Since Netflix started streaming television and movie content in 2007, the question of whether it might one day take the place of broadcast television has been in the back of people’s minds. As the years have gone on, that question has shifted from if to when, as streaming platforms grew in number and scope. Now, in the midst of a global pandemic, that time seems closer than ever.
Even before the world was suddenly locked inside their homes, broadcast was certainly feeling on the outs. With the generations who grew up with the internet now being of age to consider buying their first cable package, many are turning to streaming services instead.
This could be due to multiple reasons. One reason is that a subscription to a streaming service costs exponentially less than a cable package, which might include hundreds of channels that you have no interest in watching. With nearly 300 streaming services currently available in the United States ranging from broad collections, like Netflix, to Network/Studio run, like Disney+, to niche categories, like CrunchyRoll. Audiences can easily pick and choose what they would like to be actively watching and ignore the rest. While some argue that with a large amount of those services having exclusive titles forcing you to sign up for multiple, you end up paying the same amount if not more than you would for a television package you would have to accumulate at least five concurrent services to even begin approaching that number, more often closer to ten. Forbes reports that, “On average, (in 2020) Americans subscribe to three paid streaming services, spending an average of $37 per month.” This is almost half the average cable television package starting at $60 per month. This also points to the increasing popularity and growth in the streaming industry. Compared to three years prior (2017), “the majority of Americans only paid for one streaming service, which was almost always Netflix,” according to that same Forbes article. To juxtapose that, the annual pace of subscriber decline for cable television hit 5.4%.
It can also be argued that streaming content is overall a better and more user-friendly experience. Obviously, cable television does not have a user interface the way that streaming platforms do, so it is hard to compare the two in that regard. But, that lack in many ways puts streaming leagues ahead in the way it displays and recommends content. Gone are the days of channel surfing and hoping that a show will catch your interest in the few seconds you are willing to dedicate to it before flipping to the next channel. Streaming services, far more often than not, have algorithms built into them that can 1) track what you are watching, 2) are able to recommend things that you may also like, thereby quickly easing the process of finding a new show (not to mention that you have access to their entire library at once, but we will dive further into that later), and 3) if you know you are in the mood for a specific genre, you can easily sort content to find what you are looking for. So not only are you not paying for channels that you will never watch but you are having content that is curated to your preferences fed directly to you, a practice that many viewers are getting used to. One could imagine that once you get used to being fed content chosen specifically for you, it would be hard to go back to flipping channels.
Beyond just having a better experience accessing content, it might just be better content. Many of these services have started creating their own shows and movies so they can have more control over their library and worry less about managing contracts with outside studios to keep some of our favorite shows on their site. This content is not subjected to the same game of catering to advertisers or the regulations of broadcast television so they are able to create content that is much more niche and has more minority representation than broadcast television. More than ever the content is dictated by what the audiences want to watch. And, it seems to be working. At the Golden Globes this year (2021) streaming platforms were on their way to winning almost double the awards of cable, taking home 34 (20 of which were Netflix’s) compared to cable’s 20. The SAG Awards were similar with 28 to cable’s 16.
Even news, which many have latched on to as one of the remaining pillars of cable television that will keep it alive, has gotten a polish in the streaming sphere. Since news executives do not need to worry about getting stories in before the next commercial break or pulling in viewers for the moment that it a story is airing, they are more worried about how many viewers watch every month and how many hours have been streamed overall. This allows segments to be much longer, some stories nearing 15-20 minutes each, allowing them to be much more in-depth. This allows news to go beyond quick segments and verge on mini-documentaries that can really highlight what they are talking about, better informing the public. So, the idea of streaming live broadcasts combined with these more in-depth stories replacing traditional news broadcasts does not seem too off base.
Ads are not only holding news reporters back. To be completely frank, the vast majority of viewers are not a fan of advertisements and paying for cable television feels like paying to be advertised to. As previously stated, streaming services cost less than your average television package but you no longer have to worry about Popeyes interrupting your show at the most stressful moment. With the invention of DVR, most television viewers became accustomed to fast-forwarding through their commercials to get to the good stuff and with streaming platforms, you do not even have to watch them at 32x speed, they just are not there. For those aforementioned people who think that paying for multiple services at once is too much, there are occasionally free versions of the application available and those are the only places where you will see advertisements on streaming apps. So instead of traditional cable television where you pay and you have ads, you can either pay and have none or get the service for free and have to deal with being marketed at every now and then.
This can be quite advantageous to streaming company’s as well, especially those who started in broadcast and are making the transition. Companies like NBCUniversal who have their streaming service Peacock offer both a paid and non-paid version allowing them to sell ads just as they would for cable. WarnerMedia, on the other hand, is trying to find a way to convince more users to sign-up and actively use their service, and is considering rolling out a cheaper version that would include advertisements as an incentive for people who do not want to spend as much.
Even for advertisers streaming content may be a superior way to spend their money. The algorithms that streaming services use to recommend films and TV shows to you could also be used to recommend you products. The information that these services collect could be used by advertisers to hyper-target their products. Instead of spending money to target a demographic of one show, that may not be too specific, they can target individuals specifically, so a person watching the same show as you might get completely different advertisements while watching it. This allows companies to make their money go further and ensure they get in front of the exact eyes they want.
Advertisers have not quite caught onto that fact just yet. Scott Rosenberg, senior vice president of Roku, explained to Variety that, “About 30% of all TV viewership is now done…through streaming. But only 3%, 4%, 5% of TV [global advertising] budgets are spent there.” This means that the vast majority of advertising money is still being spent on broadcast television. Sure, this could also be due to the lower number of platforms currently offering non-ad-free versions of their platform but certainly is still exponentially lower than it should be. Perhaps, this points to the industry’s uneasiness about the switch or maybe they are in denial that it is happening altogether.
The Covid-19 pandemic, however, has made it quite clear that the switch is real. With everyone locked in their homes in quarantine, streaming skyrocketed to the top as it became, in a way, the only option. As the world became a place of fear and uncertainty, many people turned to entertainment that they already knew instead of seeking out new content, and with all of these services’ extensive catalogs, one does not have to wait for a rerun of Friends to come on. Instead, they can simply look up their favorite episode on Netflix, or, in more proper Netflix style, binge the whole series. Before the pandemic started, binge culture was already a well known Netflix trope but with everyone having quite literally all the time in the world, being able to binge all of a show, and not have to wait for a new episode every week, became invaluable, an experience offered exclusively by streaming platforms.
Also, with the onslaught of the pandemic closing all businesses, including movie theaters, the big Hollywood studios had to find new ways to release their films. While many of the major blockbusters are being continually pushed back for a hopeful post-pandemic release where they are expected to make a larger profit, there have been a large number of streaming-exclusive movies to come out this year where a subscription was all you needed to watch (not to mention that subscription is often equal if not cheaper than an average trip to a movie theater pre-pandemic), and a large number of these films were met with great success and many new movie deals being made with platforms to get new releases quite quickly after their theatrical release (i.e., the Warner Bros. HBO Max deal). So while made-for-television movies are not exactly known to be the most Oscar-worthy of products, HBO Max is getting major motion pictures like Dune the same day it hits theaters. This lack of theater revenue to companies is also causing them to reallocate more money to streaming, the one sector that is doing well. This restructuring of major media companies will likely stick around after the pandemic as the increase in money now will likely increase its profitability post-pandemic as well.
The other major thing that the pandemic changed was sports. Even more so than news, sports were seen as the main reason to keep your cable television subscription. With the pandemic, all live sports events stopped. With sports channels only able to play reruns it was the last straw for many people and cut their cable and we will see if they ever come back, especially with some major events already transitioning to being live-streamed over the internet.
With all this being said, what is actually being done at companies and where does it seem like they are headed? According to Scott Rosenberg, “Every major media company understands that the future of television is 100% streamed. It is a trend that started before the pandemic, and the pandemic has really acted to just accelerate and cement the trend.” Noah Oppenheim, president of NBC News, seemed to echo that statement saying, “One thing we can say with certainty is that streaming has to be a part of any responsible strategy. It’s increasingly the center of any responsible strategy.” These statements seem to be holding true. Disney CEO Bob Chapek issued a press release stating that Disney’s priorities are streaming first. AT&T put two previous streaming heads in CEO positions which The Verge speculates that, “directives for WarnerMedia are clear: turn the company’s entertainment divisions, including cable TV and film, into a streaming-focused business. The Wall Street Journal reported that NBCUniversal was looking into reorganizing so it could focus more on streaming and less on cable TV. ViacomCBS is supposedly considering getting rid of entire networks. At this point, it is going to be necessary for media companies to take part in streaming services or they will either become irrelevant or become solely a producer of content for other streamers. As The Verge so perfectly put it, “The bottom line is that if these companies want to be in on streaming, it means they have to slim down and abandoned other parts of their business that have become dinosaurs. In many cases, that means shedding cable networks.” In a world where companies need to cut things to make it in the streaming space, television is the first to go.
Cable television has been on its way out for a while now. With the pandemic, its exit has been greatly expedited. The pandemic has caused drastic losses for everyone and when the studios were met with needing to reprioritize where they were putting their money, they took it away from the already dying cable television divisions and fed everything into streaming which was thriving in the pandemic. The pandemic took a slow fade out and put it out of its misery.
