Having more than one streaming service isn't a big problem, assuming they're priced reasonably. Going from one service with everything for $15 to ten services with a tenth of everything for $15 each isn't really that, but that's not the root of it.
Their problem is that people are going to want a single interface to view everything through. If you actually subscribe to three different services, you want to turn on your TV and see everything available to you.
The companies in the best position to do this are the likes of Google, Apple, Sony, Microsoft. Hollywood isn't too stupid to realize the dangers of that, but they're missing the obvious solution to it.
Publish a standard streaming API, so that anybody can make a streaming client, the same as anybody could make a VCR. Then the dominant consumer of the API won't be a big monopolistic corporation that will then be able to use its power against the movie producers, it will be a zillion different companies selling dirt cheap HDMI dongles with WiFi who each individually has no power at all. They'll all end up running whatever open source software somebody publishes to consolidate all the different services into one interface, which Hollywood could then improve themselves the same as any other open source project. It competitively atomizes a third party middle man that they don't want.
But it's basically the opposite of DRM. Security through clarity -- make everything open so nobody powerful can insert themselves between you and the viewer. Because big tech companies are more of a threat to them than The Pirate Bay. And they have to realize that before they're willing to do it.
Google's & Apple's TV interfaces do that now. Search for a show, it tells you which streaming apps have it, including a CTA to maybe buy / subscribe one you don't have. There is a recommended show stream on the front page for google that is service agnostic too.
Yes you still have to download and login to an app, but people are used to downloading and logging into an app for their phones already and it's only a 15 minute procedure every 5 years you buy a TV, if that.
99% (thin air statistics irrelevant) of the people won't save a copy of your stream and share it unless there's a dedicated GUI for it. The remaining, well, pirates gonna pirate.
As you said in more detail, they are fighting totally the wrong battle. It feels like an even dumber version of the war on drugs.
I mostly agree with this. I know you're talking about a single streaming service, but just to expand your point, for me, my single interface is Roku. From it I can access Netflix, HBO, Amazon, Hulu, and a ton of others - all with the same remote on the same TV. One of my favorite permaculture Youtubers even has his own Roku app/channel. I've been looking into creating my own Roku app and the process doesn't seem overly burdensome. You need video content, an HLS or MPEG-DASH streaming webserver (I'll use nginx and HLS), some json, and maybe something minor I can't remember now.
But I like your idea of a standard streaming API. If it actually happened the resulting ecosystem would be awesome.
(*) Regional restrictions may apply
I doubt that would remain the case indefinitely. There would be too much temptation to increase revenues once they were established.
Perhaps the question should be: what would the market look like if there were multiple providers, each of which had equal access to license content they felt best fit their customer base?
It's funny to think that the platform, which is pretty easily replicable, is nearly as valuable as the content.
Why should the content creators hand over all over the margins to Netflix?
Amazon has the best compromise for this IMO. Users have a single account and payment method, and can subscribe to different "channels" from the Prime Video app itself. Content owners don't need to license stuff to Amazon, just pay them a cut of the add-on fee.
What's ironic to me is that, movie piracy was steadily falling and effectively dead after Netflix launched their streaming-video platform, very similar to how video game piracy started to taper off as Steam gained traction. For a single low monthly fee you got access to movies from all the major networks, and a good selection of TV shows as a bonus. The networks started getting greedy - HBO Max, Paramount+, Disney+, Peacock, Discovery+, the list goes on - all wanting their own $5-$15/month cut on the action. It's a wonder why piracy has been back on the rise[0].
I agree that the quasi-monopolies of early Netflix or Steam through most of it's history are arguably bad, but the irony is that they're the most consumer-friendly ways to distribute media while effectively curbing piracy. The fragmentation of services; managing potentially a dozen subscriptions and the apps the accompany them, gets tiring for users who just want to sit down and watch Star Trek without hunting for it.
I'll throw in my two cents, that my personal experiences line up with this 100%. Before ~2010 when I was introduced to Steam I pirated virtually every game I played, but since then have only done so in very extreme circumstances. Similarly with music, as soon as Spotify, then Tidal were introduced to Canada, I haven't pirated a song since. Movies on the other hand, there was a several-year period where I didn't pirate a single movie- nobody I knew did anymore. In the past ~2-3 years I've been having people ask me about torrenting movies again, and I've caught myself doing it a lot more often than I would like to, but I just can't bring myself to spend $15/month on Netflix, $12/month for Disney+, $10/month for Crave, $6/month for Paramount+... While you can setup Radarr/Sonarr and Emby to accomplish the same for $0 (you could argue the cost of storage, but the $43/month saved on services gets you 3 brand new 4TB hard drives each year with money to spare).
[0] https://nymag.com/intelligencer/2019/06/piracy-is-back.html