In the 80s, the video game industry was booming. And then it fell, and fell hard and fast. Too many games flooded the market, prices dropped, profits disappeared, and companies failed. The industry basically died and was restarted a few years later by completely different companies.
Could this happen again, but in a different industry? This week Disney announced that they will start a new streaming service and pull their content from Netflix. That’s fine if you don’t want Disney content. That’s also fine if you only want Disney content. Which, since it includes Star Wars, Pixar, ABC Television, and Marvel, is maybe just as likely. If you want it all, you’ll need both a Netflix and a Disney subscription.
There are already many popular shows on other networks that have exclusive distribution. HBO, Amazon, Hulu, Starz, and many more all have shows that are exclusive to their own services, or at least could be in the future. CBS is soon to premier a new Star Trek series that is exclusive to their online CBS All Access service. If you want to cut the cord and not use a cable provider, you may also need to choose between an Internet streaming service like the ones offered by Dish, DirecTV or YouTube.
In the near future, instead of a single cable TV bill, you may have to deal with a dozen streaming video services.
Do you now see where I am worried about the same time of market fragmentation that the video game industry suffered with in the 80s? Once people start spending more than $100/month combined on these services, competition will be fierce. Investment money may come in to let some of these streaming services run at a loss so they can cut their prices down to a few dollars. After a while, they may all be losing money as they compete for market share.
What will happen then? Will only a few survive? Will they buy each other out and we’ll just have two competing streaming giants (Netflix-Universal vs. Disney-HBO)?
Where do you think the future of TV is headed?