The streaming wars have continued to heat up, with more news on HBO Max, Apple TV+ and even Disney joining the fray. For months, tech journalists and experts have speculated on who will win the streaming wars; yet is there really a war going on?
The streaming services industry is not a real competitive market because of a single reason — exclusivity. You see, a real competitive market is about building better products to create a competitive advantage against your competitors. But buying the exclusivity right to a show has no function other than to make it illegal for your competitors to match you and that’s a serious problem. It’s like saying no one other than Apple can manufacture touch screen smartphones!
Each show is technically its own monopoly and when you add a monopoly to a functioning competitive market, that thing becomes a monopoly itself or technically an oligopoly — a market with limited competition. This is why streaming services are getting worst and annoying more and more people with each new “competitor” and why innovation in this market is so sparse compared to others. You can have all the amazing features in the world but it doesn’t matter if you only have like 10 shows on your platform.
That’s why competition within the streaming industry has purely been taking the form of fighting over exclusivity rights to as many of these “monopolies” as possible.
No one switches when they get another streaming service
As much as people tell you that all these streaming services are competitors, they’re not because by switching you actually lose the right to watch certain shows due to the exclusivity right. There’s no sense in switching from HBO GO to Netflix because Netflix is not legally allowed to provide you an alternative for Game of Thrones unless HBO lets them. This the derby part of intellectual property and why it’s a monopoly.
In order to get access to all those shows, you would have to subscribe to multiple services, hence by definition, they are not competing.
Abusing intellectual property laws
If you have exclusivity rights and you’re not doing the best you can for consumers, it’s already an abuse of your monopoly.
This is why I think streaming services are abusing IP laws because these exclusive rights mean each streaming server gets to be the only option for consumers for any given show. Rather than competing fairly by trying to build a better product, these streaming services monopolize individual shows in an attempt to get consumers to subscribe to their service too, not instead of.
An example would be when Disney decides to pull out all of its shows from Netflix for its new Disney Plus. And Netflix, of course, wouldn’t allow Disney Plus to stream its own original content as well. The result? Both services just got worse.
This shouldn’t be happening with true competition, yet none of the companies are trying to do right by consumers. So what we’re getting is multiple products rapidly declining in quality and a broken competitive market that is not inspiring any innovation.
The end of exclusivity?
I’m part of a growing group of people calling for an end to exclusives for this very reason but this comes with a couple of questions. One of the biggest concerns people have with this is that many people believe that if the streaming service itself makes the intellectual property, it should have the right to keep it in its own platform and that makes some sense.
“We sold our licenses to other streaming services because our service is so good that we know you’ll come to us anyway” — said no streaming service ever
But morally speaking, I don’t agree. I think the government has granted you a monopoly under the pretense that you’re not going to abuse it and tying it to a streaming service so that you don’t have to compete, I see that as abuse. If you want to manage both production and distribution then you should earn that from consumers by making both these things the best they can be and let us choose your platform over others.
The bleak future of streaming services
Slowly every big publisher is going to get into streaming service as they have already been beginning to do right now. Fox, Hulu, Netflix, HBO, Amazon, Disney. You can also expect DreamWorks, Sony Pictures and other movie companies to make their own. In the end, it will look a lot like cable TV with each streaming service having its own popular originals that they exclusively own.
Again, all these services are not competitors as you are going to want to watch something from most of them at some point. What this means is that you either subscribe to 10 services or you pirate and with 10 fucking services, piracy looks pretty appealing.
With this model, there’s no reason to believe that piracy won’t become more and more popular. With more and more people cutting their subscriptions, those originals will stop being as profitable because the overall convenience has died. This is how the market will collapse or at least run itself in the ground long enough to realize that this model has to change.
End exclusivity. I know that I’m repeating myself here but let me explain.
When you kill exclusives, you’re suddenly getting high demand shows on every streaming platform, and they have to compete based on innovation and product quality. But will this reduce the incentive for originals, resulting in lesser shows? Not necessarily.
Now consumers wouldn’t have to deal with multiple services resulting in better convenience, combine that with innovation and instead of piracy going up, it goes down and streaming services are pretty much a must-have in every household. This means that entertainment will be far more profitable than what it was before, resulting in a plethora of investors looking to make new hit shows to sell to streaming services. BOOM! You still get more shows even without originals.
Youtube is a good example of this. Back in the day, there wasn’t as much content on Youtube (just a lot of people on webcams), but the bigger Youtube got, the more you start to see high budget productions and lots of them.
“The bigger the audience, the higher the number of productions”.
I can’t be certain on what would happen if we ban exclusives but I know that it’ll definitely be better as that’s how true competition works. And if that sounds crazy, it shouldn’t. Have you ever wondered why you can find every movie in every movie theater? Well, it’s a result of a famous anti-trust case that dealt with a similar issue.
It used to be the case that the studios owned theaters just like how now the studios owned the streaming services and it led to a bunch of the same anti-competitive, anti-consumer issues. The anti-trust laws resulted in the studios having to split their business development and distribution entirely. Though as damaging as the anti-trust case to film back in the day, look at it now. It functions perfectly fine and there are plenty more movies now than before.
Maybe the solution is to just bite the bullet and simply break things up?