this post was submitted on 30 Sep 2023
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the problem i have, that nobody has been able to really explain to me, is how the economics of streaming should be made to work.
content is insanely expensive to make. even with all of Netflix’s recent shitty changes, their operating margin is still only about 13%. that isn’t enough cash left over to fund production of every single show they don’t have. and it’s important that they actually be able to fund production, because unlike 10 years ago, most productions no longer rely on first runs on OTA or cable TV to make their money
so it seems to me there are three paths here:
the industry puts everything on a single service and dramatically increases the base price (remember cable? my parents paid twice as much for it in 2005 as i spend today on streaming services)
the industry puts everything on a single service and dramatically scales back production (remember OTA TV?) to fit within the budget afforded by a reasonable subscription price
studios branch off into competing streaming services
i’m not trying to start a fight or defend shitty corporate behavior (no one will ever get me to pay for ads), i just want to know how people think this could work in a way that balances out
Netflix caused movie pracy to nearly case, because was affordable and convenient. People preferred to pay than hunt and download movies.
Once other studios started creating their streaming services, applying exclusivity for shows, jacking prices for their content (encouraging ads) all went to hell. They successfully managed to ruin the experience, and make it as shitty as cable.
The thing about intellectual property is that you create it once and then you can copy it infinitely and generate profit. The studios want to maximize the profit, it isn't (as you are suggesting) how hard was to create content, but it is how much people are ok paying. It always was.
They can do this, because there's monopoly due to crippled antitrust laws in the last 50 years.
Piracy is a natural response to this, but they are using copyright (which was originally meant for different reason).
Antitrust laws as well as laws like copyright, DMCA etc needs to be fixed.
this doesn’t really answer my questions, though.
netflix was able to afford that much content back then for two reasons
they were flush with capital from investors, spending more money than they were making to promote growth.
netflix wasn’t running new content, they were essentially licensing “reruns” of content that already had its primary run elsewhere.
basically, everyone got used to a certain lifestyle being subsidized by cheap capital and investors misplaced belief in perpetual growth. nobody has yet to explain to me how this could have been made sustainable.
The music streaming platforms (admittedly with their own challenges) have to compete based on service offering rather than exclusivity. Imagine if all the streaming platforms competed on quality of service instead of exclusivity.
I’d personally pay a lot more if I could just have one service that had all the content I want, but instead we’re in this situation where the platforms (in my opinion) are lacking innovation and the content is all over the show. Here in NZ I find different seasons on different platforms or plenty of shows that just aren’t licensed for our market. We all know how that problems going to be solved.
the music streaming platforms basically screw over the artists to make that feasible, with the excuse usually being that artists can make their real money touring and selling merch.
the cost of producing music is also infintesimal compared to that of producing film and television. the whole music industry itself is pretty small in comparison, yet Spotify costs about as much as a streaming TV service.
to scale that model up to film and TV would mean either a much higher base price, or a lot less overall content being made. these are viable paths, but both come with big trade offs.
Not saying that you shouldn't pay people, but the CEO of netflix makes over $50M a year. Actors make how much? I'm sure there are a lot of ways to cut costs and make a more equal society to boot.
obnoxious executive pay is its own problem, but even zeroing all that out wouldn’t do much for the financials. if you brought that $50m down to $0 and passed that savings on to consumers, each netflix subscriber would save pennies on their monthly bill
I'm not saying just the CEO, but the whole structure. Look at the kids from Stranger Things for example. Any of them over 20 yet? If they never work another day in their life they still enjoy a life unattainable to almost everyone. Good for them I suppose, but it's that really how a society should be? And there are a lot of people behind the scenes that we don't see that makes an enormous amount of cash while most don't. There should be a more equal distribution.