Hulu has been Netflix’s primary competitor for years through licensing deals with other content providers that have supplemented their own library, so overall it stands to lose more titles than it gains over the next few years. Still, even when the dust settles and most properties have gone back to their original production companies, Hulu/Disney Plus will have a distinct advantage because it represents two major networks and two major film studios.

As much high end content as HBO Max has, Harry Potter won't return until a deal with NBCUniversal expires in 2025.

As much high end content as HBO Max has, Harry Potter won't return until a deal with NBCUniversal expires in 2025.

HBO Max

HBO Max should emerge as the other top tier streaming service. Warner Bros. can obviously present a film catalog that can match anyone’s, and HBO Max has been more aggressive with regards to making its biggest titles available for streaming than Paramount Plus and Peacock have been. In addition, Warner Bros.’ Looney Tunes, Cartoon Network, and classic Hanna-Barbera properties, as well as their deal with Sesame Street, place it second only to Disney with regards to children’s programming. Finally, HBO Max’s long term television series offerings aren’t limited to HBO productions, those of the short lived WB network, and their portion of the programming broadcast on The CW. Warner Bros. Television Studios has been producing programs that were originally broadcast on other networks since the 1950s. Several major titles that were widely announced as acquisitions by the streaming service, including Friends, The Big Bang Theory, and The West Wing, were actually instances of Warner Bros. reacquiring the streaming rights to their own productions. With a huge library already in place and multiple major properties likely to be reacquired over the next few years, HBO Max is really just waiting for reality to set in for Netflix.

the-future-of-streaming
NCIS and Criminal Minds have been two of the most watched shows on Netflix.  Their eventual departure (the last two seasons aren't available there now) will give Paramount Plus a boost and take Netflix another step closer to reality setting in.

NCIS and Criminal Minds have been two of the most watched shows on Netflix. Their eventual departure (the last two seasons aren't available there now) will give Paramount Plus a boost and take Netflix another step closer to reality setting in.

Paramount Plus

ViacomCBS’s current offering isn’t particularly impressive, but it has the potential to eventually be formidable. In addition to Paramount Pictures and CBS, the conglomerate also owns Showtime, Comedy Central, Nickelodeon, BET, and MTV. Licensing deals are keeping some of Paramount’s prominent titles off the service (Alfred Hitchcock films are notably absent and the most recent Star Trek and Mission: Impossible films are currently streaming on other services), but that should change over time. The addition of a significant portion of the Paramount library (literally a thousand movies) in June will help, and potentially making all Star Trek properties exclusive to the service would also be a huge step. However, Paramount Plus won’t really take off until Showtime is included as part of a bundle that matches the top price points of the other services, and that won’t happen until cable and satellite subscriptions to Showtime dwindle significantly.

Syfy hasn't produced much high end content, but Battlestar Galactica definitely makes the list.

Syfy hasn't produced much high end content, but Battlestar Galactica definitely makes the list.

Peacock

In addition to their primary television network, NBCUniversal owns USA Network, Syfy, Bravo, and Telemundo. Although those supplemental content sources haven’t produced quite as many hit programs as those of the other conglomerates, Bravo and Telemundo do give Peacock an edge in reality programming and Spanish language programming respectively, and the recent distribution deal with professional wrestling provides another niche market. Also, once home video sales further dry up and licensing deals expire, the service can beef up its film offerings substantially by incorporating their successful film franchises (NBC Universal also owns DreamWorks Animation), which have for the most part been absent from the service to this point. Peacock does seem to have perfected the ad supported streaming model; the service’s free tier presents roughly a third of the advertising of broadcast television with individual breaks routinely lasting a minute and a half or less. That is noticeably less advertising than Hulu’s ad supported version, which makes the presence of the ads far more palatable.

the-future-of-streaming
Netflix is generally light on comedy, but if you're okay with irreverent humor (it's kind of messed up) then Big Mouth works.

Netflix is generally light on comedy, but if you're okay with irreverent humor (it's kind of messed up) then Big Mouth works.

Netflix Will Fall to Fifth Place, and Will Eventually File for Bankruptcy Without Major Changes

Knowing that it would gradually lose its licensed content, Netflix made the only choice it had for long-term survival by switching to original content. Unfortunately, the company has taken a few missteps along the way.

First, Netflix has essentially become the home of the relatively low budget art house film. While that’s great for cinephiles, it may not be the best investment towards creating a lucrative permanent library. If that type of movie isn’t watched within its first month or two on the service, then it likely isn’t going to be watched at all. Even Netflix’s Oscar nominees are overwhelmingly dark, and those simply aren’t the types of movies that viewers are likely to rewatch; most people get a large enough dose of the harsh realities of the world through their everyday lives and look for some form of escape in their downtime, either through action or through shiny happy people holding hands. The service’s list of the top 10 movies of the day is routinely littered with b-level action movies or comedies licensed from other sources (remember American Ultra?), and that doesn’t bode well for their original content.

Netflix has also hurt itself by not allowing all of its successful shows to come to a satisfying conclusion. For example, the sci-fi series The OA was critically well received, yet it was canceled by the service after two seasons due to low initial viewership despite being planned for five, while GLOW did have an audience and even won a few Emmys for the service before being prematurely canceled. No one is going to start watching either show knowing that they ended with cliffhangers, which means they have no long term value to the company. Even Netflix’s seemingly successful long running shows that are allowed to come to a satisfying conclusion top out at around 40 total episodes, compared to the 150 or more episodes produced by long running network programs (House of Cards, Orange is the New Black, and Fuller House are among the few exceptions, and no show has passed 100 episodes). Netflix has essentially turned itself into streaming fast food, and the long-term value of what the company has spent its money on is extremely limited.

Finally, the service has begun to dabble in big budget films. Netflix recently spent $450 million dollars to acquire the rights for two sequels to a standalone murder mystery. As was readily apparent from the fact that the five major studios essentially kicked the can down the road with regards to releasing their big budget movies during the pandemic, those movies can’t cover their own production costs without a theatrical release. A single movie isn’t going to move the needle significantly with regards to monthly streaming subscriptions, so that type of financial investment simply can’t be made back through streaming alone. Netflix additionally attempted to address the deficiencies in their film catalog by signing a deal with Sony to secure the streaming rights to their movies for an eighteen month period after their theatrical release, but it probably would have been better served long term by signing a partnership deal with Sony to be the exclusive host of their library in exchange for an ownership stake in the company. (Sony, by the way, may have played this better than anyone; because they’re the only major film studio without their own platform (and they have their own moderately productive television studio as well), they can charge premium prices to license their content to their competitors, and it is quite possible they are profiting more from those licensing deals than they would have if they had started their own streaming service.)

When it comes to original content, Netflix has put itself at a huge economic disadvantage from the very beginning. By avoiding advertising completely and for the most part skipping theatrical releases for its films, Netflix is bypassing the revenue models that have traditionally covered the production costs for television and movies. By contrast, library titles from the four conglomerates have already paid for themselves primarily through advertising and ticket sales, and the revenue those properties generate through streaming is mostly profit. Netflix has dealt with this problem by borrowing money, and that practice will begin to catch up with them as they continue to lose prominent licensed titles and gradually start losing subscribers as a result. While it is possible that the company could survive bankruptcy, it will probably be a very different service after that.

Fleabag garnered several prestigious, well-deserved awards for Amazon Studios.

Fleabag garnered several prestigious, well-deserved awards for Amazon Studios.

Amazon Prime Video Will Continue to Exist, for Some Reason

Amazon Prime Video is a fascinating business enterprise. It’s a solid streaming service that has produced a moderate amount of very likeable, high end content (The Boys is one of the most popular shows on the planet right now). That being said, most Prime members would pay the $12.99 a month membership fee just for the shipping advantage it provides, which means that Amazon Prime Video doesn’t really make any money for Amazon. Amazon does make some profit from their various add on channels and video on demand rentals and purchases, but the Included with Prime offerings are mostly expensive window dressing.

Pirates of the Caribbean: On Stranger Tides has the record for most expensive film ever made, and it cost a mere $379 million.

Pirates of the Caribbean: On Stranger Tides has the record for most expensive film ever made, and it cost a mere $379 million.

Movies Will Not Have Billion Dollar Budgets—At Least Not Without Significant Inflation

A misguided executive made the claim that, because of the money generated by streaming subscriptions, blockbuster movies will eventually have billion dollar budgets. First of all, even if a movie is three hours of high end, expensive, realistic looking CGI like the dragons in Game of Thrones, it isn’t going to cost a billion dollars. More importantly, while streaming is ostensibly an entirely new source of income, it actually comes at the expense of two older revenue streams that are drying up. In many cases, streaming is directly replacing the money that the media conglomerates had been making from cable and satellite subscriptions; instead of carrying both, many consumers are dropping the more expensive linear television packages in favor of streaming. Streaming is gradually going to significantly impact the home video market as well, particularly in cases where films are made ever-present on a streaming service, which is the case for everything on Disney Plus and appears to be the long term plan for Warner Bros. titles like Lord of the Rings and Harry Potter. That statement was particularly disturbing coming from an executive that works for a conglomerate carrying a huge amount of debt. Streaming should generate slightly more money for the conglomerates than cable or satellite subscriptions because it doesn’t involve an expensive third party like the cable and satellite companies themselves, but even that is partially dependent on how large Roku’s market share gets and how much money they are allowed to extort from actual content providers.

NBCUniversal fought the good fight and eventually used its own leverage to get Peacock on Roku.

NBCUniversal fought the good fight and eventually used its own leverage to get Peacock on Roku.

Roku Will Continue to Make Money for Nothing Until They are Federally Regulated

Much like cable and satellite providers before them, Roku (and Amazon Fire as well, although Amazon does at least create content) has used their position as a necessary conduit between streaming services and consumers to extort increasing amounts of money and other perks from actual content providers. They’ve already gone as far as keeping HBO Max and Peacock away from millions of consumers in order to negotiate deals that allow them to profit more from content that they had no hand in creating. Cable and satellite companies did at least have to provide service to your home which cost them money; Roku doesn’t even have to do that, as their devices are plug and play. There is nothing to prevent Roku from doing that, and there won’t be until they are subjected to some sort of federal regulation. To be clear, if you like the content itself and want there to be more of it, Roku’s extortion of content providers is a bad thing.

The Transition to Streaming Will Ultimately Save Money for Economically Challenged Consumers

Because Netflix did seem to have everything for a long time, consumers have been slow to adapt to the true nature of streaming services. A streaming service isn’t the equivalent of a cable or satellite provider; it’s really a channel, only in this case, assuming that you’re at all conscious of costs, it isn’t a channel you change every half hour, but rather one you change every month or so. With the creation of a new viewing habit, binge watching, the need to carry more than one channel at a time has been eliminated. While the price for subscribing to a single streaming service has increased slightly over the last thirteen years, it still pales in comparison to the cost of a cable or satellite service, and that will likely always remain the case (streaming packages that include live TV are becoming comparable in price to cable and satellite, but those services are more like cable or satellite packages with a different conduit than they are to an individual streaming service). Being a sports fan does currently create a problem, but once ESPN realizes that it would profit more from selling a sports package directly to consumers than going through a third party like Sling, YouTubeTV, fubo, or Vidgo, the costs of that should go down as well. Overall, the transition to streaming should be a positive one for consumers.

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