Streaming Sector Determined To Become Just As Shitty As 1990s Cable — Thanks to industry consolidation and saturated market growth, the streaming industry has started behaving much like the traditional cable giants they once disrupted. As with most industries suffering from “enshittification,” that generally means steadily worse service at higher prices as it tries to appease Wall Street’s demand for improved quarterly returns at any cost (even long term company health).
Netflix has started acting like password sharing, something it advocated for for years, is a cardinal sin. Amazon decided it would be fun to increase the number of ads it runs, charging Amazon Prime users even more money to avoid them. Consumers are paying more for streaming than ever as layoffs abound, streaming catalogs shrink, and the underlying products steadily get worse.
That’s before you get to the mess that is Warner Brothers Discovery, which has been putting on a master class as to why pointless media mergers are generally a bad idea. The company has been laying off employees, raising prices and degrading product quality left and right as it attempts to recoup merger debt. That has included killing off brands (like HBO) long popular among consumers.
Last week, the company informed subscribers of its standard $16 per month (or $149.99 per year) ad free plan that they’d be losing several features, including the number of simultaneous households streams users can view, and ability to stream 4K content. Those features are being shoveled into a new more expensive, Ultimate Ad-Free $19.99 per month plan (or $199.99 per year).
Sudheer Sirivara, EVP of global technology platform at Warner Bros. Discovery, utilized peak corporate speak gibberish to justify the moves:
“We understand the value of offering our users a cinematic playback experience and to that end, we’ve implemented more advanced technology workflows that allow us to release more 4K content in a faster, more efficient way.”
In reality, they’re creating an annoying new pricing funnel so that users have to pay for the most expensive tier possible to get fairly basic functions like 4K.
To be clear: streaming still has a value advantage over cable, for now. The lower costs, plus the ease in cancelling and restarting services, has been an overall net advantage over shitty old cable bundles. But streaming sector executives seem absolutely dedicated to pushing their luck, meaning they’ll absolutely be taking the same disruption ride cable executives enjoyed.
It’s clear the sector wants to further consolidate, reduce competition, and continue to raise rates hand over fist. That will continue to result in more restrictions and strange fees, worsening catalogs, lower-quality offshored support, and more layoffs. Through the lens of Wall Street myopia, it’s simply not enough to have a quality product people like; resulting in inevitable quality cannibalization.
The end result are companies that are financially conditioned to implode if necessary to provide improved quarterly returns over the short term. And executives poised to learn absolutely nothing from the sector’s long history of tone deafness, opening the door to further disruption from the likes of TikTok (and most notably, piracy) as the cycle continues…