Streaming services face the challenges of classic cable TV
Netflix and Hulu have recently undergone price changes. What does this mean for the future of streaming?
Photo by Tori Thiessen, Life Editor
As video streaming services run rampant in our increasingly cordless culture, these digital libraries are looking eerily like the cable TV bundles so many originally left behind for Netflix and Hulu. But does cable history define where we are heading, or is there more to come?
Netflix and Hulu have recently announced more routine price changes, but their track record of increased prices coupled with increased demand speaks to the changing landscape of TV and film.
Senior cinema major Kellen Gifford explained that these companies know their worth and are unafraid to push the pricing limits.
“Back in the day, Netflix was just a DVD service, so it’s crazy that now it’s what it is,” Gifford said. “Almost every second person has Netflix—maybe more. So, I think they know how big they’re getting, that people are going to pay regardless…because just everyone has Netflix.”
Netflix’s success has led to the expansion of the video streaming medium, where consumers can now subscribe to additional services like Hulu and Amazon Prime Video for a lower price than cable and determine their favorites according to what each service has to offer. This has allowed each service to develop a unique audience.
Assistant Professor of Cinema Beecher Reuning, for example, said Hulu is his favorite service because he and his wife can watch all their favorite network television shows the day after they air.
Gifford, on the other hand, said that Netflix is probably his favorite purely because of their original content.
Associate Professor of Marketing Dr. Karen Mountain explained that pricing and original content are the major distinguishing factors between different streaming services.
According to Mountain, as other big companies like Disney, WarnerMedia and Apple wiggle their way into the streaming party, each service should tailor their content to their specific audience to stay relevant and successful.
“[Netflix] long ago started their strategy with their own personal content, becoming a media in their own right, and they have no choice but to continue down that path, with Disney pulling out and other places becoming their own streaming service,” Mountain said. “They’re going to really have to cater to their own market, which really is the college-age market.”
As the streaming options continue to expand, consumers have expressed concern over the financial feasibility of having multiple subscriptions.
Reuning, who has subscriptions to Netflix, Hulu, Prime Video and HBO, said he is not concerned at the moment because his bill stays well below the rates of cable.
“As long as it can stay significantly cheaper than cable, I’ll put up with a lot,” Reuning said. “As soon as it becomes, though, like DC has their streaming service, then Disney has their streaming service, and if everyone starts having streaming services, then suddenly you’re paying for 10 streaming services, and it’s twice the cost of what cable was.”
Whether these concerns persist or dissolve will be dictated by how these services adjust to an increase in streaming options.
As the big three—Netflix, Hulu and Prime Video—stand now, each holds some unique content, but there is also a lot of overlap.
After Disney, Warner and Apple launch their services, the price may no longer be competitive with cable. And what’s worse, consumers may be paying several times over for the same content on different services.
Reuning suggests that a look at the history of broadcast television may hint at what is to come for streaming services. However, he believes that these services will move into a realm that cable never did: a la carte programs.
“[Television] started off with four channels, and then people, when they said it was going to expand, were like, ‘What are you going to put on more than four channels?’ And then they just filled it with stuff,” Reuning said.
“I think the same progression is going to happen with streaming services. Eventually, I feel like streaming services are basically going to be like us just picking and choosing which channels we want to pay for, which is what cable should’ve done years ago,” Reuning continued. “But cable said you can do this whole package, and you can get all of these, when really all I wanted was ESPN.”
Reuning explained that this a la carte system would allow consumers to fully customize the content they could access based upon their season of life.
Because Reuning has a two-year-old, he said he will likely purchase a subscription to Disney’s service when it launches. Once his child outgrows Disney, he would then be able to drop the service without losing a mass of other content he would still like to view.
Mountain echoed Reuning in that she believes the streaming industry will eventually find itself in an a la carte model, but she voiced concerns about the pricing of this idea.
"I don’t know how long it’s going to take to get there, but I would love to see an a la carte programming,” Mountain said. “I do watch the traditional ABC, CBS, NBC, but I love PBS and two other channels. If I could just combine just those into my own little subscription—that’s all I had—I would be very happy…but how expensive would that be?”
However, this model may come to fruition sooner rather than later as individual production companies launch their own exclusive services. Disney will have content from their production studio; Warner will have content from theirs.
Gifford explained that even Netflix is beginning to act as their own production studio with their greater focus on original content and lesser emphasis on other popular TV hits, such as “Friends,” which they nearly booted from the service.
“People got so mad about that. I know so many people who have binge-watched ‘Friends’ on Netflix, and the fact that they were going to do something like that just shows that they really want it to be mostly their own,” Gifford said. “They’re gearing towards starting to make more of their own content—and so much of it that they would even remove one of the most popular TV shows.”
As these production studios continue to move towards streaming platforms and away from the pressures of network television and the box office, Reuning said he feels more freedom as a filmmaker to create films for a niche audience.
“[When] there were just a few channels or there were just a few studios making movies, everyone wanted broadcasting, which meant that you created content that had a broad appeal for a lot of audiences. Now, with so many outlets, studios and streaming services don’t want the things with broad appeal; they want the things with niche appeal,” Reuning said. “They would rather have a show be 2 out of 10 people’s favorite show in the entire world than 5 out of 10 people’s third favorite show.”
Gifford also said the rise of streaming gives him hope as someone wanting to break into the movie industry, as pitching to Netflix or Hulu is less intimidating than Warner Bros. since they are looking for these niche films rather than general crowd-pleasers.
According to Mountain, a good strategy for Netflix would be to welcome young filmmakers such as Gifford to help guide their original content toward their younger audience.
From broadcast to broadband, the destiny of TV and film rests in the hands of streaming—for now. Whether these services will follow the decline of cable or continue to evolve into an innovation we can’t imagine life without, time will only tell. But viewers and movie-makers are hopeful.
