The lifecycle of television, and the potential return of cable

netflix streaming photo illustration


At its advent, cable television was supposed to be the end all, be all for home entertainment. Hundreds of channels at your fingertips, providing content for every demographic. In 2007, a growing company called Netflix introduces a streaming service addition to their by-mail DVD rental service. It’s broken, almost doubled monthly service costs, and offered a very small library of only 1,000 titles. To pull a quote from a 2007 New York Times article, “The market [for streaming] is microscopic,” [Netflix’s Chief Executive, Reed Hastings] said. “DVD is going to be a very big market for a very long time.”

Despite initial doubts, by 2010 Netflix had grown to be the highest source of streaming traffic in North America. In 2011, Netflix announced that their streaming and DVD services were being separated into two companies, but quickly reversed their decision due to high volumes of customer complaints. Finally in 2012, Netflix spun off, finally severing the ties between the DVD and streaming sides of the service. As of Q3 2017, Netflix’s 109 million subscribers dwarves’s 3.57, proving Mr. Hastings, very, very wrong.

In the United States alone, Netflix has a whopping 50.85 million subscribers, just eclipsing the 48.61 million combined subscribers of the top six cable companies in America.

Without knowing any of the previously mentioned statistics, Netflix’s popularity is no secret. You’d have a difficult time finding someone who hasn’t used it at least once before. As far as home entertainment is concerned, it would seem like we have reached a golden age.

Netflix is not only destroying cable television, but it’s also been a major factor in the reduction of piracy. According to research data provided by Sandvine, since Netflix and other streaming services really began taking off, a noticeable drop-off occurred in peak BitTorrent traffic. In 2010 Netflix and other streaming services took up 30% of peak internet traffic, and BitTorrent piracy took up a massive 8%. In 2015, when the study took place, streaming service peak traffic jumped up to 61%, and piracy streaming down to 3%. While it was just a 5% drop, it was still a massive victory, and showed that the rise of streaming services has had a significant effect on piracy.

Piracy, be it music, movies, or video games, for the most part has always been about the convenience of obtaining the item. Services like Steam have made downloading PC video games, a huge target of online piracy, extremely simple to download, and has them priced in a way that doesn’t break the bank. Spotify offers a huge library of music to listen to, entirely free. Netflix has a catalog with plenty of movies and popular television shows such as “The Office,” “It’s Always Sunny in Philadelphia,” and “How I Met Your Mother,” that more than justify the monthly cost of using the service for many of its subscribers.

In 2017, online piracy is not the most difficult task, but it certainly isn’t easy either, or a guaranteed way to successfully download a usable product. It can take a great deal of time to download, depending on the torrent’s popularity, and once it’s downloaded, you may discover that the movie you wanted is in Russian, or recorded on a flip phone in a movie theater. However, if a show or movie is available on Netflix, the combination of the low monthly price, and extensive lineup of other television shows and movies may potentially discourage piracy of the product. And according to the research done it by Sandvine, it seems to have done just that.

But for how much longer will Netflix have these shows? As contracts with Netflix expire, production companies such as 21st Century Fox are making no effort to renew them, instead contracting a deal with Hulu or another service.

“So what? Big deal, I’ll just subscribe to Hulu as well so I can keep watching Futurama. Hold on a second, Doctor Who isn’t on Netflix anymore either. I guess I’ll get an Amazon Prime subscription as well. Cool, there’s a lot of HBO shows on Amazon Prime as well, let’s watch Game of Thrones. Looks like I need pay $14.99 a month for the HBO add-on for Amazon Prime.”

At the lowest standard pricing available, to stream in high definition on all four services, you would face a monthly cost of $42.22, or roughly $500 for a whole year.

Netflix, Amazon, and Hulu have also all made a shift to focus on producing and licensing original content, instead of hosting tv and movies from other production companies. During this shift, other companies have realized that they can cash in on the streaming service boom as well. CBS All Access has popped up recently, offering Star Trek Discovery exclusively on their service. Despite recently making a deal with Netflix good through 2019, Disney has announced that they will be removing their content from Netflix, and launching their own streaming service shortly after. Even Google has tried to cash in by creating the lackluster YouTube Red service.

If this feels familiar to you, it should. Where streaming services used to be an alternative to packaged cable deals, a chance to cut the cord with notoriously anti-consumer companies like Comcast or Time Warner Cable, it’s only a matter of time before streaming becomes exactly like cable was.

I’m no market expert, but there is little doubt that in no time at all, companies will begin offering packaged deals for streaming services, turning Netflix and Hulu into little more than glorified on demand channels. The packaged deal will seem like a fantastic deal at first, until prices begin to rise again, leaving the consumer in the exact same place they were when they decided to ditch their local cable provider.

One thing is absolutely clear, the golden age of streaming is nearing its end, and as per usual, the average consumer will be hurt the most for it. So where does that leave us? As this vicious cycle begins again, piracy will almost certainly increase again, but perhaps even worse than before, in this increasingly digital world we live in.