The Rise In Streaming Video Exclusives Could Annoy Consumers, Driving Them Back To Piracy
from the meet-the-new-boss dept
By and large, the added competition being levied upon the traditionally apathetic pay TV industry has been a good thing. Though it has taken a decade longer than it probably would have in a healthier market, the rise of streaming competitors has forced incumbent cable companies like Comcast to up their game and at least consider lowering prices, improving abysmal customer service, and offering more flexible video options.
Granted many pay TV execs seem intent on doubling down on the dumb ideas that cause cord cutting in the first place, but it's indisputable that we're finally seeing some evolution in the traditionally stubborn sector. Pay TV sector executives that believe cord cutting is a fad that magically ends once Millennials procreate are increasingly being marginalized, as are executives that believe they can milk the dying traditional TV cash cow indefinitely without repercussions.
That's not to say that the new streaming frontier isn't going to be without some pretty notable problems. Studies suggest that by 2022, nearly every broadcaster, cable channel, and their mother intend to offer a direct to consumer streaming video product. That includes Disney, which later this year will be pulling most of its most popular content from services like Netflix and Hulu (Star Wars, Marvel films, Pixar titles) and exclusively hosting them on its own, new streaming video platform.
On its surface this improved level of competition is most assuredly a good thing. But as we've noted previously there's a problem brewing here that most executives and analysts don't seem particularly keyed into. Namely, that once you've cordoned off each broadcaster and content-creator's product into countless walled silos -- each requiring their own subscription -- you've not only countered the biggest benefit of the streaming revolution (lower prices, greater flexibility), you've opened the door to customers getting frustrated and returning to piracy.
It's pretty rare that I see research firms point out this potential pitfall. For example, The Diffusion Group's study noted that while they predict every broadcaster will offer their own streaming service by 2022, this could simply increase the number of annoying retrans and carriage feuds (and the annoying blackouts and price hikes that result) between cable companies and broadcasters:
"These are early signs of an emerging media tribalism," argues Berkley. "Major networks will increasingly reserve their best titles for their own direct-to-consumer services, which will help drive total network DTC subscriptions close to 50 million by 2022."
Berkley warns, however, that DTC strategies come with great risk, especially for TV networks. "The legacy model is built upon decades of comfortable relationships between networks and operators. If networks extract too much high-value content too quickly, channel conflicts are inevitable."
Said "conflicts" could prove particularly interesting now that we're doing away with net neutrality (for, you know, "freedom" or whatever). We've already watched as companies like Viacom blocked entire broadband IP ranges from accessing content during programming disputes with cable operators. News Corp also blocked Cablevision customers during a similar feud. These bad ideas are a two-way street, and without net neutrality protections in place, there's a universe of new, creative ways cable operators and broadcasters can hamstring one another in direct competition, annoying consumers.
Less talked about by analysts is the fact that customers might find piracy a better, simpler alternative if they're forced to subscribe to thirty different services (at $8 to $20 per month, per pop) just to access the movies and TV shows they're looking for. Like CBS did with the new Star Trek: Discovery series, each player in this game wants to hide their best content behind an exclusivity paywall. But customers are already confused and frustrated by constantly shifting licensing deals impacting title availability, and may find piracy to be the simpler alternative to having to navigate an ocean of exclusivity silos.
Again, the rise of streaming competition and lower-priced, more flexible TV services is a good thing. But if many of these companies aren't careful, it wouldn't take much to shoot this progress squarely in the foot via exclusives or other anti-competitive behaviors emboldened in the wake of federal apathy on net neutrality. The end result could be progress in name only, with customers finally shaking off one bad idea (bloated, expensive bundles of over-priced channels), only to find themselves forced to subscribe to a dozen caveat-laden streaming services just to get the content they're looking for.
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Filed Under: content, content silos, copyright, exclusives, piracy, silos, streaming
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Entertainers Assemble!
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Re: Entertainers Assemble!
But their competitive mindset, combined with consumer confusion and preference for just the very biggest services (where they can find enough content not to bother with the rest) points to a likely conclusion: there will be a small number of very large global streaming companies that end up with all the content, because they will drive everyone else who produces or distributes content under, and then buy up the useful parts.
Like the way Fox is being broken up with Disney most likely buying the parts they can use to assemble into their own global streaming behemoth of the future.
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Perspective
Or, in their eyes, solved it's biggest problem.
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you in cloud cuckoo land?
yes, the more a customer has to hunt to find something and the more services that customer has to sign up to just to get all the various programs wanted, the more that customer is going to stray over to the 'Dark Side' and either go to or return to the 'less than legal' options available. even worse, in my opinion, the more the various options then try to stamp out the 'various less than legal options', the more popular they (will) become! if any service wants to gain and maintain customers, it MUST offer all programs the customers want, as soon as is possible (not held back by the greed of the entertainment industries and Hollywood in terms of price or availability) at reasonable cost, or everyone else but the customer will lose out!!
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Why is this a problem?
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Re: Why is this a problem?
Except that this is very much the opposite. The content creators are going from a good idea where everyone fell in line, to a bad idea that people will bypass with piracy.
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Re: Re: Why is this a problem?
This will benefit a small number of the largest services (Netflix, Amazon, maybe Disney because they have the brands, maybe Apple because they have the money to buy their way in and wait out everyone else).
The cutoff bar for success will be high because everyone who falls below a certain tolerance threshold for bothering with their service will see their stuff get pirated. Then those services go under and either the content ceases production or if its popular enough, is bought up as an exclusive by one of the survivors.
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Re: Re: Re: Why is this a problem?
And then it's when you start doubting your money that is being invested on Netflix or Amazon.
Because, why bother paying for something when you can get it for free?
Netflix and other streaming services had the advantage of providing the stuff at a more convenient way than pirating. But once you've dealt with the risk and the hassle that involves pirating, what's their purpose?
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Re: Why is this a problem?
Uh, isn't it the little people that actually make a free market, you know, free? Otherwise you just have a bunch of big corporate entities dictating what you will get and how much you will pay for it, like what cable is like today. Companies are the supply, the little people are the demand.
The only reason they are starting to change their tune is because streaming became an option (i.e. users finally had a choice). Otherwise cable would not have changed at all. If your customer base only has one option, where is the incentive for companies to change off of the bad ideas if they are raking in the cash? Users will always fall in line in this scenario because you've limited their options to either capitulate, go without, or pirate. Users are unlikely to just go without so they will either capitulate or pirate. Streaming offered a more palatable fourth choice.
Exactly, that's kind of the point. When companies are allowed to dictate the market, that's bad. That's when you need regulation, not the other way around.
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Re: Re: Why is this a problem?
I thought it was the imagination. Little people have few freedoms and choosing market dynamics is not one of them.
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deaderer, surely?
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10$ 10$ 10$ ....10$
ya piracy ....unless we all get raises i do not see a reason not too....
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-Anime Strike closed down. This was Amazon's exclusive anime streaming "channel" on Amazon Prime Video. You had to have a Prime subscription and a subscription to Anime Strike to watch the shows. Now all you need is a Prime membership.
-Crunchyroll and FUNimation have entered into a partnership where Crunchyroll gets the subtitled versions of a lot of the shows that FUNimation has the licenses to, while FUNimation has the English dubs. FUNimation and CAR still have their fair share of exclusives, though.
The only outlier is Netflix. Netflix does this thing where, if they acquire the rights to a seasonal anime, they sit on the thing until the whole series is over, which can often be months. This is in direct opposition to the way anime fans have grown accustomed to the weekly "simulcasts" of anime acquired by Netflix's competitors. This is likely so they can preserve their whole binge-watching identity, but keeping shows for months while they're being aired in Japan only encourages piracy among fans who want to discuss shows every week.
Then there's a brand new streaming service called Hidive that's entered the fray....
So yeah, the problem's already occurred.
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And of course this doesn't touch all the anime just languishing out there unavailable for legal streaming. Ultimate Muscle, Ronin Warriors, Evangellion.
Can attest - drives one to piracy so I can actually see what I want.
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I'd love to see some real figures for this little experiment, by the way. CBS only insisted on their own streaming service in the US. Outside of North America, the series was on Netflix. So did the benefit they got actually justify the exclusivity? Or, was it a bunch of time and money where people just feel they got ripped off for a service that didn't have anything else they wanted? From what I've heard the content on there wasn't really compelling people to subscribe when Trek wasn't showing new episodes.
There's probably no way to really tell, given how secretive real data often is. But, at some point the investment in technology, the struggle to keep viewers engaged in a new service, etc., must be outweighed by the passive income generated by licencing to existing players. The issue then just becomes - how much of it is really just about power?
Anyway, as for the point of the comment - most people are only going to subscribe to a couple of services, then pirate the rest. Block them from pirating, they still only have an entertainment budget of X, and you've already caused the problem of making them look more closely at what they're paying for. They're no longer going to be passively paying for channels of content they don't want, so they will reduce their subscriptions to X. They aren't going to subscribe to 8 services to get back what they used to watch. They will pick the best fit for their needs, and either pirate what they're missing - or do without.
It's just another example of how passive consumers have been turned into actively thinking about what they consume, and they're generally not going to go back to paying over the odds for a bunch of content they don't want just because the industry that depended on that used to depend on them to do that.
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So now CBS should have all the fans of "The Good Wife" and all the Star Trek fans as subscribers.
But if their streaming service is so successful, how come they teamed with Amazon to offer CBS All Access as an Amazon Prime channel? Could it be because of convenience? Did CBS realize that Amazon Prime provides a better user experience?
So, like you say, let's see some real figures for CBS All Access.
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Reality suggests that some of the fans are probably subscribers with probably somewhere around an equal number who have either become infringing downloaders, or decided they really don't give enough of a f**k to bother with either.
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The real question is this - how many people continued to subscribe while Star Trek wasn't on, and how many of those are subscribing because they want to and not because they just forgot to cancel? I suspect the figure isn't worth the effort, but until they tell us, who knows?
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Except in Canada, where Bell Media picked it up and put it on one of its cable TV channels.
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Star Trek is CBS's attempt to jump into that winner's circle. If they fail, they will be dismembered and bought up by the winners a la Fox. Netflix would probably love to buy some of their IP.
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Driving me away from watching anything
Instead I'm spending time with my family, building things, and other various more fruitful endeavors.
I find that I do not miss the new hit 'must see' show if I never watch a single episode.
Maybe I will cancel the one streaming service I do subscribe to since its getting less use these days.
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Another pro-piracy consequence
Either way, piracy becomes the path of least resistance: effort expended is not that much greater than navigating the silos, content may be available sooner, will be available for as long as the viewer has disk space to store it, will work on all the major devices, and will not be wrapped in an analytics package.
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Re: Another pro-piracy consequence
That's all it ever is, and all it ever was. The resistance might come in the form of pricing, inconvenience, regional or format windows, language or some other factor. But, piracy usually there as the easy option. It has existed well before the internet, and it will continue to exist.
The biggest problem facing these companies is that in order to fight the problems causing this resistance, they erect more barriers (as you correctly note, DRM is one f the more recent ones). If they could just learn to make the legal routes easier than piracy they will find more success. I mean, literally the selling point for most people I know regarding services like Spotify and Netflix is because they were easier than piracy, and they're happy to pay for that. Stop trying to make them more difficult again.
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Re: Another pro-piracy consequence
When I got the Shomi streaming service here in Canada, I had to do some serious research and open holes in my firewall to get it to work. (Shomi shut down immediately after, but it's still included in my cell bill.)
For 10 different streaming services, that'll be 10 different DRM schemes to contend with at once.
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Re: Re: Another pro-piracy consequence
This is why DRM will always fail, and other methods will always be more effective.
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If they do not trust me to play by the rules, why should I trust them to deliver what they promised. Meanwhile YouTube is full of interesting content, made by people who create because of their passion, and are not looking to be paid for what they produce.
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Other than that, yes, when Disney pulls stuff out of Netflix I will pirate because I do like Marvel stuff (I was very sad when Disney bought them). I will not go hunting them waving my money. If they want it they can keep making their stuff accessible in places I want to be.
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So in the end, the very biggest services will be unhurt, while the ones below a certain high cutoff point will find that everyone is pirating their shows. They will go under and their shows will cease production or, if popular enough, be purchased by one of the surviving services.
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That is your opinion.
My opinion is that there is definitely some entertainment worth a subscription. Netflix offers great value to me, especially during family movie nights. And what you can't get through a paid streaming service (or even if you can), you can usually find for free on a pirate stream if you are so inclined.
In my opinion, there is no online news or analysis worth subscribing to because you can get all of it free of charge, legally, WITHOUT pirating it. Why would I pay for something I can get legally for free?
Such is not the case with entertainment. Some entertainment is only available via subscription (unless you pirate, though in some obscure instances even that may not be true).
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Orange is the New Black, Glow, Ozark, Mindhunter, Bojack Horseman, Lemony Snicket, Stranger Things, The OA, Fauda, Berlin Babylon, Santa Clarita Diet, Frankenstein Chronicles, and Better Call Saul.
And they've got The Godfather Parts I and II now, too. That seems like plenty. But I haven't mentioned the plethora of fine nature documentaries they have.
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Yep, it's a problem
I hesitate to suggest regulation, because the inevitable result would be a hideous turd-like abortion-heap mostly bought and paid for by large incumbents to look fair while locking things down ever tighter, but that the only thing that I suspect would fix it. (In that mythical world where regulations are for consumer interest)
It just occurred to me that maybe what's needed (apart from actual net neutrality of course) is a mandated and limited "exclusives" window for this stuff:
The content creator gets to make an exclusive deal if they want (let's face it probably with themselves), but only for a limited time (maybe 6 months, maybe more, maybe less)... but after that mandated period, it becomes more like how I understand mechanical licenses to work for music. I.e. you don't have a choice, you have to grant a streaming license for a fixed (at least fixed per item) fee to anyone who wants it.
That way you still get to up-sell to the "must have it now"-types in the exclusive period and the everyday consumer gets the wide raft of reasonably priced and wholly inclusive services they really want while the content companies still get paid and discourage piracy at the same time.
Never happen, though.
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Re: Yep, it's a problem
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No, this is true, though for many people the line rather blurs. Leisure-time activities in general pretty much are a necessity in the modern world.
If it were a level playing field or actually a "free" market, you might be right. However, with a highly limited number of players able to demand monopoly rent through legally-backed artificial scarcity, and also the quasi-legal ability to basically strangle any competition, self regulation seems unlikely. Sure, people might dump a crap service, but your legal options to a crap service are either a marginally less-crap service or nothing.
Unless the rent-seeking gets so over-the-top that people literally cannot afford it, it seems unlikely enough people will opt for the nothing to make a difference.
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But as you said, will not happen anytime soon because copyright morons want everything, hand, arm, body and soul.
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Re: Yep, it's a problem
Congratulations. You just described copyright.
And we've seen how that turned out.
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Re: Yep, it's a problem
If the Duffer Brothers won't agree to exclusivity, Netflix says no, and so does every other streaming service. You don't see CBS shows on ABC and vice versa, do you? Same idea.
Now if someone like David Lynch came along and made some series that he insisted play on every streaming services, I guess he could get away with it because he's a big draw. But most creators just want an audience so they will sign on the dotted line.
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Yes, that's exactly the point. That is indeed exactly how it is right now. But do you seriously think there's no market for a slew of "we have every damn series and film you've ever heard of and many you haven't - including all the biggies except from the last 6 months"-service? And that similar services wouldn't be inevitable if they were possible and cost-effective to run because of fixed licensing fees?
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What DO they mean?
Or, are they saying that once the children of Millennials grow up they will find their lives empty because they don't have access to something they have never seen, in...oh say 20 years or so? Will their shareholders let the wait 20 years? That would be 80 quarters of less profit. Hmm.
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Re: What DO they mean?
They're in for a shock when it finally sinks in that this is an irreversible change for the most part, but the denial will ensure it happens anyway.
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Re: What DO they mean?
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Re: What DO they mean?
This sounds like those green light schedules that include a milestone called "a miracle happens"
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Star Trek: Discovery
I DO still have cable, but I'm tapped out on my monthly entertainment expenditure. 95% of it on channels I've never looked at, but are required to get the few I watch.
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Re: Star Trek: Discovery
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I have a feeling that's a common opinion, and a reason why CBS probably alienated much of their audience with this move. But, until there's some reasonably independent figures we can't really be sure.
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a silver lining?
By subcribing to multiple services instead of just one, it's unlikely that such people would ever find themselves suddenly cut off from everything, as has happened with many Netflix customers.
A similar situation arose with "one click" file hosts. In order to get all the content that gets uploaded, a person would have to pay a whopping monthly cost subscribing to many different services. Then (presumably unauthorized) aggregator-type services known as "link generators" emerged which let a user access multiple file hosting services for a single low monthly fee.
The same thing is bound to happen to Netflix-like streaming sites that offer exclusive content: "pirate" streaming sites will emerge that offer 'all in one' paid access.
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Re: a silver lining?
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But CBS made that show so that they could launch their own Netflix competitor. They are only licensing it Netflix because they have no global streaming footprint (yet). If CBS thought Americans could easily VPN their way into a foreign Netflix subscription and get access to the show, then CBS would be shooting themselves in the foot to license it to Netflix. So they would license it in the usual willy nilly patchwork fashion and Netflix would lose out big time because they wink at VPNs.
And that is really why Netflix cracked down on VPNs. They realized the harm VPNs were doing to their ability to swing great deals like Star Trek Discovery greatly outweighed the ire of a few subscribers who use them.
More services won't lead to more region locking since to prosper, they need the scale you can get only by being global (which is CBS's long term plan - if they succeed, Netflix will lose their license to Star Trek as CBS can handle distribution in each country they expand to). You will however get content locking. Star Trek will be behind CBS's paywall across the whole world - IF CBS succeeds in their attempts to become a Netflix competitor. The jury is way out on that one.
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Re: Re: Re: a silver lining?
Citation needed.
Star Trek discovery is hardly a "great deal". They pay basically the entire cost to create the show and are allowed access to show it in some limited regions (which as you mention, will probably be revoked for later seasons if the show is successful).
Netflix caved under direct pressure from the studios that they were already licensing content from because otherwise those studios were going to sue them claiming they were profiting off piracy, causing all the studios woes, etc. Not to "get great deals".
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Apt example
Pirated it. Would have paid the fair market value of 99 cents an episode, but that wasn't possible.
In a sensible market, all of these streaming operations would cross-license to each other so that a subscriber to any can access all content and everyone makes some money. But this isn't a sensible market and just as you point out, once it's balkanized enough people like me will walk away from it.
In my case, that's already happened.
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Re: Apt example
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Of course something like that would never happen. It would require them to see common sense and realize that the Glory Days of Pay TV are over....A person can dream I guess...
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One would expect the content holders to bundle all their offerings, and offer access to the full package at a defined usage based rate. I suspect what we're seeing is the content owners going in guns blazing with demands from draconian content encryption/anti-piracy standard to massive tiered packages so common in the cable world.
Ultimately what needs to happen is allow the failure of some business models to bring some rationality back to these negotiations.
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Netflix has 117 million customers willing to pay, Amazon has maybe 26 million who watch their video, Hulu has 17 million, all those numbers will grow. The way to make those numbers grow: exclusive content. It gives a person a reason to opt for this service over that. The strategy works, it will continue.
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The premise here is that there are people who are already paying for Netflix but, if a show is not offered on Netflix, they will pirate it rather than pay for an additional streaming service.
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I pay for Netflix, and for Sky TV, in Ireland. I regularly think of a movie or a series I want to want to watch. Go to Netflix - it's not there. At least not in my region (which is another layer of frustration). Go to Sky Box Sets, Sky Go - not there. Maybe it's on the store, so I have to pay more. Maybe I get lucky and it's there, and I also need to watch 5 minutes of unskippable adverts. Or it's on Amazon - need another subscription. Or on some other subscription service which I don't want to pay for. When Disney split everything out, it will only get worse, and continue worsening with further fracturing.
I would be more than happy to pay a subscription or two which together could give me even 70-80% of what I want to watch. But the option doesn't exist. So - piracy:
Go to site
Choose entertainment
Watch
That's what it should be, no bullshit.
We're not afraid of paying for good service. Piracy is attractive mainly because it gives you what you want, when you want it.
Sigh
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The same goes for the streaming service. It started as a great idea. Pay and get content. I was never the one to use alternative sources of entertainment, prefering to buy or rent the physical midia. Then Netflix arrived in my country and this is no more.
This exclusive bs these companies are pulling through will make me go back to alternative sources, buying my DVD/BDs for the ones I really like, which won't have any license BS coupled to it, as well as renting the physical media. I guess Blockbuster is coming back after all.
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"buying my DVD/BDs for the ones I really like, which won't have any license BS coupled to it"
So, you never tried importing titles from a different region, then.
"I guess Blockbuster is coming back after all."
They still have one store left. If they can make a business out of "people who were too cheap to buy something that would work" as their customer base, then have at it.
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I pirate most of my content now anyway
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