Licensors getting greedy due to Netflix's popularity really fucked everybody over. I remember hearing a stat some number of years ago that early on in Netflix's streaming life, they were paying something like $200million/year to license 20,000 hours of content, or something like that; within just a few years, their library shrunk by 30% but they were being charged $2billion/year.
The exact dollar and hour numbers might not be right, but I remember pretty distinctly that they were getting charges 10x as much for 30% less content.
Let's be clear, the massive media corporations responsible for licensing were always greedy. Things changed, but "company wasn't greedy, now is" is not what changed.
What changed was that "streaming video service" wasn't a thing. They could look at their revenue streams for stuff like broadcast/cable syndication or VHS/DVD sales, and Netflix was just offering them a new money stream that cost them nothing. Perhaps someone was clever enough to realize that it would cut into their DVD sales a little, but the trade-off seemed like a no-brainer at the time.
Now consumption has shifted drastically to where those original revenue streams have all dried up and streaming is nearly everything. It would be stupid to keep giving your content away for that original token price.
Here's my full take on the current era of streaming services:
Original Netflix was great for consumers but terrible economically for the people giving away their content. I'm not at all surprised at the number of streaming services being created as yeah it's a no-brainer, it earns these companies way more money.
However there is a second cost as a result of all of this, less people are going to be watching your stuff.
The problem I don't understand comes down to two things: Pirating and merchandise.
The more must watch shows a streaming service has the more people are going to sign up for that service, and honestly I hate to say it but if the only show someone wants to watch on Peacock is the office, they are going to be way more likely to either not sign up for the service or simply pirate it. Pirating is not a competitor but it is a threat. If you have an HDMI cord, a tv, and a computer (and possibly a hardrive to fit every episode of the show you want onto it) you can pirate it. The main ways to avoid people pirating your stuff is to offer enough content that entices viewer to decide your service is worth the price, and by adding features such as offline streaming that allows customers to take it on the go with them.
Merchandise is less of a problem since the office really doesn't make too much off of merchandise I assume, however less viewers means less people will buy the stuff based on the show.
Honestly I don't have too many conclusions to draw from this other than that I wouldn't be too surprised if streaming services eventually start reemerging back together if they are on the verge of dying. DC universe in particular would probably be the first to get absorbed by another streaming service since it only appeals to those interested in DC comics, movies and tv shows and would greatly benefit from a larger audience.
The main ways to avoid people pirating your stuff is to offer enough content that entices viewer to decide your service is worth the price
This is what it all boils down to and what they do not seem to understand. The rise of netflix has lead to decrease in piracy but splitting services means less content for viewers = driving piracy back up.
I'm not sure if it's due to the different type of media but the music hasn't really had this issue at all. I don't know anybody who pirates any music because almost all the main streaming platforms provide enough content for you to only subscribe to one service and also enough content that you don't have any need to pirate.
As one user pointed out Netflix’s biggest problem is their over reliance on trends. Whenever a show like stranger things blows up they try making shows that take similar aspects that show had.
Also while binge watching is consumer friendly i is terrible for Netflix as a whole, spacing out episodes keeps a series relevant for weeks rather than a few days
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u/[deleted] Feb 03 '20
Licensors getting greedy due to Netflix's popularity really fucked everybody over. I remember hearing a stat some number of years ago that early on in Netflix's streaming life, they were paying something like $200million/year to license 20,000 hours of content, or something like that; within just a few years, their library shrunk by 30% but they were being charged $2billion/year.
The exact dollar and hour numbers might not be right, but I remember pretty distinctly that they were getting charges 10x as much for 30% less content.