• by Gary Holmes , Op-Ed Contributor, December 11, 2018

It’s a capitalist truism that commercial success in any new economic sector will generate copy-cat competitors who will then try to steal market share through relentless competition and predatory pricing until the market collapses under the weight of too much product.

We are on the verge of that point now with streaming services.  Already the market seems glutted with Netflix, Amazon Prime, and Hulu, all of which started out by distributing programming created by others and have morphed into content originators themselves. Still, if there were just a “Big Three” of streaming services, it would be a little pricey but manageable to buy all of them and have access to the vast majority of video programming.  

Unfortunately, a lot of content producers are increasingly reluctant to license their TV shows and movies to the big streaming services.  They want to cut out the middleman and sell programming directly to consumers through their own businesses.  Thus we now have CBS All Access, ESPN+, and AT&T WatchTV (the latter of which offers Turner content). 

These are services that no one really asked for.  OK, maybe a sports fanatic who wanted to watch nothing but sports would be interested in completely cutting the cord and signing up for ESPN+, but is there really anyone who can’t live without the CBS video vault?

Now comes Disney+, the most formidable of the burgeoning new streaming services.  Set to launch at the end of next year, the new service will offer up the film and television libraries for some of the most iconic brands in the business, including Disney, Pixar, Marvel, “Star Wars,” and National Geographic, the latter of which will join the Disney fold through its pending acquisition of 21st Century Fox.

Enough is enough.  Let’s strangle this monster in its cradle.  Boycott Disney+.  If Disney successfully launches its own streaming service, will NBC Universal be far behind?  Or Sony?  Pretty soon we’ll be overrun with specialty streaming services all offering their own sliver of the content universe.  

A world with dozens of narrow streaming services might be the dream of a la carte advocates, who believe we should only pay for the specific programming we want to watch.  I understand the attraction of a la carte, since the average cable bill is ridiculously expensive.  And as a New York Yankees hater, it bugs me no end that I pay about $5 a month for the YES Network, thereby indirectly subsidizing a team I loathe.

And yet, if you did cut the cable cord and tried to recreate the portfolio of channels, networks and content you currently get by buying their various streaming services, the cost would be even higher, with a lot more aggravation in trying to track down each service. 

I’m under no illusion that my own personal boycott of Disney+ will hold back the tide.  Capitalism abhors the status quo, and CEOs don’t stay in their job long without making and winning big bets on market disrupters.  

Never mind that ESPN+, another streaming service from Disney, is already losing $100 million a quarter — and that Disney+ will probably lose money for a long time too (to say nothing of the lost revenue from pulling out of its licensing deal with Netflix).  Starting your own streaming service is a Big Idea, and companies like to be “bold,” “visionary,” and “strategic.”

Whenever there’s a glut of any product, its producers usually respond with a round of price cutting, which can temporarily lower the cost of the product to the consumer, even as the providers continue to lose money.  Usually a price war benefits consumers, but Disney, Netflix, Amazon, etc. probably can’t lower their prices enough to offset the fact that we will need to buy multiple services if we want to replicate the access we now have.

It doesn’t take a futurist to predict how this will play out.  It will be the same scenario that played out in the auto, telecom, electricity, cable, ISP, film, airline, and online search sectors. Pretty soon, there will be a dozen streaming services, many of which will be awash in red ink.  When shareholders think they’ve lost enough money, there will be industry consolidation and we’ll back where we are now, with just a handful of providers.  

To accelerate this process, don’t sign up for any of these new services.  It will only encourage them and delay the day when we can return to a saner streaming system.