4 ms·

The dream of cheap streaming television will always stupid. Given that there's zero marginal cost to distributing content, "unbundling" doesn't ultimately redu

by s17n 7y ago

The dream of cheap streaming television will always stupid. Given that there's zero marginal cost to distributing content, "unbundling" doesn't ultimately reduce providers' costs at all (of course it's not quite this simple, you have several players involved in providing content - studios, cable operators, aggregators like netflix, etc - but in the long run these details don't matter). So given that the costs of production haven't been lowered, why would anybody expect the cost to the consumer to decrease? On average they should remain the same. Maybe everybody expected to be on the lucky side of average? Or maybe people just hadn't thought this through at all.

freddie_mercury 7y ago
> So given that the costs of production haven't been lowered, why would anybody expect the cost to the consumer to decrease? This was the part of the story I never understood. There seemed to be some sort of implied "and then VCs will subsidise things until everyone permanently accepts lower profit margins in order to lower costs". Which just didn't seem like a terribly plausible sequence of events. It kinda reminds me of how everyone thought e-books of the latest Harry Potter should cost $1 (compared to a more expensive print book) and, surprise, it didn't work out that way either.
- village-idiot 7y ago
  Turns out that physical books and DVDs were a minuscule part of what made books and movies expensive. Who knew?* * Lots of people knew this.
  - TeMPOraL 7y ago
    And a lot of people didn't. It's hard to internalize how cheap matter is at scale. For a long time I really did think most of a book's cost is in printing. I still catch myself assuming a random product is expensive because of its manufacturing; it's a hard habit to kick.
- SubiculumCode 7y ago
  Well, i would have assumed that part of the price was mo opolistic behaviors by cable.
  - Mindwipe 7y ago
    Which prices being similar in every developed country in the world where there is plenty of competition should have clued you in to not being the case.
    - SubiculumCode 7y ago
      Maybe not on a per content basis, but for the monololith cable packages
- TeMPOraL 7y ago
  > "and then VCs will subsidise things until everyone permanently accepts lower profit margins in order to lower costs". Which just didn't seem like a terribly plausible sequence of events. Isn't it quite literally the exact thing Uber successfully did to taxi markets worldwide?
  - blihp 7y ago
    They only do that as a short term move to grab market share and put weak competitors out of business. Generally that's just a phase in the early days and eventually prices start creeping up, often higher than they were before.
hakfoo 7y ago
What streaming could enable is more diverse niche channels. If you've got a second-or-third tier channel, you're not setting your own price. You're a "for 8 cents more per subscriber, we'll also add this" sidebar in the ESPN contract negotiations. This probably puts you in poor control of your economic fate. If you go ad-supported, eventually the marketing sector will realize that individually-addressed, anayltics-slathered and highly categorized eyeballs on digital are worth more than the pig-in-a-poke eyeballs of advertising on traditional broadcast. It might require developing centralized inventory and selling systems, but it's coming. A good example of this is the anime market. It's funny to look at all the ads slipped into old products: "pester your cable company to carry (long defunct anime channel #229)" Crunchyroll can go direct to consumer and control its own pricing and accessibility, and it's at least treading water despite a market thart's undergone major deflation from its peak.
dfxm12 7y ago
So given that the costs of production haven't been lowered, why would anybody expect the cost to the consumer to decrease? Competition. For many in the US, their cable company had a monopoly on television, so their TV bill was unnaturally high. For a personal anecdote, <streaming video service> + Internet is cheaper than cable + Internet for me. I've seen my cable provider try to win me back with discounts, but the discounts aren't good enough. Is it "cheap" in absolute terms? I don't know where that bar is set. I don't mind what I'm currently paying though.
- rhino369 7y ago
  Cable never really had a monopoly. There were always at least two satellite providers. And since the early 2000’s, the local telecoms have offered to a large part of the country. Every place I’ve lived in has had 4 options since 2005. They all offered the same channels and mostly competed on price.

by s17n 7y ago

freddie_mercury 7y ago

> So given that the costs of production haven't been lowered, why would anybody expect the cost to the consumer to decrease? This was the part of the story I never understood. There seemed to be some sort of implied "and then VCs will subsidise things until everyone permanently accepts lower profit margins in order to lower costs". Which just didn't seem like a terribly plausible sequence of events. It kinda reminds me of how everyone thought e-books of the latest Harry Potter should cost $1 (compared to a more expensive print book) and, surprise, it didn't work out that way either.

village-idiot 7y ago
Turns out that physical books and DVDs were a minuscule part of what made books and movies expensive. Who knew?* * Lots of people knew this.
- TeMPOraL 7y ago
  And a lot of people didn't. It's hard to internalize how cheap matter is at scale. For a long time I really did think most of a book's cost is in printing. I still catch myself assuming a random product is expensive because of its manufacturing; it's a hard habit to kick.
SubiculumCode 7y ago
Well, i would have assumed that part of the price was mo opolistic behaviors by cable.
- Mindwipe 7y ago
  Which prices being similar in every developed country in the world where there is plenty of competition should have clued you in to not being the case.
  - SubiculumCode 7y ago
    Maybe not on a per content basis, but for the monololith cable packages
TeMPOraL 7y ago
> "and then VCs will subsidise things until everyone permanently accepts lower profit margins in order to lower costs". Which just didn't seem like a terribly plausible sequence of events. Isn't it quite literally the exact thing Uber successfully did to taxi markets worldwide?
- blihp 7y ago
  They only do that as a short term move to grab market share and put weak competitors out of business. Generally that's just a phase in the early days and eventually prices start creeping up, often higher than they were before.

hakfoo 7y ago

What streaming could enable is more diverse niche channels. If you've got a second-or-third tier channel, you're not setting your own price. You're a "for 8 cents more per subscriber, we'll also add this" sidebar in the ESPN contract negotiations. This probably puts you in poor control of your economic fate. If you go ad-supported, eventually the marketing sector will realize that individually-addressed, anayltics-slathered and highly categorized eyeballs on digital are worth more than the pig-in-a-poke eyeballs of advertising on traditional broadcast. It might require developing centralized inventory and selling systems, but it's coming. A good example of this is the anime market. It's funny to look at all the ads slipped into old products: "pester your cable company to carry (long defunct anime channel #229)" Crunchyroll can go direct to consumer and control its own pricing and accessibility, and it's at least treading water despite a market thart's undergone major deflation from its peak.

dfxm12 7y ago

So given that the costs of production haven't been lowered, why would anybody expect the cost to the consumer to decrease? Competition. For many in the US, their cable company had a monopoly on television, so their TV bill was unnaturally high. For a personal anecdote, <streaming video service> + Internet is cheaper than cable + Internet for me. I've seen my cable provider try to win me back with discounts, but the discounts aren't good enough. Is it "cheap" in absolute terms? I don't know where that bar is set. I don't mind what I'm currently paying though.

rhino369 7y ago
Cable never really had a monopoly. There were always at least two satellite providers. And since the early 2000’s, the local telecoms have offered to a large part of the country. Every place I’ve lived in has had 4 options since 2005. They all offered the same channels and mostly competed on price.