Netflix bought DVDs to ship out as rentals. Content providers had no say (first sale doctrine?).

Netflix then saw that streaming was going to eat the legacy physical-disc market and pivoted.

At this point, streaming was a new revenue stream. Most content provider money was still coming through cable/broadcast. So they said "Sure, we'll license you a bunch of stuff for cheap to do this thing we don't care about."

Streaming's growth led to it overtaking other revenue streams. At this point, content providers looked at the numbers and said "The main channel for eyeballs is getting our content for cheap. We should do something about that."

And then built their own streaming services, e.g. Hulu.

The biggest miss here seems to be by Google and Microsoft. Why, for the love of profit, didn't they say "Hmm, we have data centers, software expertise, and bandwidth... let's build a B2B streaming platform offering for content providers."

Now that industry is stuck in a situation where they wrecked their own income streams, and are scrambling to figure out how to re-create them.

This whole problem was one of the foundational issues behind the recent writer and actor strikes.

I think Netflix, Amazon and Apple were sort of that for a while, with all the deals they were cutting with production companies..

But in the end it was just Meet the new boss, same as the old boss..

At the end, it's the startup problem. Would you rather gamble all your money and get all the winnings? Or get a salary regardless of how things turn out?

Bear in mind that you’re talking about Ballmer-era mobile’s-no-big-deal Microsoft here, not Nadella-era reimagine-the-company-around-cloud-and-services Microsoft. That kind of smart strategic offering was never going to happen during the time period it would’ve needed to happen.

Netflix was started with streaming in mind from the outset. It's in the name, for one thing. They didn't pivot, (they only stopped their DVD mailing service this year, I believe,) they just started streaming as soon as the hardware, software, and network could be built up to a point where it was feasible financially.

Netflix was always intending to stream movies via the Internet. it wasn't possible when the company was founded, but streaming was the vision from the outset. they began the dvd-shipping service to build the company and bootstrap their way to the streaming service.

I've read this in multiple places, but I'm not going to do your homework for you.

> Disney’s streaming operation lost $512 million in the most-recent quarter, the company said, bringing total streaming losses since 2019, when Disney+ was introduced, to more than $11 billion. Disney+ lost roughly 11.7 million subscribers worldwide in the three months that ended July 1, for a new total of 146.1 million.

It seems unlikely they were losing money on the Netflix licensing deals.

I mean, if they're really losing half of a billion dollars per quarter, they'd need to do something like doubling their subscriber count to even approach breaking even. Is that really the case?

It looks like maybe WB is doing OK: https://www.hollywoodreporter.com/business/business-news/war...

But in general, Netflix was in a broad Silicon Valley sense profitable at the time (in that I don't recall and I'm not going to dig it out, but if they weren't profitable, they were in a growth mode and definitely pulling in revenue and choosing debt-for-growth, which isn't really the exact same thing as straight-up losing money), and the competition is losing billions at a time. That's not a "larger slice of the pie".

Maybe they'll make up for it later, but at the moment I wouldn't bet on all of them managing it. I actually think the recent Hollywood strikes were darkly funny; the writers were striking because they want a bigger slice of what they perceive to be that sweet, sweet streaming money, whereas almost all of the news about the actual streaming services is them losing billions. When the real numbers come out we'll probably hear accusations of more Hollywood accounting, and while there will be some truth to that (inevitably), Hollywood is already reporting huge streaming losses when it is actually against their interests to do so.

Though, I suspect this is Hollywood accounting so that they can avoid paying royalties.

Once they have to pay out more people based on streaming success, their incentives become more mixed. But at the moment, if anything I'd say their motivation would be to minimize their streaming losses.

A probably-dumb idea that I haven’t seen discussed anywhere: a federation of services (I pay $30/mo to the federation -- if I spend 2/3 of my time on Netflix and 1/3 of my time on Hulu, then Netflix gets $20 and Hulu $10)

I mean, sure, Best Buy evidently thinks this is the right time to exit physical media. They might be right. But "never coming back" seems like an a possibly overly confident prediction at a time when the major substitute causing the decline is on fire?

The previous physical media world existed without ad-supported and subscription based streaming / social media competition for eyeballs and vast majority of people are going to choose that v. buy physical media.

Of course we're not going to see that solution for many reasons.

D+ for a month is a lot cheaper than paying 20$ for The Last Jedi, but they are happy to take 20$ from you.

I thought that £7.99 for D+ was pushing it as there was a limit to the content that we wanted to watch.

Pay for that over multiple months, and you own nothing at the end.

Should have bought the discs instead. At least then I could continue to watch that content at leisure, without spending any more.

Prevent all exclusivity deals, and force identical pricing on all streaming platforms.

Do this, and we'll have competition for stability, and cost.

And it's 2023 ffs. There should be a backend deal, where you can watch anything ever made, and the streamer can on demand snag from the studio if rare. EG "Please wait 2 minutes, while we snag and cache super-rare content from studio X." This sort of dynamic arrangement should be so logical, but instead, I have 120TB of storage. All with rare, hard to get media.

Because the people that own it, won't make it easy to consume.. if they'll even keep it available.

In addition I'd add, force identical pricing for all TV/Movie actors auditioned for same role. All players same salary for same position in team. That will definitely change landscape for sports and entertainment business.

I just quietly download copies of media I may want to watch to an archive NAS so that they'll always be available when I want to watch them. I don't try and justify this to myself as a good thing; it's just the pragmatic thing I do because I don't like being at the whims of some publicly traded company or other (I've had WAY too much of that in my life). Most of my friends do the same.

Those MBA's are doing what they were hired for under a capitalist model. Their companies controlled IP's and those IP's are profitable outside of the Netflix umbrella, which ended up being true considering the success of Disney+, Hulu, etc. Of course now you're seeking a equilibrium. Will lower-tier offerings work like some no-name services or services with lesser content like Paramount? Maybe some players won't survive this, but that's also part of this model.

Not to mention nearly all these services opened with predatory pricing. Disney+ was not going to work at $7 a month, but it got people to sign up, maybe cancel with someone else without predatory pricing, and now Disney just needs to boil the frog to higher prices. Under capitalism these anti-consumer tricks are perfectly legal and oddly acceptable. It seems now we're in the stage of the capitalist entrepreneur cycle where predatory pricing is out the door, and everyone is clamoring to get to the price point that works. All the players who would make a streaming service already have, so this little masquerade can stop.

It just may be the case that your average US household can afford $150 in streaming services and everyone is just fighting to get that, which is close to what they paid with cable before streaming with inflation. This is the goal, not "lowering prices for good American families" and other dishonest marketing. If there's a $150 slice to be had per household, then capitalism will extract it. Or more, then people will revolt, cancel, and that will lead to price cuts and maybe some consolidation (say two weak services combine).

I find it amusing that Americans who claim to love capitalism, actually dislike what it does, and instead quietly pine for socialism without knowing the word or concept. "Hey why dont all these inefficient companies just combine already? With strong consumer protections? Under a non-dishonest marketing scheme where efficiencies and where they co-operate deeply to maximize value and lower prices?" That's not the system you live under. Instead companies will fight each other, steal marketshare, raise prices, etc and maybe there's efficiencies there, but often not, but what matters is learning what the consumer can pay, and charging her that exact maximum.

Which is what's happening here. No one but account sharers and college students etc are cancelling. Middle America isn't cancelling Disney or Netflix anytime soon. Maybe paramount or a weaker service, but everyone is in contention for that $150 and they're going to fight for it. It makes no sense under capitalism to consolidate back into a Netflix-like service. Its not going to happen again. Netflix was just capitalism getting there, but now that replicating the Netflix model got easier thanks to the cloud, these big IP holders just made their own.

Imagine asking "God I hate paying to the Disney parks, why don't universal and disney and MGM just make one big park with all their IP run by another profit-seeking entity?" That would be absurd to ask under capitalism, but people are asking this for streaming?

Predatory pricing is illegal, and the first sale doctrine is core to how capitalism works. Similarly, current copyright terms are laughably long.

The problem here is not capitalism, it is corruption: The US has laws that will not be enforced, or that have been modified via regulatory capture / bribery.

Had waving this with a vague "but but corruption" ignores the forest for the trees here. Not to mention your comment is provably false. Even the least corrupt capitalist states suffer from the exact same mechanisms and their own streaming prices are going up as well.

Look at music streaming. Music was a crusty old industry rife with nepotism and abuse of artists, where some big companies scooped up all the profit. It was heavily disrupted, but the artists and their agents were free to list their music on any service, no exclusivity required, the services were just conduits that took a small cut. Now, that's mostly the world we live in.

The problem with video is that a single artist with a computer can't usually make a complete season of a TV show or a marvel movie. It cannot be disrupted in the same way because content cannot be produced unless big players are involved, its just too cumbersome and expensive.

But you already see that it's moving to the music model anyway, more people spend time watching tiktok, Instagram and YouTube than they spend watching TV shows and movies. And, with compute becoming cheaper and AI generated this and that, soon it will be possible for a single artist with a good computer to make good content. The key thing here is that video content will move the way music content did, except the incumbent content producers will not make it to the other side, whereas with music they can.