The Wild-West Era of Streaming TV Is Ending

Andrey_Popov/Shutterstock.com

Featured eBooks

Digital First
Cloud Smarter
Cybersecurity & the Road Ahead

Cord cutters will soon need several subscriptions to watch all their favorite movies and shows—and the cost could look like the dreaded cable bill.

As details of the subscription services planned by each of America’s corporate-media powerhouses have trickled out, something has become clear: The past decade or so of online-streaming television was the medium’s wild-west era, a time when you could watch thousands of hours of content from every major studio for a fraction of the cost of cable. Between Netflix and Hulu, subscribers could watch most first-run movies and TV episodes on their computer for less than $20 a month. Throw in HBO at $15 more, and you basically had the complete package. And it was okay if you had to wait a little while to see everything, since the concept of the “water cooler” show that everyone watched at the same time had all but vanished.

With the advent of Disney+Apple TV+, and a new service now being mulled by the AT&T-owned WarnerMedia, the cowboy days of streaming media are over. It’s why Netflix has spent the past few years investing in original content to fill up its carousels; why Disney has bought out almost every network that had an initial investment in Hulu; and why WarnerMedia is planning to leverage the might of its HBO brand to launch an umbrella app that will take advantage of the conglomerate’s entire archive. The siloed age of television has arrived, a time when people will be paying six or seven different monthly fees, if not more, to keep abreast of pop culture—and the cost will end up approximating the hefty cable bill that every cord cutter has sought to avoid.

WarnerMedia, which was created after AT&T’s purchase of Time Warner in February, is a juggernaut rivaling the likes of Netflix and Disney. The company owns the Warner Bros. movie library as well as the deep Turner Classic Movies archive, the premium-cable channels HBO and Cinemax, and the many Turner Broadcasting channels, such as TBS, TNT, CNN, TruTV, and Cartoon Network/Adult Swim. According to a Wall Street Journal report last week, the WarnerMedia chief executive John Stankey is planning to launch an online platform that brings all of that together for $16 to $17 a month, which is just a little more than an HBO Now subscription costs.

If WarnerMedia’s service launches as planned in early 2020 (WSJ pegged next March as the proposed date), it’ll come months after Disney+, which will tap intothat company’s library of classic animated films, Pixar projects, Marvel shows and movies, and the Star Wars universe. Disney also now has full control of Hulu and just completed an acquisition of Fox, an almost century-old studio whose archives will help fill either streaming service. The company’s ultimate plan is to bundle Disney+ (priced at $7 a month) with Hulu and ESPN+ as a package deal. Meanwhile, tech giants including Netflix, Amazon, and Apple are spending huge sums producing enough original content to keep pace.

This ongoing arms race means there’s more original television to consume than ever before, but it also means the financial burden on consumers will continue to grow. Even as people cancel their cable subscription to save money, the streaming era will offer more of the large-scale bundling of channels that made cable television what it was, attracting viewers with marquee items such as sports or movies but making them pay for the whole media package. WarnerMedia+ (or whatever name it ends up getting) will use HBO to bait viewers into subscribing at higher prices for everything else.

That plan was spurred into action by Netflix, which spooked executives such as Stankey into thinking the only way to compete with the company was to churn out TV at a similar rate. Last year, Stankey lectured HBO employees on the company’s failings, despite its generally excellent track record for producing high-quality, award-winning shows that yield billion-dollar profits. “I want more hours of engagement,” Stankey told them. Several months later, the HBO CEO Richard Plepler stepped down.

But Netflix’s staggering spending on original content came as the company realized that many of its most popular offerings—shows such as The Office that were licensed from other companies—would become more expensive as studios began to learn the value of streaming media. In December, Netflix paid WarnerMedia $100 million to retain the rights to the sitcom Friends for one more year, a colossal sum that WarnerMedia likely agreed to because it knew its own service wouldn’t be ready until 2020. But slowly and surely, the corporations are beginning to pull their properties back, recognizing that exclusivity will be the way to lure new subscribers. The boundaries of this digital age have been redrawn, and by 2020, the exciting world of streaming media might start to look very old-fashioned once again.