Hacker News new | past | comments | ask | show | jobs | submit login
It’s not a zero-sum game for Apple TV+, Netflix, and Disney+ (onezero.medium.com)
83 points by koriw 3 days ago | hide | past | web | favorite | 182 comments





"For months now, journalists, industry insiders, and consumers have opined on who will “win” the streaming wars and why."

The more streaming services there will be, the more likely it is that only thepiratebay and torrents will win.


It's amazing how we have gone full circle in the last 15 years or so. In the old days, people complained about their cable tv bill: why do I have to pay for 250 channels when I only watch 5 of them? Let me pay only for what I watch.

Now that the future is here, people are complaining that they need to sign up for too many streaming services. Why can't I just pay once for a bundle and get everything I need?

I'm just as guilty as everyone else, I don't have a good answer...


>why do I have to pay for 250 channels when I only watch 5 of them? Let me pay only for what I watch.

But that is still the case. If I could only pay for the shows I watch, I would not complain. But if I watch one Netflix show, I can't just subscribe to that show, I must pay for a ton of stuff I'm not remotely interested in.

You still have Netflix, Disney+ and all the cable channels you need to subscribe to if you want their shows, how is this better for the consumer ?

An actual 'A la carte' situation is that of the consumer being able to actually handpick the shows they want and only pay for those. This will never happen due to the industry being absolutely hostile to the idea, second best from a consumer standpoint is a single huge distributor like Netflix where you would pay larger fee but have access to practically everything you want, that is now pretty much a pipe dream since every major player wants to run their own streaming platform. This is not the way to beat piracy.


> An actual 'A la carte' situation is that of the consumer being able to actually handpick the shows they want and only pay for those. This will never happen due to the industry being absolutely hostile to the idea...

We've been able to do this with a substantial number of shows for years, though, by buying individual episodes or "season passes" on Amazon and iTunes. Maybe people just don't know, maybe people think the prices are too high, but more than likely the market has just largely moved on from this model for much the same reason that it moved on from CDs: the rise of streaming. (But put a pin in that for a second...)

> ...second best from a consumer standpoint is a single huge distributor like Netflix where you would pay larger fee but have access to practically everything you want...

This is what we all want price-wise, but would we really, truly want to turn Netflix into the equivalent of the iOS App Store for essentially all legal streaming movies and television?

Everyone blames the proliferation of streaming services on rapacious greed, and, I mean, sure, the profit motive is mighty. But it's also a matter of keeping control. Broadcast networks and cable companies are middlemen who not only take a cut of the profit but who also act as gatekeepers; it's a little mad to think that producers would want to free themselves from that system only to rebuild it with a single all-powerful company in the command seat.

Sure, not all the streaming services will survive, especially at the prices Netflix is currently charging. But I'm not convinced that the world is really going to rise up and rebel against having to pay $50 or $60 a month total to a half-dozen providers for commercial-free, on-demand access to hundreds of thousand of shows versus paying $100+ a month to a single provider.


The problem with buying Season Passes is that they're usually a terrible option for many reasons.

They're usually not available until well after the season premiered (12+ months later), roughly at the same time that the DVD/Bluray comes out.

The quality of them is iffy, at best - SD or HD at poor bitrates. Fine for watching on a tablet or laptop, marginal at best on a TV/Surround system.

They're tied to watching on that specific platform, and you're fucked if you wanted to watch on another platform, and if that platform goes away so do all your purchases.

They're region locked, so if you went overseas for a bit, you can't access them.

They're often either as expensive, or more, than the physical Bluray.


The season passes I bought on iTunes -- which was admittedly some years ago at this point -- actually added each episode the day after they aired on TV. It's my impression that's still the case with most shows; the exceptions are shows on "premium cable" channels like HBO. The bit rates of the shows that I got were comparable to most of the files that I'd previously pirate^H^H^H^H^H^Hfound just lying on the street like they'd fallen off the back of trucks.

The rest of your complaints are certainly true, though. As I mentioned in another reply, I think it's possible that if this a la carte model had taken off, there would have been successful pressure to go DRM-free just the way that there had been for music, although your mention of region-locking brings up that whole "international rights" folderol that's still with us even in the streaming world, so...


I'm still waiting for "Steam for TV series/Films". I've always felt that that approach would work better as we're unlikely to get a single streaming service with "most content" akin to music streaming". The model works well for distributing games and doesn't have any of the deal breaking problems that you listed (well except for it going out of business, but should not be a problem as long as you have access to the files). I can't really see a reason why it would not work for films or TV series.

Just provide something that isn't worse than torrents and reasonably priced and I'll happily buy the content I'm interested in.


Incidentally, steam does stream both standard film and VR content - just not much of it. (So steam is already steam for TV/Films in theory)

For example: https://store.steampowered.com/app/468060/PADAK/


Steam briefly had a content deal with Lionsgate, but the partnership didn't work out (very few sales) and they abandoned the idea of selling TV/Films soon after the partnership collapsed. They didn't seem able to get interest from any other studio in that time, either. (Plus they were not able to and disinterested in supporting the industry standard Movies Anywhere mutual-DRM-unlocks-assurance system, so for at least some consumers their attempt was DOA from the start.)

Do you mean...iTunes? Or are you imagining something different?

All those also apply to subscription services, and subscription services remain significantly more popular with users.

Sometimes people on HN might have to accept they are not typical users a bit.


> All those also apply to subscription services

They quite obviously don't. Perhaps most notably availability at premier, which tends to matter a lot for TV shows if you have any desire to be part of the conversation about them.


Subscription services at least don't lie to you by disguising themselves as if they sell you dvd/bluray but in digital form, and all the process resembling that of dealing with a tangible item.

> maybe people think the prices are too high

Absurdly high. Game of Thrones costs $167 on Amazon, which is more than binge-watching it eleven times using one-month HBO subscriptions.


I don't watch GoT, but that price for an 8-season series with ~10 episodes/season (I"m guessing), is about $2/episode, which I think is pretty reasonable.

I have a box set of the old NBC sitcom Frasier. 11 seasons, 264 (!) episodes, probably $200 total. I've had it for over a decade, and it's been a great thing to have while traveling, or moving to a new home where I won't have Internet set up for a week.

I'm happy to pay a one-time fee for content I'll own forever and can watch in whatever delivery method I want, be it Plex, Kodi or ripped to my phone's SD card. Netflix, Amazon etc can pull these shows off their catalog whenever they want, and shove some unrelated show in my face when their search results don't show what I'm looking for.


How many hundreds of hours of entertainment for $167? Granted it has almost no marginal cost for the seller, but as you said, you can buy HBO for a fraction of $167 and still watch it.

People just like to complain. It has never been cheaper or easier to instantly consume media, yet there is no satisfaction (because they’re comparing it to stealing the media, which is illogical of course).

Of course, there are legitimate issues in countries that have BS licensing restrictions forcing people to use a middle man such as cable or satellite TV providers. Also, copyright terms are far too long in the US, so there are valid reasons to pirate. But price/availability in US usually aren’t it, in my opinion.


> How many hundreds of hours of entertainment for $167?

That's not relevant. The simple fact is that $167 for a season is well beyond the budget of the average person whose opinion you're considering. "Hours of entertainment" is (always) the wrong formula, by the way. Nobody needs to steal anything to enjoy hours of free entertainment doing a myriad of activities. Most TV shows simply make no effort at all to price either episodes or full seasons for a wide market.

Compare two ABC shows on Amazon Video, General Hospital and The Bachelor. General Hospital is a daily soap opera with 36 minute episodes and modest production value. The Bachelor has 2-hour episode with higher production values. A full season of The Bachelor is reasonably priced at $20. Individual episodes are $3.

Individual General Hospital episodes are also $3 each. This doesn't seem too crazy if you're talking about someone who might otherwise miss an episode because they are traveling or something. It's probably steeper than it should be, I imagine most soap fans will just read up on what they missed if they care enough rather than shelling out money to watch. But regardless, the full 241-episode season is $735.00. This is quite obviously not priced to sell as a package. No one would buy that. It is simply 241 episodes times $3.00 per episode, which is a generic Amazon price for an HD episode of anything. In fact you can buy the SD version for $15.00. It is clear that no real thought at all has gone into the pricing scheme.


> The simple fact is that $167 for a season is well beyond the budget of the average person...

That's true, but the number quoted by the previous poster doesn't match what I'm seeing right now on Amazon, where each season tends to run around $25 on Blu-ray.

> Most TV shows simply make no effort at all to price either episodes or full seasons for a wide market.

I'm not sure I agree with "most." You even cite one example of a show that's priced reasonably and one that's, well, not. The "one size fits all" model of pricing that was adopted years ago seems to be built for weekly-at-most shows, not daily ones. I do think the pricing model was too high, though. (I'd have probably tried $2 per show for HD, not $3, and given tremendous discounts, like 50% off, for season passes. But I don't know whether you can feasibly make that model work for a show like General Hospital at all.)


In discretionary entertainment goods, there is no “should be” price, other than the price a seller is willing to sell at and a buyer is willing to buy at.

If the media owner determine there is insufficient revenue and more can be had by lowering price, they can do that.

What is relevant is that it used to cost much more to get the same product, and it’s up to the buyer to determine what they want to spend to entertain themselves. There’s so many options nowadays, if GoT $/hour is too much, then choose something else.


> there is no “should be” price, other than the price a seller is willing to sell at and a buyer is willing to buy at.

That's true in most markets, but also totally irrelevant to the point. If a seller has no idea what the market will pay for something, and so just slaps on an absurdly high price because they don't actually care about this secondary (a la carte) market at all, that's almost the same as not offering the service at all. If an a la carte service is prohibitively expensive, it might as well not exist for the purposes of this discussion.


The sellers in this discussion are multinational organizations with very well educated people working with access to tons of data. I'm sure that for their own compensation's sake, they are busy figuring out how to extract as much value from their content as possible, which means figuring out how to get as many people to pay as much as they can for it.

They've offered the very show we're talking about, GoT, for $15 per month, when you want to watch, on pretty much any device you want to watch it on. Included in the $15 is pretty much the rest of their award winning content. If buyers think they can get a better deal elsewhere for their entertainment, they are welcome to patronize other businesses.


> The sellers in this discussion are multinational organizations with very well educated people working with access to tons of data.

And also likely with layers of bureaucracy, internal and external politics, complex business relationships, and other avenues for dysfunction.

> They've offered the very show we're talking about, GoT, for $15 per month

Sorry I'm not trying to be offensive here but you are losing track of the discussion. My entire argument is that many distribution companies evidently do not care enough about offering a la carte consumption alternative to make the effort to price it reasonably, although the situation is improving as companies get their act together and actually decide to act on the market data they have. (Game of Thrones for example is now $25-$30 per season on Amazon Streaming).

As such, the fact that anything might be available for a subscription at a reasonable market price is not relevant.


> It has never been cheaper or easier

That's exactly the thing though. It has been easier. We all remember it being easier, when we pirated something.

The actual sentence should be "it has never been easier while also getting to pay for it". That's just not a very compelling case.


I think I'm with allstairSH here, sorry; I just didn't find piracy to be easier than paying for content. Your "all you need is a web browser" case is fine as long as there's something you can browse to that has the content you want -- and as long as the use case is something like what you want, which I think you said was watching stuff in a web browser on a low-end Unix laptop. My use case is very often watching on a 4K television in my living room. And, frankly, I'm not sure what piracy method is easier even in the only-web-browsing case for me compared to "browse to streaming site with desired content."

I'm sure their approach is either for a lot of people. But it is a huge burden for me. And if they just gave me access to the files and maybe an api, it would work for both of us, instead of just for you.

Is pirating something really easier? Maybe I've been out of that game for too long, but between finding good/complete torrents of content, avoiding my ISP finding out I was doing it (and sending me nastygrams), needing to keep a server up and running to download/store media, juggling front-ends as they evolved (Plex hasn't always been around), ...

Today, I have a single device (AppleTV), a single remote, and can stream just about anything I want. And that content is either bundled with Netflix or Amazon, or available to rent for $5 or so. And I don't have to break the law to do it.


Here in Germany, Torrenting legally is distribution, so I don't do it. But find yourself a decent streaming link aggregator, install an adblocker and you are golden. Anything with a webbrowser can play it. No major legal streaming platform can claim this.

Also, you are comparing effort it takes to set-up something, with effort it takes to use it, which I'd argue isn't entirely fair.


Setting up my Apple TV took 5 minutes. Plug in the power, set up the wifi, and add a few apps. Much easier than buying a HTPC + NAS + finding the best software to install.

Using is as easy as a smart-phone. Click the search app, find content, hit play. Everything auto-updates, so there's no maintenance. VS a HTPC + NAS which take (slightly) more care+feeing to keep current on software versions.


I feel like you are being dense on purpose here. I talk about anything with a webbrowser and you argue about the complication of htpc and nas.

Also, you are comparing effort it takes to set-up something, with effort it takes to use it, which I'd argue isn't entirely fair.

I thought you were talking about setting up some sort of torrenting/media server system with this part of your comment.

I agree, using a browser is easy enough. But, why would I when the AppleTV is already connected to my TV and I can do everything with a simple remote and voice commands?


Then don't if it's easier for you. My usecase is I want to watch things on a reltively low powered Linux laptop. They have nothing for me.

Pirating is easier in the same way an FTP server is easier than Dropbox.

It’s easier to walk out with groceries than stand in line and pay for them also.

There is no purpose to comparing pirating with legal means.


Try walking out with your groceries sometime and tell me again it's easier.

> This is what we all want price-wise, but would we really, truly want to turn Netflix into the equivalent of the iOS App Store for essentially all legal streaming movies and television?

You mean like the music industry has Spotify, Google Music, Deezer, Tidal, Apple Music and many many more, and everyone has a 99% full catalog?

You better motherfucking believe it.

This is the only thing people want in the ultra laggard video-streaming market.


Of the services you listed, to the best my knowledge, exactly zero of them are profitable yet. Tidal is eternally on the brink of bankruptcy. Deezer's situation has been so bleak they pulled their IPO a few years ago. Google Music and Apple Music are essentially loss leaders being subsidized by their owners. Spotify has always burned through money like it was going out of style. And artists are eternally complaining -- with cause -- that nearly all of them make less money under this system than they did under the old one.

You know what Spotify thinks is the way forward for them? Exclusives. That's why they've spent hundreds of millions of dollars on podcasts. You may love it if they're functionally undifferentiated from their competitors, but they don't. Apple and Google can slide because they're Apple and Google, but services that actually need to pay their own way need to give you a reason to pay them, not Apple or Google.

So, sure. Consumers love "pay $10 a month to whoever you want, eh, it's all the same, tomato, tomahto." But it's not at all clear to me that it's a sustainable model in the long run. And I'm pretty sure the reason the video streaming world didn't even pretend to take a stab at that business model is they don't think it is, either.


There's only so many hours in a day that can be spent on streaming. I think I have something streaming for about four hours a day (I usually work or so something else at the same time) and so far Netflix's offering has been good enough that I don't have any additional subscribes.

If I want to watch something else, those hours are away from my Netflix usage and I get less for my money in those cases. I don't think that a large offering is what should raise the price, rather the hours I spend watching. If I only watch an hour a day Netflix and Hulu for 3, I think the 10USD or so should be split into 25/75 between those providers.

Splice kinda has a pricing model for their samples and presets that could be applied here. A fixed monthly cost will give me credits with which I can purchase what I want and leftovers from that month gets rolled into the next month. If I could pay 10 dollars and get 10 hours of any content on any provider, I'd buy it. I'd most likely end up paying more each month but at least I wouldn't feel like wasting my money paying a fee for content I'm not gonna watch and feeling like needing to have multiple subscriptions rolling all the time.


A la carte TV/Movies have existed for longer than Netflix has been streaming. Google Play, Apple TV, Sony PlayStation store and Microsoft Xbox store all sell seasons and/or episodes and/or full movies. And you can often rent movies for cheaper.

Overall, consumers preferred the subscriptions. They’re a better deal if you watch more than 5-10 hours a month.

Though there are some things you can only purchase a la carte.


It costs more to buy four episodes of a single show than an entire month of a typical streaming service. That is not the "let me pick my channels" service that people often ask for.

It is, because a la carte is always significantly more expensive. It results in higher transaction cost overhead, more risk, more cash flow volatility etc.

A la carte is significantly more expensive in literally every industry, globally, for a reason.


Human behavior does not (and should not) care about the cost structure. As binge watching is popular, having digital content priced over 15$ (or whatever the monthly price of the streaming service that also hosts the content) limits the sales to an incredibly niche audience.

Incredibly niche is an exaggeration. People will spend the dough to watch what they want to watch. The vast majority of movies aren’t on Netflix!

> a la carte is always significantly more expensive

True, but clearly not the case with most TV shows. It's not an a la carte premium. It's either targeting a niche market like collectors, or there's just no attempt to set a market price whatsoever as the example here demonstrates: https://news.ycombinator.com/item?id=21682892


An a la carte premium doesn't explain why it's more expensive to buy a single show than the bundle it comes in.

There's also a big psychological difference between deciding just the once to start a subscription, and having to constantly decide if you want to pay to watch a particular series. Even if the prices worked out similar, I think people would be less likely to watch if they had to decide to spend 50c (or whatever) each time they watched an episode.

> But if I watch one Netflix show, I can't just subscribe to that show, I must pay for a ton of stuff I'm not remotely interested in.

When I want a song, I've always just bought it. I still do. I can do basically anything with the file other than redistribute it. I can even play music while offline! I only use streaming services like Spotify and YouTube for songs I don't regularly play.

I'm very frustrated I don't have the same option for movies and TV. Sure, I can buy the physical media, but there's all sorts of legal shinanigans when it comes to ripping blurays and such. My ideal solution isn't one big streaming service that has everything. I want an "iTunes for movies".


There... is an iTunes for movies. I mean, I own hundreds of iTunes movies, some of which I purchased 13 years ago. Microsoft, Google, and Sony all have equivalents.

You're not owning them. You own a license to watch on Apple's terms and as long as iTunes is around. Microsoft shut down the drm servers and killed their clients' ebooks in April:

https://news.ycombinator.com/item?id=20318852


That’s not strictly true. If the movie you purchased was from one of the five major studios that support Movies Anywhere, you can link your Amazon Prime, Google, iTunes, or Vudu account (along with others) and any movie purchased on one can be transferred to the other services.

https://moviesanywhere.com/welcome


And if I want a DRM free copy so that I don’t have to ever keep track of this landscape of shifting alliances? This is way more mental overhead than I want to devote to movies.

qbittorrent has a built in search function that works great for me. Fire up a vpn and dump the file in my jellyfish indexed folders and away we go.

You’ve never been able to buy commercial video without copy protection. Even in the VHS days you had Macrovision.

Not true. Perhaps you meant to say that copy protection has existed for a long time. But plenty of commercial video has been available without copy protection.

if you are referring to mainstream commercial movies by the major studios, Macrovision was introduced in 1984 for VHS tapes. DVDs from mainstream studios also had DRM.

What commercial video from the major studios have not had copy protection?


I'd have to go to my fathers house to find the stack of VHS tapes that were duplicated from rentals. Meanwhile I have my own modest stack of DVDs that I copied in the 2000s using whatever generic DVD ripper was available for windows at the time. I recall once or twice being unable to rip a DVD for copy protection reasons but it was rare.

Either there was no copy protection, or the copy protection was so trivial to circumvent that I never even knew it was there.


Generic DVD rippers used DeCSS to remove DRM. There were also plenty of devices that could remove MacroVision while you were copying.

I never said that the copy protection schemes weren’t easily circumvented. I said that commercial video has always had copy protection.


So, a point irrelevant to any part of the actual discussion.

I said.

You’ve never been able to buy commercial video without copy protection. Even in the VHS days you had Macrovision.

That statement is factually correct.

The reply:

Not true. Perhaps you meant to say that copy protection has existed for a long time. But plenty of commercial video has been available without copy protection.

Which is factually incorrect.

The reply:

I copied in the 2000s using whatever generic DVD ripper was available for windows at the time. I recall once or twice being unable to rip a DVD for copy protection reasons but it was rare.

Since even the oldest Windows dvd copy programs like DVDRipper could crack DRM doesn’t prove anything...

Are you now saying that being factually correct is “irrelevant”?

But using programs and devices that removed copy protection somehow proves that it didn’t exist?


It's definitely factually incorrect that all VHS tapes had macrovision. I know we did not have any kind of stablilizer or special copy machinery used to duplicate VHS tapes.

Only that I'm not part of the target audience: "Open to U.S. residents 13+". Looks interesting though never heard of it before. Some questions: How often can a movie be transferred, will it retain all audio streams, subtitle options and the quality that I bought? What if it's not available on any other platform or Disney (the parent company) decides to shut it down?

It’s not transferred. Once your accounts are linked, any movie that you purchase or redeem from one of the participating studios automatically shows up in all of your libraries as purchased.

Since it is only available in the US, I would suspect that it would be centered around US releases.

Even if Disney later shuts down Movies Anywhere, you’ve already “purchased” the movie according to Amazon/Apple/Google, etc. You can disconnect from Movies Anywhere once you sync the titles between services.


Technically we don’t own the content on DVDs and Blu-Rays either, we get a license. So long as those old players keep working....

Microsoft gave their customers a full refund, what's the problem?

As a purely practical matter: maybe your ebook reader only supports the format that was discontinued; maybe the ebook has gone out of print or has a change you don't like; or maybe you brought it when there was a big discount and to re-purchase elsewhere will cost you more.

As a broader matter of principle, it proves your property rights over a DRMed ebook are weak compared to a regular physical book; if you had a physical book, the seller couldn't barge into your home and remove it, refund or no.


> I want an "iTunes for movies".

You... know that iTunes sells movies, right?


This is probaby not what he meant, movies on iTunes, Google movies, etc all have DRM while music doesn't. He just wants to "do basically anything with the file other than redistribute it."

That's fair, although with the current state of things it's a tougher ask. Even so, the iTunes for movies is, arguably, iTunes -- or Amazon's equivalent. (I do wonder whether DRM-free videos would have followed in the same way DRM-free music did if that market had taken off and streaming hadn't; at this point there's probably little commercial motivation to studios to make that change, as they'll just say "instead of buying that, subscribe to [insert video service here].")

I can only speak for myself. But I, and I believe many others, actually prefer a subscription. To be fair. I probably watch more content than the average person. So for me it‘s absolutely worth it. I know and used pretty much every modern pirating technique known to man. While you can get incredibly sophisticated with automation and ease of use. It‘s still not as easy or convenient as Netflix for example.

Also, no Dolby Vision in piracy atm.

Obviously cost is a factor. But more important for me is ease of access and best possible quality. Let‘s take Disney+. In my market it‘s not available yet. I will absolutely pirate The Mandalorian. The fact that it would surprise anyone that it would be a heavily pirated show is laughable. It‘s 2019 and you expect people to wait on a show that‘s available elsewhere? I would pay for it. But they won‘t let me. Their fault for not launching globally .


There is no reason for an 'a la carte' system to be cheaper. Actually transmitting channels is basically free.

So, assuming there is 250 channels, and everyone watches 5, but a different 5, it costs the same to let everyone watch all 250, or exactly 5 of them.


um, Youtube does this. you can buy movies/series for a one time viewing. If you don't watch too many it works out pretty cheap

The complaint about bundling has the implicit assumption that if you'd pay for only 5 out of those 250 it would be a lot cheaper, but that's not really true. Cost of providing those 245 channels is basically zero, so there are no savings they could pass on.

Anyway with these streaming services, it's not so much that people want to pay for a bundle. It's more that micromanaging a lot of subscriptions is a chore. If they could all be integrated in a smooth manner ui-wise, but still paid separately, then people would be happy I think.

Like imagine if adding Disney+ was just a manner of clicking a button that made money flow and content available in the app you were already using.


The days of online services having an API and interoperating are largely over in a post-Cambridge Analytica world. No company wants another potentially shady company getting between them and the customer and ruining their reputation or misusing their data.

Most of the streaming services (excluding Netflix) work with the Apple TV app. It is possible. Also on iOS/tvOS devices, you can sign in with your cable provider (or OTT provider) once and the apps that require a login all work with it.

Exactly, my cable provider here in Europe has an option of absolutely custom bundle you can pick whatever you want, but each channel then has its true cost. Popular channels can be extra 2-3 EUR/mo and others 0.50 EUR/mo it will be more expensive to pick 5-6 popular channels than take couple of 2.99 bundles with fodder channels you will never watch.

Comcast's X1 box will do this. It shows me stuff on Netflix, Prime, and their own streaming system. I can also setup recordings if it's airing anytime soon. Too bad they don't support more systems, like Hulu or Disney+.

I don't think we have, I think the problem has gotten worse.

Let me try to make an example. Let's say there's one popular streaming platform, that is $5/mo. They mostly just aggregate and license content. Later on, content owners want to skip the middleman so they start making their own streaming services. So now you have 3 streaming services, which are each $5/mo.

So you are now paying 3x as much. But you don't watch 3x as much. You pay 3x as much for the privilege of being able to watch a wider variety of things. This is actually pretty similar to the problem of cable, just split in a completely different way. You still can't get the stuff you want 'a la carte,' but now you have to pay three different entities anyways.

Of course content owners will end up making out well because they make money whether on an aggregator or on their own platform, and because people now pay much more per month on average.


I think people preferred Netflix being the only game in town simply because then if it wasn’t on Netflix you could mostly discard it, not that there wasn’t great content not on Netflix. It’s the tomato sauce choice fallacy - many people will be quite happy just having one, as compared to having 50 because then you can’t be happy with your choice because you’ll be wondering about the other ones.

In the end - just pick a tomato sauce and try not to think about it too hard. If you don’t like it, pick a different one next time.


> It’s the tomato sauce choice fallacy

I strongly disagree with this.

Netflix previously had much more diverse content. It's currently (as of the last few years) banking on that their own content will substitute the licensed content disappearing on their platform. That The Witcher will satiate your Game of Thrones itch, that "superhero show #1" will be good enough over whatever Disney/Marvel puts on Disney+.

This might work for a few people, but I believe/hope it won't work for most. Chatting about the latest episode of Twin Peaks or the new Nolan movie by the water cooler doesn't work with a pale substitute.

The entire premise of the linked article is based on that cable packages survived and thrived as more players entered the market, and so should streaming services. What it ignores is that "alternative sources"/piracy didn't exist at the time, and does now. People will pay for as many services as they're comfortable with and with as much hassle as they can handle switching apps, and no more.

They should take a hint from music streaming platforms, and let the services compete, and spread the content over all of them, otherwise they will face the reality that people will pirate their service while paying for others.

Sorry for the long rant

Signed

/ Multiple service subscriber


Netflix had a simple model, sell videos. Many of these other services are selling you to advertisers. Streaming is awful when it includes ads.

The problem with cable was that it had channels and scheduled airing (and ads). We're in era of video on demand - I want to watch what I want, when I want. The problem is, paying for N shows individually is much, much more expensive than subscribing to a streaming service. So people subscribe - and get inferior UX.

Incidentally, after you paid for cable TV had better UX than streaming services today. You had one universal interface - your TV and its remote - and the UI was decoupled from channels and movie producers.

There is a sweet spot users want: one subscription and one UI, and for the two to be decoupled from each other.


There are only so many $10-15/month services one can sign up for before you’re paying just as much as you would for cable, but now the UX is splintered and shit.

That is what products like Roku is for.

There's two key differences between the cable situation and the streaming situation. First, under cable, theoretically the subscriptions would all go through one provider. That's how direcTV worked (15-20 years ago, not sure if it still does), and it was a pretty cool model. Having to maintain subscriptions with a dozen streaming providers is a nightmare vs one. Amazon's channels system is more akin to it, where I can choose to pay a little extra for Shudder if I want horror content.

Second, cable channels had a genre. If you like food, you might want food network. If you like music, you might want VH1 and the MTV's. If you're into cartoons, there's Cartoon Network and Nickelodeon and Disney Channel. Bravo has lifestyle stuff, Lifetime is "womens content", G4 was tech stuff, Weather Channel is weather, etc. With the streaming choices...they all serve all kinds of stuff, so picking and choosing makes way less sense. Instead of picking interests, you're picking brand loyalties, and that sucks.


I just don't understand why video content can't be the same as music.

Content providers licence their content to all the streaming services, they all have the same catalog, and customer pick once based on the UI, pricing, service. etc.


> I'm just as guilty as everyone else, I don't have a good answer...

BitTorrent and VLC.


IMO the disconnect starts with the producers. They believe their content to be worth X, but most consumers are only willing to pay X/2

Especially because torrenting was once slow and painful, so Netflix and co compared very favourably. Now, torrenting is fast and chances are you've watched almost anything worth watching on Netflix already.

Paying for a few of them might appeal to people who've historically paid for cable (or Foxtel/etc in Australia), but it's a noticeable cost otherwise. We currently subscribe to Netflix and Stan, but have dropped Stan in the past and may again.


I happily pay for Netflix, but actually I travel a lot and don't always have Wifi, so I like to download the movies.

My problem with Netflix is that its download function is very unstable, so actually I'm thinking of going back to torrenting just because there's no payed option for watching movies offline easily.


Here in Spain, HBO doesn't even have the option to download for offline watching.

> Especially because torrenting was once slow and painful, so Netflix and co compared very favourably.

Maybe in Australia... but here torrenting has never been slow and wasn't particularly inconvenient when Netflix first came out.


Will take your word for it. I'd guess that in the past here, you'd wait a day or so for a torrent to finish. Now I'd guess they take minutes.

Yup, I got rid of Netflix because they often didn't have what I wanted to watch, and only have Amazon Prime Video because I don't pay any extra for it with my Prime subscriptions. Not to mention that not every streaming service is available in Canada. If I have to worry about where to find the show I want to watch or whether it is available in my country, then I may as well just go straight to a source that I know will have it.

> because I don’t pay any extra for it with my Prime subscription.

I see their advertising is effective. The price of Prime was even increased recently to help fund video production.


Amazon Prime price is still $79CAD as it has been since I signed up and I definitely get my money's worth. I actually didn't even realize it came with Prime Video when I signed up. Additionally, I make use of Amazon Photos unlimited backup for ~250GB of the raw files from my camera, any other cloud backup service would cost a similar amount every year.

I'm still a member, at least for now, but have been through two price increases: first from USD $79/yr to $99, and again recently from $99 to $119. I'm glad it works for you, but I doubt I'll renew this year due to the increased price, the horrible ways Amazon treats its employees, and the way the Amazon marketplace itself has become a wasteland of counterfeit products.

[] Not even talking about the warehouses, but literally every SWE friend of mine who has worked for them has a horror story.


Advertising or not, you can't get Prime without VoD, so if GP likes the deal just for shipping, or for shipping and music, then fine.

Personally I have it mainly for shipping, and get good value out of that (especially since here it's next day by default, some items same day), and stream occasionally.


I meant advertising in the sense that GP now thinks of Prime Video as a $0 extra and not Prime as a bucket that contains all these things and is priced accordingly. In reality all Prime customers are paying for Prime Video even if they don’t use it.

> and only have Amazon Prime Video because I don't pay any extra for it with my Prime subscriptions

While I pay extra all the time on my Prime subscription for all the stuff I don't use but Amazon bundled in anyways.


I remember Prime costing $20 per year. Then Prime Video was introduced and the price went up and up. I canceled.

I think it depends on the distribution of content amongst the services. If it's a Pareto distribution where the top few services own the majority of the content, then I think people will pay for the top services. On the other hand, if the good content is highly fragmented amongst dozens of services, then the torrents will win.

It also depends on the business models. Right now, Netflix is "all or nothing" e.g. you can't pay 50 cents a month for a grab-bag of the content you want; you pay the full monthly subscription for all of the content. If every service was like this, and the content was highly fragmented, I don't see why people would overpay for content they don't even want.


The mistake you’re making is thinking there is a such a thing as “50 cents a month” of content. HBO was never going to sell you Game of Thrones for 50 cents. Netflix was never going to sell you House of Cards for 50 cents. They are selling you [your favorite show] for $10 and throwing in the rest of the catalog. Digital content has zero marginal cost. That means that a provider would rather sell you every show in their catalog for $11 then just the one show you want for $10. Turns out most consumers prefer that option too. If they don’t, they can still buy the individual unbundled seasons.

> Digital content has zero marginal cost.

In Netflix’s case, I’m not sure this is true. I’ve heard that some of the content is paid based at least partly on usage.


That has never been true. Just take a look at all of their announced content deals.

The obvious solution seems like some kind of service which tracks all of the shows you watch and are interested in, and changes what service you subscribe to every month.

If there is a new season/show coming out on one service that you are interested in your next subscription will be that service, otherwise it is some kind of random/RR and you get a notification of which app to use this month.

All the shows are available to watch when you want, why bother to have all the subs always?


Because the argument for streaming services is _convenience_. And that's especially true when we're comparing them to piracy.

Having to switch streaming apps/programs every month is not convenient.

Having to wait up to a month to change services if I learn about a new show I like is not convenient.

Having to pay for multiple streaming services if I happen to like content by multiple producers is not convenient (or cheap).

The streaming industry honestly seems like a "prisoner's dilemma" like scenario. Each streaming company (presumably) benefits over their competitors by having exclusives and limiting where certain shows can be watched. But the streaming market as a whole is held back by this.


It also depends on whether content quality/quantity develops to where 1-2 services can satisfy someone by providing closely tailored content. Right now, a few streaming services can provide more than a person has time for, but only if they watch somewhat indiscriminately. This could satisfaction could be achieved with a power law distribution or perhaps a 3-4x increase in spending per service if the market grows sufficiently.

I feel like this story has played out before but with a slightly different technology set...

The issue is there is very little good content out there. Cable before video games and the internet could charge a huge premium, but spread things out and you end up with a ‘History’ channel showing cheap ‘Ancient Aliens’ crap.

Similarly, break modern content among 5+ services and the content will be worse and simply not worth paying for. Just look a Hulu which has been free on PC and they still can’t compete with Netflix.

In the end my retired 70+ year old mother has Netflix, Amazon prime, and a premium Cable subscription, yet mostly just watches YouTube videos. For people with less free time and less disposable income their not going to maintain a subscription unless their watching something every month.


Hulu is only available in the US. It has 28 million subscribers compared to 60 million US Netflix subscribers.

Hulu is also not racking up a ton of debt trying to stay relevant like Netflix is.


It is not a zero sum game, because when there are enough of them I can't be assed anymore and I will simply torrent the content instead.

The same way you usually never paid for single networks when you bought cable stuff but just bought a bundle with a whole bunch of them.


It might not be a zero sum game for them, but it definetely is a zero-sum game for me. When I want to watch something, I just want to click it and watch it. This is the API that my torrent tracker gives me for free (Airplay to Apple TV works great for this).

I'm willing to pay for a service that I use a lot and gives me an API that's at least as good as this. But it doesn't make any sense for me to pay for 5 services that combined give me a much worse API. Having to use 5 crappy apps typing in 5 crappy search boxes until I find what I want to watch is quite frustrating.

We started 2019 with Amazon Prime and Netflix, but when Netflix dropped support for streaming from iOS to Apple TV using Airplay, we dropped it (having to use the Netflix Apple TV App was worse than using torrents). Last month, we noticed that most of our torrent streaming is HBO content, and we subscribed to HBO instead. We've been torrenting The Mandalorian from Disney+ recently, but right now that's not remotely close to enough to make us actually want to subscribe to Disney+.

Who ever thinks that requiring people to subscribe to more services is going to actually make them do that, when there is a hassle free, simple, reliable, and cost-free alternative, is delusional.


I'm still baffled by the reasoning that leads to all the DRM theater. It does nothing. the moment a piece of content reaches streaming apps, it's on every torrent and free streaming platform.[1]

All it does is that it makes the user experience of paying customers worse. Can't use their preferred video player. Can't use a frontend that puts all the content together. Can't save it for later to watch online, unless the platform has that functionality built in, usually in a restrictive and clunky way.

[1] I'm, of course, talking about platforms that aren't as aggressive about getting rid of copyrighted content as youtube.


It really is just security theater so they can shrug & say "we did the thing" if (when) it gets pirated. Modern game DRM/anti-tamper like Denuvo (as horrible as it is) at least has a realistic goal of "delay piracy past the release week".

At least in Netflix's case, some of it makes sense because of how much work they put in to their website. Almost everything on their homepage is personalized based on what they think will get you to watch that movie/show. From the pictures, summary description, and video preview, that's all customized to get you to watch more.

They show you what they want you to watch, which is mostly netflix produced content that minimizes the per view overhead for them.

Wouldn't they make more money by you watching less? Also, there is no reason they couldn't have a decent website, just because they also didn't have DRM.

Maybe the approach is the more people watch, the more they talk about the (Netflix exclusive) shows with others who don't have Netflix and they hopefully buy in?

FWIW, the Google Play Movies (yes, the app on Android) provide an aggregated search based on the service you subscribed to. You can simply filter free TV/movie to see what's available to you, so you don't need to deal with 5 apps if you have 5 services.

Good to know. Sadly, Apple TV doesn't have this yet.

Yeah, I've got subscriptions to multiple services now (Amazon, Disney, Netflix, and I have a satellite TV subscription too). I used to run a very slick seedbox that would auto download all the stuff I wanted and then stream it with Plex, I had accounts with all the top private trackers.

It's getting to the point now where I'm sick of paying so much money and the idea of that seedbox is far more appealing. It's not just the money, it's having to dart about several different applications and remotes to try and find what you want to watch, drives me mad.

I wanted to stream The Force Awakens the other day, I couldn't find it any where.


AppleTV (the device, not the service) does a decent job of searching across streaming services with a single remote.

Currently, I use Amazon Prime Video, Netflix, and periodically subscribe to HBO Now for a month or two to catch up (then cancel for 10 months).

Edit: As noted below, The Force Awakens is on Disney+ now. You can rent it on iTunes.


If Apple (or anyone for that matter) could managed to search through a larger variety of subs, that would be incredible. That's what this streaming market needs.

Here's a list of services Apple TV's Universal Search knows about (pretty sure it also searches Amazon Video, which isn't listed here, and I haven't found an official list)...

https://www.lifewire.com/what-channels-support-universal-sea...


Disney+ isn't in the market where I live. It's called Disney Life and it's utter crap.

That's one problem I wish the content companies (production and distribution) would fix. I hate having most streaming options in the US, but having different options when I travel. Weird things like books I bought for Kindle won't download in the UK because they were purchased in the US store. So annoying.

We have lawyers and industry execs to thank for that. They want to squeeze every less penny out of their content across the globe forever. It's ridiculous.

The Force Awakens is on Disney+, for what it’s worth. All of Disney’s released content is either on D+ or running out a contract on Netflix.

Disney+ doesn't launch until next year in my market. We are stuck with Disney Life which is utter crap.

I currently subscribe to all three of these and Amazon Prime, and it's less than 1/6 of what I paid for directTV before cutting the cord 9 years ago, and I don't even always keep my subscriptions active all year.

I like this way better, and there can be lots of winners. No way one streaming service can provide and create everything. Plus that's not good either, choice is better.


The problem is that you're not comparing like for like. All these services are in growth phase now, they're pricing their services to compete. The problem is that once they've all topped out and growth isn't happening anymore the way they'll continue revenue growth is by slowly increasing the cost per customer. So yeah, right now it's cheaper, but in 10 years time you're going to be exactly back where we were. Right now you're benefitting from a bunch of venture capital, but don't think that the position you're in right now is going to last.

Woman I know cycles her subscriptions, consumes what she has on backlog and then just moves onto the next.

It seems to work for her, although I don't think I'd be comfortable doing that because I would miss out on pop-culture references.

(I mean, one only has to look at imgur.com for a few minutes to notice a lot of Mandalorian memes, the cynic in me even considers that this might be due to Disney shilling that content)


The vast amount of Mandalorian memes seems to directly reflect Disney was correct to return to a weekly release schedule and away from the Netflix model of binge watching. Netflix shows often generate memes for a weekend or a week if Netflix is lucky, then dissipate quickly. With new Mandalorian episode each week, social media has been inundated with weekly fresh memes like clockwork.

It could also just be a Star Wars effect and that this is the first Star Wars TV series of any kind so that's also going to balance in its favor, or that it struck a nerve.

Ironically, Disney's lawyers actually tried to shut down some of the memes with DMCA takedowns in an instinctive bit of trying to control their copyrights. I'm not sure Disney quite expected the social media firestorm they created with The Mandalorian either.


> I would miss out on pop-culture references.

What's wrong with that ?


If Disney were going to shill Star Wars memes they wouldn't be about a character where they didn't make any merchandise in time for Christmas.


Streaming wars are called wars because newcomers are willing to burn money for market share. Next few years Disney streaming operations are expected to make $5B loss every year. They are still profitable because they make money from everything else, including cable.

This is problem for Netflix. Competitors have other sources of revenue aside from streaming services, Netflix has just streaming.

Netflix hasn't had positive free cash flow since 2011. As their most popular series are leaving for competition and and the quality of original content is suffering because they are in panic mode to create more original content.


You could argue this puts Netflix in a great position. Netflix is going to live or die on streaming. For the other companies, streaming is another line on a P&L doc.

Not sure how potentially dying is a good position to be in

> Competitors have other sources of revenue aside from streaming services, Netflix has just streaming.

Netflix have been doing cinema releases of their titles ahead of their streaming debut. Surely that's other revenue?


> Netflix have been doing cinema releases of their titles ahead of their streaming debut. Surely that's other revenue?

That's for awards qualification purposes. It brings in rounding errors, and almost certainly operates at a significant loss.


Not because they want to. Netflix refused to give full 12-week exclusive what the main movie chains (AMC and Regal) require. It will be limited release.

As I understand it, Netflix does cinema releases because it's required for Oscar nominations (at least seven days in a theater) and many creative partners like–like Scorsese and Baumbach–want their films into theaters.


> Does the fact that there were four broadcast networks mean that one of them eventually prevailed, and the others disappeared? No. Was there a cable channel war resulting in one dominant cable network? No.

I get all 4 broadcast networks for free over the air. Cable channels are infamously bundled so if I get one, I have to get dozens, and it's essentially impossible for channels to fail in the market. These comparisons aren't like competing streaming services at all.

If you look at the actual cable service providers, there are very few. They're definitely prone to monopolies. Comcast (#1) would have bought Time Warner (#2) a couple years ago if the government (and everybody else) wanted to block it.


> if I get one, I have to get dozens, and it's essentially impossible for channels to fail in the market

Totally untrue! Cable companies have to pay a rate to get a channel. Most channels don’t fail, their viewership drops and then they turn into cheap syndication products and mostly use ad money. ESPN is like $15 of your cable bill, and OXY is like $.05. If they didn’t have enough viewers to break even on content costs and broadcast costs off of ad money, they would stop broadcasting.


Fair point. But I still don't think it's worthwhile to equate "one cable channel (like OXY)" to "one streaming service (like Netflix)".

Of course it is not zero-sum game. Everyone will lose at the same time.

No mention of piracy and torrents in the article. That is the "seventh player" which will win along with cheap VPN services.


How about: if you release on a publicly accessible channel (ie streaming service) then copyright law is amended to say you have to release to any service that requests it (after say one year) or you lose your copyright.

How would that not serve the public interest?

Public gets access. Copyright owners get paid. Middlemen can't fuck it all up (so easily, I'm sure they'd find a way).


It's pretty simple. Exclusives are bad for the user, period.

Exclusives might still work, if the store that's offering them is selling something. I.e. you can buy something exclusive, and while it's annoying that you are forced to use only specific store for it, at least you pay just for what you bought.

Exclusivity isn't compatible with renting, or it least it won't scale. How many renting services will users be paying for? I bet not many. So let them start selling video, and preferably without any exclusivity.


Solution: Sign up to an aggregator service that's say $15 / month and you can watch any streaming service. When the month is up your $15 is distributed between providers depending on how much you watched each of them.

Nice solution for users, one that will immediately be denied by all providers.

Why take your share of $15 /month if you can easily coerce the vast majority of consumers to pay the full $15 for your service by releasing the next season of <insert popular show here>.

All it took for the masses to immediately flood Disney+ was owning Star Wars and Marvel.

I subscribed to HBO because of Game of Thrones back in the day, I have Prime anyways and share Netflix with 3 other people.

I want what you described but nobody is going to let this happen if consumers who are too tech-illiterate to pirate will pay up anyways.


Calling it a war is a great strategy. It implies that one company will be left standing. I think we can all agree with the article, there won't be one person left standing.

But it's war! You have to choose a side. Are you Mac or PC? Are you iPhone or Android? Are you Netflix or Hulu? This strategy, although I don't think it was concocted by a secret group, is great at creating loyal customers. Some will cheat of course and will swing left and right, but in the end, companies make money.


We are dropping Disney+ minutes after the last episode of the Maldorian finishes it's screening at our house. Unless they release something immediately thereafter. We split Netflix with my best friend and my wife and I split Amazon prime/hbo. As soon as last week tonight wraps up we're cancelling hbo too. We briefly had Hulu while the wife was binging on handmaid's tale but have since cancelled. Not keeping these services on 52 weeks a year

In this scenario, the modern viewer pays slightly more per month, and yet still can't watch Star Trek: Discovery, because the list doesn't include CBS All Access. And first the modern viewer must have internet service. And instead of a single interface, it's usually a variety of different interfaces, with some guesswork about which show is in which one.

The big players will likely all survive, yes, but some of the smaller ones are likely to end up also-rans. Thanks to IP exclusives, we'll end up with 3-4 players in the market, for sure. Better? Worse? I dunno. Different, for sure.


They are so cheap that I am just subscribed to everything. I know I’m fortunate to be able to afford that but compared to what Americans are spending on everything else it’s surely not a lot for the value you get. Still cheaper than I used to pay for cable ($100)

I have never paid for cable in my life. The youngest generation hasn’t. Comparing subscription services to cable won’t work for the newest customers because they aren’t use to cable.

> Comparing subscription services to cable won’t work for the newest customers because they aren’t use to cable

Most Americans have cable. It's often inextricably linked with internet access. The newest customers, in both rural and urban, are definitely used to it.


As a young American, this is probably true for older generations, but I can't see this remaining true for very long. I make sure to get internet only packages from Comcast, since I have absolutely no desire or need for cable.

Americans may have cable, but to what extent? It is cheaper for me to get Internet with basic cable—over-the-air channels—than without. My cable boxes have sat in a closet for the past six years. I stream most content I watch.

That’s mainly because you’re comparing to the insane prices Americans pay for cable. For me, the basic HD package (over fiber) is €15,95 and if I want the full ‘entertainment’ HD package that’s €21,95.

Exactly. I hate this fragmentation but it's still cheap enough that I can't be too pissed. Even if you have 4 video streaming services (Netflix Prime HBO Disney) and 2 music ones (Spotify and Youtube Red) and assuming you split them all with another family, it's only a monthly total of about 45-50 dollars. That's like a decent dinner for two in the Bay Area or one movie outing, for example. We spend so readily on mediocre brick and mortar experiences while nickel-and-diming on things that provide so much convenience and value.

>assuming you split them all with another family

I'm surprised the t+c's allow you to do that


They don't, but nobody is really trying to enforce it yet. In a few years when these services face a lot more pressure to turn a profit (after the "wars") we will probably see a lot more of that.

Well, yes and no. Nowadays it's possible to serve all niches and the mainstream market together at the same time, through the same general service offering, simply by filtering and sorting the content according to user data.

Therefore I would assume that we can't fully apply the traditional media experience to the current streaming wars.


The claim by the Comcast’s of the world has been that to get everything you previously had with cable you would need to pay a lot more, but what’s happening is that there is consolidation within the content provider side like Hulu now being part of Disney. So the total list of streaming services we might end up with is probably around 4-6, so if each one costs around $10 then that’s still way cheaper than most cable services that are still charging extra for “HD” service and stuff like that..

So next play is for somebody like Disney to buy an internet service provider or something? Otherwise comcast will start throttling all of their competitors more than they already are..


Or just buy/lobby govts to make Internet free in the sense that roads are.

Once individual consumers hit "peak data" consumable, which despite all the hoopla about phones/IoT devices everywhere streaming in 8k 24x7, has probably already happened (upper limit being the brains input bandwidth), there is no great reason for anyone to invest in ISP's esp looking forward 10-20 years. Kind of like Walmart or Amazon thinking they need to buy highways to keep their addicts supplied.


> So next play is for somebody like Disney to buy an internet service provider or something?

AT&T owns cell-phones, ISPs, HBO+, WB, DC-universe, and more.


AT&T also is a horribly managed, bureaucratic company. They have like 8 branded streaming products besides HBO Go, Max, Plus and snow. IMO, Netflix’s high performance culture and attention to detail could be what sets them apart. If they’re not throttled by one of these providers of course.

Yea the hbo streaming situation is bonkers.. totally reeks of meeting some odd corporate goals or some BS. They need to solidify their offerings at ATT into like one service or something.. just have it be like HBO+ and call it a day.

Imagine giving a billionaire money for something being offered freely from a peer.

my response after reading the title

"but it is for consumers"


I'll do my part to make it so.

Call me pedantic, but the usage of the term "zero-sum" in this article makes no sense. They use it synonymously with "winner-take-all" which is so far from it's original meaning that you have to question whether the author even knows what zero-sum means, or if they're just using the buzzword to attract clicks.

In fact, increased competition leads to reduced profits (at least in the short term), making this a "negative-sum" game.


A zero sum game is by definition a game where one party’s loss is another’s gain. That covers “winner take all” situations, or purely competitive situations.

The article’s overall point is that more streaming services can lead to more people paying for streaming services in general, enlarging the overall revenues in the segment than would otherwise be there without the new entrants.

Most folks aren’t unsubscribing from Netflix or Hulu for Disney+. They’re spending more on streaming and less on Fortnite or iPad games, or a night at the pub. This may also accelerate the decline in cable/satellite over time, but even that will be sticky since they will find ways to stay relevant.


> In fact, increased competition leads to reduced profits (at least in the short term), making this a "negative-sum" game.

I'm not an economist but I've never heard of competition described as "negative-sum." It's zero-sum because the consumer wins.

"Negative-sum" would be a nuclear weapons manufacturer profiting off blowing up half the planet. The manufacturer might have made money, but overall everyone else loses far more than the manufacturer gained.


> It's zero-sum because the consumer wins.

That's not the traditional economic understanding of the *-sum expression either. In economics, competition forces efficiency improvements, which makes competition in cases where increased efficiency is possible positive-sum.


What's the point of efficiency improvements to a business without a consumer? They could be another business, but at the end of day a member of the public has to pay for it with taxes or post-tax dollars. Economies dont exist without consumers to consume what the producers produce.

Sure you could measure efficiency in widgets per human-hour but at the end of day, efficiency improvements do not happen in lock-step across industries so at some point you have to convert to a meaningful value dictated by consumers.


Efficiency improvements lead to an overall increase in the amount of goods produced given a fixed amount of input. The benefit devolves onto both the producer and the consumer (this is called "surplus"), each according to their elasticity of demand. That's the econ 101 model, in any case.

In the televised video market, this "efficiency" might manifest as higher quality shows, or a wider selection of shows available to watch. You only need to look back to the early days of TV to see that what we have today is much better (more entertaining, more interesting, has higher technical quality). We also have a vastly expanded selection of shows to watch. This is the result of competition. The sum is positive, because the overall utility produced has increased.

> What's the point of efficiency improvements to a business without a consumer?

I am not sure what in my comment this is referring to. To a first approximation, there are no firms without customers. At least, none that are both legal and last very long.


Thank you for the explanation, that makes more sense.

How is overall utility measured in cases of intangible goods like TV shows and movies? I think I understand what surplus means in the context of industrial/agricultural production or simple services like hair cuts or deliveries but what about media? The success of movies or TV shows can't be quantified with an objective measurement like length or CGI per square inch or Rotten Tomato points, only by the profit they generate - which seems to only get more circular and complicated with Hollywood accounting.

There are certainly more shows available to watch today, "interesting" or not, because the market for entertainment has grown massively but it seems to me they only have higher technical quality because human attention is zero sum and they've hit diminishing returns on their capital (which I don't think is all that different from most other industries).


> How is overall utility measured

In the sense of the model, it's not necessarily measured. There is an understanding that there is no such measuring tool as a "util measuring stick." Util being my made up word for a unit of utility. It is taken as a given that utils are roughly convertible to currency, or at least that people are willing to exchange a roughly consistent amount of currency for a given amount of utility. The amount of currency exchanged in a voluntary economic transaction represents both an upper bound on the seller's valuation of what they are selling and a lower bound on the buyer's valuation of what they are buying.

All of this with the appropriate vast numbers of caveats about it just being a model. It's a tool for rough prediction.

> human attention is zero sum

This is not so. You could be forced to pay attention to paint drying on a wall, or you could watch a show that moves you to tears. Both consume the same amount of attention (by which I think you mean, "time spent paying attention"), but both do not provide you so the same amount of utility. You would obviously pay more for one of those experiences than the other.


"I'm not an economist but I've never heard of competition described as "negative-sum.""

It is obvious that, if competition is strong for a cake with a given size, that costs, e.g. for advertisement, may actually decrease the profits. While the size of the cake stays the same, the market players have less profits due to increased costs. So in the end everybody has a smaller slice. If I remember correctly, this has happened in a stagnant cigarette market where one player decided to increase his share. They spend a fortune on advertisement, as did the other since they don't want to lose their share. After some years the war stopped and everybody had more or less the same share as before, while having lost a tremendous amount of money on advertisement without gaining any benefit.

This may also be a funny example: https://www.nytimes.com/2012/03/31/nyregion/in-manhattan-piz...

"It's zero-sum because the consumer wins."

A zero sum game has nothing to do with consumers in this example. It means, the cake has a given size. If you want to increase the size of your slice, you have to take something away from another player.

A non-zero sum game would be were the cake (market) is growing. Every year you have a bigger cake. Then it is possible that you can increase your slice without reducing the slice of another player.


A non-zero sum game would be were the cake (market) is growing. Every year you have a bigger cake. Then it is possible that you can increase your slice without reducing the slice of another player.j

I meant zero-sum in the context of this article. Have Disney+, Netflix, etc stopped growing their offerings and market size? Has everyone who can afford to signed up to all of them at the same time?


It may be trying to estimate something like the "real value" (difficult to measure as it's very subjective) versus cost.

In that case, the question at hand is: "Are consumers getting more real benefits per dollar spent?"

I'd argue that there's another dimension to the conversation which is granularity. Most of the streaming services don't allow purchasing a single show (except for YouTube, Amazon Prime and a few others), and for the services that do let you buy a single show it's way too expensive for a series.

If you try to buy an entire season of a single show it'll often cost you the price of 6 months of the streaming service.


That's a fair assessment, hence the quotations. My way of looking at it was from the corporations' perspective, who collectively have to spend more money innovating while having their margins squeezed. Thus in the short term, the harder everyone competes, the smaller the net profit "pie".

You're right that in the long term it benefits consumers, and possibly the surviving companies after competition has died down and they can enjoy the fruits of their innovation.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: