Is Streaming Sustainable For The Long Term? Look Back 30 Years For A Clue

Starting in the mid-1990s and well for a decade after, you could hear critics and consumers complaining that they did not really need the availability of 200 to 300 TV networks on their pay TV service.

They regularly watched a lot less -- maybe 10-12 channels at most. And no surprise -- they wanted to pay less. And the associated phrase "a la carte" kept being floated. 

Now almost 30 years later, we have what consumers have long desired, mostly: Individual media companies' streaming apps for consumers to pick and choose.

The question remains: Is this what consumers want? Almost.

Big legacy TV-network-based media are now struggling to bring all this to consumers -- with billions in annual losses collectively for services like Disney+, Paramount+, Peacock, AMC+ and all the rest.

After starting up these businesses in recent years -- amid special launch promotions and low pricing -- things could be dramatically changing. 



Think higher pricing, more advertising-messaging on streamers, and perhaps more limited TV/movie content. The latter comes from companies realizing they need to generate more revenue from third-party media companies.

Veteran media and advertising analyst Brian Wieser recently referenced this concept starting in the 1990s, when then Senator John McCain advocated the idea of "a la carte" selling TV networks to consumers.

Interestingly, at the time, TV network executives rebuffed these calls for change -- saying that consumers were getting a great deal where they had access to more than 200 networks for around $50 to $60 a month.

Furthermore, they said that if these networks were sold separately, consumers could end up paying more. For example, if consumers didn't watch sports channels, they would not sign up for, say, ESPN. 

In turn, that would mean TV owners would see a drop in overall subscribers for specific channels from, say, 90 million to around 55 million, perhaps. And this would mean that media companies would get paid less carriage revenue from pay TV distributors.

While modern streaming has given consumers a lot of flexibility -- lower cost, easy access/cancellation, and tons of original and library products -- it may not be truly ‘a la carte’, since large, legacy media companies amass all their networks and programming in one streaming app package.

The problem is that consumers are increasingly focused on just current or new movies and TV shows.

Thus, there is a lot of churn, canceling and then re-signing back on to a service.

Overall, the business is still plagued with billions in losses. So how long is this sustainable? 

This column was previously published in an earlier edition of TV Watch on July 26, 2023.

1 comment about "Is Streaming Sustainable For The Long Term? Look Back 30 Years For A Clue".
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  1. Ed Papazian from Media Dynamics Inc, November 24, 2023 at 10:17 a.m.

    Interesting subject, Wayne.

    A few points.

    In the bad old days, when there was no streaming option and many consumers had to buy the "pay TV' bundle, it was true that an average subscriber in a cable home watched about 10 of the 170+ channels available in a typical week. However, other household members also watched and their selections of channels did not necessarily match the subscriber's list on a weekly basis. As a result, the typical cable home watched about 17-18 of the available channels weekly and if one extended the time frame to a month or longer, this figure rose to 20 channels, then close to 30 channels---and that was just an average. Heavy TV viewers---that fifth who acounted for 50% of the viewing---- watched many more channels than the average---some very frequently, others less so.

    As for the dreamy idea that consumers can pick only those channels they watch--per week?, per month? per year?----and only pay for them,  the networks were right. Implementing such an idea would have meant the elimination of more than half of the cable channels---mainly the more selective ones-----and prices for subscribing to the survivors would have shot up so high that the consumer would wind up paying much more ----for much less.

    Which is now happening in streaming---there isn't enough viewing to go around and support all ofthe services that are springing up---and ad support is limited in supply. So a greatshakeout is coming in streaming as well as linear TV. When it's done---and many cable channels have gone belly up plus many SVODs, AVODs and FASTs---we will probably wind up with those good old bundles again---really big ones that combine linear with CTV---and consumers who thought they they were going to save $15-20 per month will wind paying double or triple their old TV bill for fewer channels. It may be that the on-demand function of CTV is a plus that makes it all worthwhile---but I suspect that this applies mostly to light viewers, not TV addicts who do most of the viewing.

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