First of all... the Kegs & Eggs party is cancelled. I know you were all looking forward to it but something came up and it's just not gonna be able to happen. We're gonna reschedule it for a few weeks from now but I'll send out new invites when we do. Yeah, I know... it sucks. Nobody has done a morning party in forever and just the novelty is awesome. But yeah... sorry kids. We're gonna have to cancel it for the time being.
Now that that's out of the way... on to something that's been on my mind for the past few days since I first got the e-mail about Netflix changing their price structure rather seriously.
In case you didn't know... Netflix is changing their price structure rather seriously. Presently, you can get your basic "1 dvd at a time (but unlimited rentals per month) & unlimited streaming" package for like $9 a month. That's cool. That's a great fucking deal. Yeah, the streaming content is a little lacking. There's a LOT of full seasons of TV shows on there, but movie content is rather mediocre. You get a lot of direct-to-dvd stoner comedies, low-budget horror movies, a bunch of 90's and early 00's movies, mediocre documentaries and the occasional big-budget blockbuster type movie thru their agreement with Starz.
Their streaming is actually worth it just for the TV show content, to be honest. But that's really the only portion that has much selection for recent quality content.
And if you want something recent on dvd, you still get 1-at-a-time that is only delayed by a month from in-store release. So if you're even moderately diligent about watching the dvds (which I'm totally NOT), you can get 2 or 3 a week if you time it correctly on when you return them. That alone pays for the $9 a month vs Redbox, on-demand thru your cable provider or (if you can still find a brick & mortar) Blockbuster.
After the price structure change however, it'll be $8/month for unlimited streaming and another $8/month for the 1-dvd-at-a-time package. This is still not a bad deal. $16/month for unlimited streaming of (mostly tv show) content and maybe 4-10 dvds per month. That's not a bad deal. You're still saving a good chunk of cash over hitting Redbox or Blockbuster. And you're saving a boatload over the OnDemand thru cable.
So while it's still a good deal, it's not amazing anymore. Especially when you consider that the tv shows you get are, at best, last season (when the present season has already started on live tv) if not 2 seasons ago.
But that's not really the issue that I've been pondering. No, the bigger issue is the tv networks, cable providers and movie studios reaction to streaming content.
In the early 00's, dvd "collecting" became the thing to do. It was cheaper than vhs had ever been during it's reign as the dominant format. It was smaller & took up less physical space for storage. It was better quality. It was more durable. And because the economy was doing well, people realized "hey, I can have my content when I want it in better than broadcast tv quality and all I have to do is pop the disc into the player? game on!" and as a result, the boom of dvd sales was on. And the studios made a fucking killing. They still had their previous revenue streams. The content licensing to HBO/Showtime/Cinemax/Etc. , the content licensing later to the cable networks like Fox and Turner, the rental licensing to places like Blockbuster and your smaller stores. But now they also had the dvd sales to the consumer that they didn't have in nearly the same quantity when vhs was the dominant format.
And additionally, they had a more secure format (for a while) from bootlegging. Anyone else remember daisychaining vcr's together to copy your movies from the store when you rented them? And at like $3-4 a pop for a blank vhs tape, that was kinda fucking pricy still. Between the rental fee and the blank tape, you were looking at 1/3 of the price of the real one. Those were the days.
But regardless... the studios made a fucking killing.
When tv shows started getting put onto dvd as well, that was a whole other revenue stream that the studios & now the networks. TV shows that had long ago been pulled off the air and maybe a decade or 2 later showed up on cable channels like TVLand for a tiny licensing fee now had totally new life. Hell, it even breathed life back into previously cancelled shows. Family Guy and Futurama both got renewed years after their previous cancellation just because of dvd sales (though the syndication ratings of the shows didn't hurt either) that never would have existed with the vhs format.
So long story short here... the studios and networks were making money hand over fist with the dvd collecting boom of the early-to-mid 00's.
And like any company, anything that threatens to bring this years revenue streams down below that of the previous year, regardless of if the previous year was a fluke or if they were artificially inflated revenues due to a boom/bust cycle, these companies will try to kill it.
The demand for OnDemand content was growing.
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| A table, some t-shirts & mail bins is all the overhead netflix has. |
And the customers love it even more because they don't even have to leave the house to get the movie they want, drive to the store only to find out the movie they really wanted is sold out, spend a half hour finding an alternative, wait in the lines at the store for checkout and then drive home.
And in the case of RedBox, the kiosks had virtually zero maintenance except to load new movies into the machine once a week. And the operating cost of it was a couple bucks paid to the stores where they were located. Most of the time, they were in grocery stores or WalMart, so you're not even making a trip to a dedicated movie place to get a movie. You just get one on your way out of the store. Convenience.
OnDemand content demand raises more as a result.
Sure, they had the option of PayPerView at home, but at like $15 a pop for something that might not start for another 3 hours and you still had to call your cable company to get it, only the most lazy people with more money than brains took that route. So I'm ignoring it.
So what did the studios & Blockbuster do about the rise of Netflix? They made RedBox and Netflix wait a month for new releases. But most people said "eh, whatever. I can wait." and still took the Netflix/RedBox route.
Then Hulu showed up. And for tv show content, that was a godsend. The past months worth of a tv show, online, so you can watch at your leisure? With minimal commercials? Yeah, you were watching tv on your computer, but it was only a minor inconvenience. It was still a total win. Yeah, their movie selection was absolutely attrocious, but that's what your $8 to Netflix was for.
But the networks & cable providers started seeing their live tv ratings drop. And when they drop, so do the ad rates that they can charge. So very quickly, the format for Hulu changed. More commercials were added. Longer commercials were added. Shows that had previously been on Hulu the next day started showing up 8 days later. Big budget shows stopped being made available. Where you had previously had a month or more worth of content available on Hulu, now it was only 2 weeks, and eventually, only 1 week.
The purpose of this was 2-fold. First, to force people back into watching live tv or using their dvr. Because then their ratings went back up and thus their ad rates could stay the same or go up. But secondly, beacuse the cable companies began noticing something... people were cutting the cord.
And the reason for cutting the cord was also 2-fold. First, because between Netflix (or to a lesser extent redbox), Hulu and some of the other smaller options, people were realizing that Lifetime, HGTV, MTV or the other cable channels just didn't offer enough can't-miss content that they could live without it. And the major networks were all available over-the-air. With either a standard antenae or an HDantenae. Unless you watched a lot of cable sports, you could generally live without it. And secondly, while content was getting cheaper and more OnDemand everywhere else, cable bills were steadily creaping higher and higher. Especially after the elimination of Extended Basic (ie. about 70 channel) packages. What used to be a $60/month cable bill is now over $100 because of this.
After deciding that the free (with some and then more and then a lot of commercials) wasn't a viable option, the Hulu Plus subscription was offered. It's basically old-Hulu but you have to pay for it. And you still get commercials during your shows & movies. And even that was acceptable for consumers. But the quantity of content has still steadily decreased.
All the while, the dvd collecting fad was dropping off. The economy took a nosedive. Now dvd wasn't a good enough format. BluRay came out. Then 3D BluRay. This all required more and more new hardware. Your old tv can't even handle BluRay. Now you have no choice but to switch to that HDTV for your living room just to watch a BluRay movie. And if you want 3D BluRay, you need an even higher quality tv. And the cost of the physical media was going up with each additional new technology.
VHS had a nearly 20 year life span. From the early 80's until as most recently as the mid 00's, you had stuff being still produced on VHS. DVD became affordable for the masses around 2000. Less than 10 years later, BluRay has all but replaced it. Less than 5 years later, 3D BluRay has replaced that.
The frequency of format changes has made adoption of these new technologies unaffordable. Updating your media library to meet these new formats is unaffordable. Instead, streaming content has become what the consumer wants instead. Let the content providers handle the hardware upgrades. Then stream it to you in the best quality format that your existing hardware can handle. If you have a 3D capable tv? Great... stream it in 3D quality. But if you only have a standard definition tv, then watching dvd quality is good enough too. All that is different is the density and compression of the data when it's shot from the provider to you thru the intarwubz. And it requires a single hardware upgrade for the providers instead of a hardware upgrade for every consumer of the content.
But see... this cuts into the inflated revenue of the studios, networks and cable providers. It cuts into their ad revenue. It cuts into their home media sales. It cuts into their bottom line. And they're going to do everything that they can to kill it, while ignoring the demands of the consumer. Because at the end of the day, the consumer still wants entertainment and if the only way they'll be given it is with an old buisness model of "watch this show at this time on this day or don't watch it without paying for a cable box with a dvr or paying for our OnDemand service", then they don't care. Because they think people will do it.
And honestly? Most people will. They'll bitch about it. But they won't do anything.
In January, Netflix content license with the studios expires and it's expected that the studios will either refuse to renew it, renew it at such a high cost that it would force a price hike of so much that it makes a service like Netflix cost prohibitive or refuse to license any content that any consumer actually wants to watch. Stuff like 70's and 80's flop movies that no one but the biggest cinematic masochist has any interest in seeing. The studios are too closely tied to the demands of the cable providers and they view Netflix as a threat to their bottom line.
I will tell you though, that this is going to end up backfiring on the networks, cable providers and studios. The less streaming content, the less people are going to be using a paying service to get it. They're going to go back to pirating.
3 years ago, I was ALWAYS downloading rips of tv shows the day after they came out because I hate being tied to a tv schedule. But with Hulu, I stopped. I'd deal with the handful of commercials, beacuse I could watch the whole previous month worth of episodes in 1 shot. But after the quantity of content went down and the quality of the remaining content went down as the networks abandoned it, I've either dropped shows entirely or slowly moved back into bootlegging.
People don't like physical media. Except maybe books (I still prefer to hold a book and physically flip pages over even an e-reader). But for their a/v entertainment like movies and music and tv shows, they want it on demand and they want it to not take up physical space. Streaming accomplishes that the best. But if that's not going to be what the companies are willing to go to, they're going to get bit in the ass with it. Pirating or bootleged streams are what people are going to go back to.
There's options out there with a mixture of moderately cheap devices and services that I'm considering if Netflix ends up as nothing more than a big cesspool of crap that nobody wants to watch and Hulu ends up void of anything but cheaply produced reality tv that would still allow me to cut the cord. But I want to wait it out a little longer and see how bad it's going to get.
But next thing you know, the cable/internet providers are going to start charging for tiered data packages or capping you so you can only stream so much and makes even that option prohibitive. Oh wait... they're already proposing doing just that....
Fuck you, media.
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