With higher prices, more ads, and unwanted bundling it really seems like streaming is becoming dangerously like cable. Last year alone, all of the major names in streaming — Netflix, Hulu, Disney Plus, Max, Apple TV Plus, Paramount Plus, and Peacock — have raised their prices. This all leads to one big question: is there an end in sight to this streaming hellscape?
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TechTranscript
00:00 [MUSIC PLAYING]
00:03 What does your Netflix queue look like right now?
00:06 Mine's got "Killing Eve" on it, which was an awesome show
00:09 that I adored when it premiered on AMC in 2018.
00:13 It's got "Brooklyn Nine-Nine," another fantastic show
00:16 that I really loved when it premiered in 2013 on Fox.
00:20 And here's "Monk."
00:21 "Monk" is awesome.
00:22 I love "Monk."
00:23 Tony Hulu, ugh.
00:24 But also, that premiered in 2002?
00:27 That's a lot of my Netflix right now.
00:29 It kind of looks like cable.
00:31 And that seems like a problem to me,
00:33 because the last time TV looked like this,
00:35 I was looking to cut the cord.
00:37 So it got me thinking, why is streaming turning into cable?
00:41 How do we get there?
00:42 And is there any hope for us to get out?
00:44 [TAPPING]
00:47 OK, so to understand things, first we
00:48 need to take a quick trip back to 2007,
00:51 because the movies were popping, but piracy
00:53 was kind of out of control.
00:54 Like, remember all of those commercials
00:56 at the theater about, you wouldn't steal a car?
00:58 That was 2007.
01:00 But also in 2007, Netflix was doing
01:02 something really interesting.
01:03 They had their really successful DVD business,
01:06 but they had noticed that a lot of people were tired of DVDs.
01:08 They wanted things faster, quicker.
01:10 And so they launched their own streaming service.
01:13 And it worked.
01:14 Netflix started doing really well.
01:16 They had "House of Cards" and "Orange is the New Black."
01:18 They started winning Emmys.
01:19 They started having huge pop culture phenomenons,
01:22 like "Stranger Things" and "Bridgerton."
01:24 They were even winning Oscars for major motion pictures.
01:26 As they became this massive titan
01:28 of the entertainment industry, other streamers
01:31 started following suit.
01:32 We got HBO Max, which became "Max."
01:35 And we got CBS All Access, which became "Paramount Plus."
01:39 We got Peacock, which thankfully never changed its name.
01:42 We even started to get really niche, weird little streaming
01:45 services.
01:45 My personal favorite was DC Universe,
01:47 which was only DC Comics and shows based on DC Comics.
01:52 I really miss Swamp Thing.
01:53 There was just something for everybody.
01:55 Bob Iger, who I think at the time
01:58 was the former CEO of Disney, but is now, again,
02:01 the current CEO of Disney, said he looked out at streaming
02:04 and realized that there was a possibility
02:06 for just infinite content.
02:08 And infinite consumption.
02:10 Basically, anything you wanted to watch
02:12 when you wanted to watch it.
02:13 And he thought that was a wonderful idea.
02:15 So he at Disney and a whole lot of other streaming companies
02:18 started to make a lot of content.
02:20 They started to try to realize infinite content.
02:22 Infinite content.
02:23 But all of that was actually fueled by the fact
02:26 that we had 0% interest rates throughout the industry.
02:29 So it was really cheap to borrow money
02:31 to make all of this content.
02:33 But then the interest rates went up,
02:34 and everybody started to want their money back.
02:36 Specifically, shareholders who had
02:38 invested a lot of their own cash.
02:39 So they need to make money.
02:40 How do you make money?
02:41 Well, there's two ways.
02:43 Advertising.
02:44 Advertising just makes money.
02:45 It's how broadcasting has worked for 50 years.
02:47 And the other was subsidies.
02:49 And that one's actually a little confusing.
02:51 So hold up a second.
02:51 We're going to get to that.
02:52 First, let's talk about the ads.
02:54 [MUSIC PLAYING]
02:56 OK.
02:57 So the ads.
02:58 Netflix introduced them back in-- what was this?
03:01 November 3, 2022.
03:04 And since then, they've done a lot of work
03:06 to make sure that we watch those ads rather than just
03:09 pay a subscription and get straight into "Bridgerton"
03:11 season 3.
03:12 It's sick as hell, guys.
03:14 And to be really clear here, Netflix
03:15 wants you to watch the ads.
03:16 That's why the cheapest tier is $6.99.
03:19 And the next cheapest tier without ads is $15.49.
03:22 More than double the cost.
03:24 Because those ads make Netflix a lot more money
03:27 than your subscription.
03:28 Why is that?
03:30 Well, it's because those ads are super hyper-focused in a way
03:33 that cable and broadcast TV ads can't be.
03:36 When I go and I turn on my TV and I
03:38 try to watch "Grey's Anatomy," they
03:40 know that I live in New Jersey and I'm watching "Grey's
03:43 Anatomy."
03:43 That's all the broadcasters know about me.
03:45 When I go and I try to watch "Grey's Anatomy" on Netflix,
03:49 they know that I also watched "Killing Eve" earlier.
03:51 I just finished "Dead Boys Detectives" last night.
03:53 And it was great.
03:54 They know a lot of information about me,
03:56 which means they can target me a lot better.
03:58 Which means Netflix can charge a lot more for those ads.
04:01 Because those ads are way more lucrative.
04:03 And it's not just Netflix.
04:04 Like, Amazon Prime now charges you-- what is it-- $2.99 a month
04:09 just to skip ads?
04:11 Max has ads now.
04:12 Peacock and Paramount actually introduced ads
04:15 from the very beginning.
04:16 Same with Hulu.
04:16 And it's no mistake that those are also
04:19 all the companies that came from broadcast TV.
04:21 They always knew the inherent business of television
04:24 is in advertising.
04:25 It just took Netflix and Amazon and some of the others
04:28 a little longer to catch up.
04:30 Which is also why "Killing Eve" is on Netflix's top 10
04:33 right now.
04:34 And it's why a lot of these older shows
04:36 are popping up again.
04:37 Because those older shows are cheaper for Netflix
04:39 to license.
04:40 Which means they get a lot more of your advertising dollars
04:43 for every minute that you watch the show.
04:45 Versus something like "Bridgerton,"
04:46 which is really, really good, but a lot more expensive
04:49 for Netflix to make.
04:50 It's also why fast TV is becoming such a thing.
04:53 Fast TV, for the record, is free, ad-supported television.
04:57 It's basically all of the reruns just on demand.
05:02 And you can go and you can watch 12 hours of "I Love Lucy"
05:06 without hitting pause.
05:07 You see it everywhere.
05:08 Tubi, Pluto, even Disney is exploring
05:11 some always-on channels.
05:12 Again, Peacock and Paramount, they've
05:14 been doing this for ages.
05:16 But they also understand the game, I think,
05:19 a lot better than a lot of the other streamers do.
05:21 So yeah, streaming is effectively
05:22 becoming an advertising business, which
05:25 is also what cable was.
05:27 But another thing that streaming is doing now
05:28 is the same as what cable was doing,
05:31 which is bundling stuff you don't want with stuff you do.
05:34 Let's talk about those subsidies.
05:37 OK, when I talk about subsidies, what do I mean?
05:40 Well, in the cable days, let's say
05:42 I really wanted to watch "FX."
05:44 But the cable company would say, OK, you get "FX,"
05:47 but you also have to pay for Fox Sports.
05:49 And I don't really want Fox Sports.
05:51 The same thing is happening now.
05:52 Netflix, I think, spent, what, $5 billion on WWE rights
05:57 because they really want to get more audience.
05:59 And they think having WWE will bring in that bigger audience.
06:03 That's also why Amazon Prime has Thursday Night Football,
06:06 which I didn't even know was a thing because I don't watch
06:08 sports.
06:09 These companies really want to figure out as many ways
06:12 to get audience as possible, including with sports.
06:15 And that's also, unfortunately, why your subscription fees
06:18 are going up because they need your money,
06:21 but they also need your money to subsidize all those sports.
06:24 And that brings us to today, where, unfortunately, we
06:27 are paying way more for our subscriptions.
06:29 We're watching a lot more ads while we do it.
06:31 And we're subsidizing a bunch of content
06:32 we don't want to watch, just like we were in 2007.
06:35 But just like in 2007, I do think there's some hope.
06:40 Back in 2007, Netflix came along,
06:42 and it made watching TV a lot easier.
06:45 And I think there's actually some cool technology coming
06:48 along that's going to do the same now, I hope.
06:50 First, I'm going to have to pause a moment
06:53 because this stuff is about to get really, really geeky.
06:58 I'm going to talk about something called ATSC 3.0.
07:01 And I know your eyes just glazed over.
07:02 Stop.
07:02 This is cool, I swear.
07:03 ATSC 3.0 has a horrible name, but it
07:06 is a really, really interesting broadcast standard.
07:09 I know, no, no, broadcasting standard.
07:10 That sounds stupid.
07:11 But don't worry.
07:11 It's cool.
07:12 What it means is that more information is streaming
07:15 directly into your TV over the airwaves.
07:18 No additional money to your ISP, no additional equipment
07:22 on your TV, provided it has a tuner that works with ATSC 3.0,
07:26 which a lot of newer TVs have.
07:28 So it's OK.
07:29 A lot of people are probably judging me right now.
07:31 Don't judge me.
07:32 It's cool.
07:33 So what does ATSC 3.0 actually mean?
07:35 Well, if you can get past all those letters and numbers,
07:38 it effectively creates a DVR on your TV.
07:43 Again, no additional equipment required.
07:45 And that's really sick, because if you have a DVR in your TV,
07:48 that means you can just sit down and start
07:50 watching the news whenever, instead of having
07:52 to sit down at exactly 6 o'clock to watch a 6 o'clock news.
07:56 I know you all do that.
07:58 But eventually, there's a lot more potential,
08:00 because some companies, like one called Roxy,
08:03 are actually shipping apps over the airwaves.
08:06 And right now, it's just a weird little music app.
08:08 And it's got some karaoke built in.
08:10 But imagine if NBC did that with Peacock,
08:12 or CBS did that with Paramount+, or Disney did that with ABC.
08:17 Imagine if you had Disney+ on your TV.
08:21 That would be pretty sick, right?
08:23 But yes, the big caveat about ATSC 3.0
08:26 is that it's taken a long time to get to where it is.
08:29 So it might not necessarily be the technology that saves us
08:32 from our streaming hellscape.
08:33 But it's one type of technology.
08:34 It could be some other kind of technology, because as of 2007,
08:38 when people get tired, they start looking for new ways
08:41 to get the content.
08:42 That's why piracy is on the rise again.
08:44 When that happens, someone inevitably
08:47 comes in to disrupt the market and change things.
08:50 In 2007, it was Netflix.
08:52 In 2024, it could be ATSC 3.0.
08:55 Or it could be some whole other new technology or new company
08:58 with a really big idea on how to get you to watch content
09:02 without necessarily having to pay a ton of money
09:05 to a whole bunch of companies.
09:06 Are you also fed up with streaming prices?
09:09 Are you also a fan of ATSC 3.0?
09:12 I need to know.
09:13 Please let me know.
09:14 Everybody rise up.
09:15 Sound off in the comments.