I can’t stand all the freevee crap they have been forcing down our throats too. They pack a record amount of commercials into those movies and it’s all clunky when you pause and go back, or need to fast forward or rewind. Just wish there was better ways to get rid of the freevee crap, but if 2.99 gets rid of those ads too, I might be inclined to upgrade. I know it wil just be the stuff that has no ads now tho.
Everything gets worse because it starts off amazingly good, so there’s no where left to go but down.
In this case, most ppl had Prime for the shipping, and just got a free video service on top. It gave us a few great shows like, the Boys, Maisel, expanse, and probably a few others I’m forgetting.
I for one thank the VCs for all of the subsidized stuff. But now that era is over.
I’m definitely not buying this new thing or watching more Amazon shows (obv unless they put out a new show that is worth the ticket price).
But it was nice while it lasted
Relatedly, see how Uber prices have changed over the past few years. https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r...
It would be nice of they made a customer focused app for Prime Video (vs their decision to make one that incrementally maximizes revenue).
We came of age in streaming at a time when Netflix was a de facto monopoly and, importantly, monopsony. Its monopoly/psony was based on a technical moat: streaming was very challenging to pull off, and only Netflix had the technical talent necessary to make it happen.
Whether through the goodness of the hearts of those in charge or through fear of regulation, Netflix didn't do much to extract monopoly rents. But monopsony is generally treated much more lightly by regulators than monopoly, and Netflix extracted monopsony rents on those who made movies -- if they wanted to get money after theatrical distribution, they had to make a deal with Netflix, the end. Netflix extracted a monopsony rent and distributed it partly to themselves and partly to the end users.
Then the technical moat eroded as it became technically easier and easier to build the infrastructure necessary to stream movies. Movie makers (studios etc) were eager to end their dealings with a monopsonist, and they all jumped head-first into the bandwagon of making their own streaming service (Disney+, Paramount+, HBOMax being the Warner Brothers streaming service, etc.). They also saw that Netflix had a great business and wanted in on that money.
But the Netflix business was built on the monopoly/psony. The monopsony surplus being driven to consumers meant that prices were low for consumers and they stayed subscribed to Netflix, delivering Netflix an enormous audience. Post-technical moat, the audience fragmented, and it turns out that there are in fact fixed costs (mostly tax liabilities related to writing off the costs of making a movie) associated with maintaining a big library. Without the big audience and the monopsony surplus, the economics of streaming haven't actually been attractive at all, so now the streaming providers are all aggressively increasing prices/including ads to jack up the revenue stream.
Obviously, the end of free capital/rise of interest rates was also a factor in all this, but I think the monopsony story is the big one.
Everything everybody spent on cable + all ad revenue = cost of delivering cable + cost of producing all TV shows + profit
New equation:
Everything everybody spent on subscriptions + all ad revenue = cost of delivering subscriptions + cost of producing all TV shows + profit
So, "ad revenue" went from a big number to 0. "Cost of delivering" went from a big number to a small number. But the revenue went way down as well.
One solution would be to make less TV, but the industry obviously isn't a fan of that idea, so they are increasing your spend. If everybody gets on an average of 5 services and watches ads too the revenue will be similar-ish to the good old days of cable!
I've become a lot more really leery of "free" services, and a bit more okay with spending money when I think it makes sense. For example, I'm anti-Amazon Prime because I realize it's basically a huge loss just to get you into ordering more items from Amazon to keep their total revenue and usage high as they've diversified into even less savory business practices due to their market share. Tech companies over index too much on convenience because consumers want convenience. We should be okay with less convenience for a greater good.
Because people need bonuses and new boats. And I suppose I need my Amazon stock to appreciate too.
For those unaware, you can spin up your own direct-to-consumer streaming subscription business in a box (assuming, of course, you have sufficient content to entice viewers) with https://vimeo.com/ott . Perhaps the best known brand using them is Dropout TV (formerly CollegeHumor) - see https://www.dropout.tv/copyright .
At a lower level, Cloudflare, mux.com, and others provide streaming and transcoding APIs that a small team of developers can easily weave together for a custom experience.
There is literally zero barrier to entry for a media company to have all the capabilities of Netflix, if they can bring their own customers and marketing. Which, of course, is no small feat, and requires playing in social media sandboxes. But it's increasingly hard to understand how Netflix has the staying power of the rest of FAANG.
Because profits tend to fall over time [1] so to keep profits the same (let alone increasing) revenue have to go up and/or costs have to go down. More evenue can be higher prices, more subscribers, etc. Lowering costs can mean paying less in licensing, paying people less, employing less people, etc.
This was one of Marx's key observations of the inherent contradictions in capitalism.
[1]: https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...
What we see here is prices rising, in a landscape which is becoming more competitive.
As for the streaming space, it honestly isn't that competitive. There aren't that many players. If anything, what we're seeing here is price leadership (which is price fixing and collusion but, you know, legal) Netflix raises their prices $2/month and weirdly Hulu, Disney and Max all follow suit. Strange how that works.
We saw the exact same thing with cable: bundling channels to maintain profits, channels charging more, increasing prices to counter losing customers, etc. And why were the channel prices going up to the cable TV providers? The exact same set of reasons relating to falling profits.
There's something to be said about the idea of not allowing content companies to own distribution...