- Right now, we're living in a golden age
of streaming services.
For $15 a month, one service can give you access
to basically endless movies and shows,
with new offerings coming in every week.
But enjoy it while it lasts, because wheels are already
in motion to make those services more profitable
for companies, and worse for you.
Someday soon, to get the same amount of content
you're getting now, you're gonna have to pay
for more streaming services.
(introspective music)
So think about all the content on a service like Netflix,
and where all of it comes from.
A lot of what you see is made by Netflix,
but most of it's not,
whether it's network TV shows, old movies,
or movies that were just in theaters.
A study last year found that licensed content makes
up 80% of what people actually watch.
Netflix pays to license that content from the studios,
and it's a big part of their business.
Access to the streaming market is important
for studios, too, because streaming media is
where the viewers are.
Netflix added 30 million US subscribers
in the past five years, and that's coming at a time
when traditional cable
and broadcast TVs have less viewers every year.
But licensing to Netflix, Hulu,
and the other services isn't the only way
for studios to get their movies online.
Next year, Disney plans to launch its
own streaming service, a direct competitor to Netflix.
Disney's a little late to the party,
but the service will have so much popular content
that it may not matter.
Remember, Disney owns Pixar, Marvel, Star Wars,
and 21st Century Fox, along with more than 90 years
of beloved movies and TV.
The bad news is, if it's on Disney's new service,
it doesn't really make sense to put it on Netflix, too.
Once Disney's current licensing deals expire,
Coco, Guardians of the Galaxy, and Last Jedi are
all probably gonna disappear
from the other streaming services.
It's a simple business move.
Why would Disney put Last Jedi on Netflix
when it can put it on Disneyflix
and make you pay another $15 a month for it?
Even if Netflix offered to pay more money in licensing,
Disney would rather have you watch
their movies on their service.
Disney is actually really good at making money
when distribution methods change.
If you look at the history of the company,
they've done it over and over again.
When VHS and DVDs became popular,
Disney pioneered a system called the Disney Vault,
where movies would be locked away for years,
and only made available for lucrative, limited-run sales.
- [Narrator] All these magical Disney videos
before they disappear.
- Whether you love or hate the vault, it worked.
A study in the year 2000 found that 55% of Disney fans
replaced their VHS tapes with DVDs,
compared to only 14% for other studios.
Cable expanded the playing field even more.
Initially, Disney licensed its content to HBO,
but soon they realized that the real money was
in running their own channel.
So the Disney channel was born.
Last year, Disney made 40% of its money
from cable channels, including the ABC networks and ESPN.
And as cord-cutters move away from cable,
towards services like Netflix, Disney's trying to pull
off the same trick with streaming video,
using its massive content library
to build a whole new service from the ground up.
Now, Disney's not the only studio trying to do that.
Comcast has its Xfinity streaming service,
Time Warner has HBO Go.
The only way to see the latest Star Trek series is
by paying six dollars a month for CBS All Access.
Everybody's vertically integrating,
which means there'll be less
and less third-party content available to license.
If you wanna follow all the movies and shows,
you'll have to pay for all the services,
and there'll be more and more of them to pay for.
If you've noticed a lot more Netflix Originals lately,
that's why.
If you can't find Star Wars or Iron Man on Netflix,
executives are betting you'll stick
around for Stranger Things and BoJack Horseman,
just like you stuck with HBO for Game of Thrones.
So if you follow a bunch of streaming services now,
you might soften the blow by borrowing the password
from your parents or friends, but
that could be in danger, too.
Streaming services can shut
down account sharing anytime they want.
Just look at Spotify,
where sharing accounts is nearly impossible.
Netflix is slowly cracking down on account sharing, too,
adding distinct profiles, and stopping
any profile that streams multiple shows at once.
As the industry matures, those rules are gonna tighten,
and it's gonna get harder and harder
to dip into a service without paying for it.
Now, for corporations, this is about the money.
Disney paid four billion dollars for Star Wars,
and they wanna make that money back as fast as they can.
But all that leaves the general interest fan
in a tough place.
Do you stick with a single streaming service,
and miss out on the next wave of Marvel movies?
Is the new Star Trek really worth six dollars a month?
We don't know what the future
of streaming will look like, yet.
The transition away from licensing could be jarring,
or it could happen slowly, over years.
Competition between the new services
could inspire a new golden age of TV shows,
or everyone could fall back on old tricks
and familiar franchises, but whatever happens,
the pipeline between the camera
and your screen is gonna get a lot more controlled,
and if you want the same amount
of content you've been used to,
you're gonna have to pay more.
Thanks for watching, I hope you liked it.
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