Editor’s Note: At a quarter of this century, TribLive looks ahead to the next 25 years, using the events of the last 25 years as a road map of what is possibly to come. This episode of an occasional series focuses on entertainment.
Twenty-five years into the 21st century, it’s clear how much home entertainment has changed:
• Reality TV has pushed aside scripted programming and is becoming even more prevalent as media companies cut spending on broadcast networks with declining viewership.
• Streaming finally gave consumers what they had long said they wanted: the ability to choose a la carte channels of professionally created content from individual streaming services, driving many one-time subscribers to cable to cut the cable cord.
• Viewers have abandoned professionally created entertainment to embrace the work of amateur content creators found on streaming services, from YouTube to TikTok.
Michael D. Smithprofessor of information technology and public policy at Heinz College and Carnegie Mellon University’s Tepper School of Business, points to Netflix’s decision to commission original programming with “House of Cards” in 2013 as a pivotal moment. The move spurred an explosion of original scripted programming, which went from about 349 original scripted shows per year in 2013 to a peak at 600 in 2022.
“The crazy thing is that Hollywood (in 2013) completely dismissed the threat that Netflix posed,” said Smith, who teaches a course at CMU called “Managing Disruption in Media and Entertainment” and wrote the 2016 book. “Streaming, sharing, stealing: Big Data and the future of entertainment” with a fellow CMU professor Rahul Telang. “Talking to people at the time, they said, ‘Netflix is a distributor.’ Why should we care about a distributor when we are the content creators? And they were so wrong.
Smith says Netflix has managed to popularize itself to such a degree that it has almost become a consumer staple – like a public service – through exploring and understanding its customers’ interests using customer data. subscribers. This data has allowed the service to create a never-ending stream of new content that entices consumers to subscribe.
“Everyone in Hollywood knew in the abstract (at the time) that Kevin Spacey had fans, Robin Wright had fans, (director) David Fincher had fans,” Smith said. “But Netflix knew exactly who from their data. To me, that’s the big difference, and they created different “House of Cards” trailers focused on those groups. They could target these people directly.
By late 2019, the race to attract consumers to subscription streaming services was in full swing with the launch of Disney+, joining Amazon’s Prime Video and Hulu in offering more streaming options with original programming. Max, including HBO content, followed Apple TV+, Peacock and Paramount+, a rebrand of CBS All Access, which launched in 2014.
With so many streaming options that consumers could more easily subscribe to and cancel than traditional cable packages, consumers began cutting the cable/satellite cord in ever greater numbers, from less than a million cord cutters per year in 2016 to around 5 million per year since 2019. Cable and satellite TV are equipped has lost more than 20 million subscribers in the United States since 2014.
In 2020, 78% of American households subscribed to Netflix, Amazon Prime Video or Hulu, but the most recent Nielsen gauge found that YouTube viewership dwarfs all streaming services offering professionally created content.
As of November 2024, 41.6% of all TV viewing was streaming (cable TV accounted for 25% of viewing and broadcast TV accounted for 23.7% of viewing). Among those who streamed, 10.8% of all U.S. views occurred on YouTube. Netflix ranked second among streamers with 7.7% and Prime Video third with 3.7% audience. YouTube Says Consumers Are Streaming Worldwide 1 billion hours of daily YouTube usage via smart TVs alone in 2024. This does not take into account YouTube viewing on smartphones, computers and tablets.
“What is TV?” »
William Schmidt, a veteran television show writer who grew up in Swissvale, related an anecdote from his wife, who teaches second grade at a private school in Los Angeles.
“She asked (the students) what they were doing over the (Thanksgiving) break, if they were watching TV,” said Schmidt, who recently wrote about the second season of Paramount+’s “Tulsa King.” “One kid raised his hand and said, ‘What’s TV?’ They had no idea what she was talking about. They all watch YouTube and that’s all they do.
Smith says that for decades, Hollywood studios have controlled access to the scarce financial and technological resources needed to create content and the rare channels needed to distribute that content. None of the previous technological changes – for example, from radio to television – have altered the importance of these scarce resources. But the advent of YouTube and later Netflix created a new, more problematic source of shortage: consumer attention.
The rise of streaming is also impacting how media companies allocate their resources.
Declining viewership for linear television means there are fewer expensive scripted shows on ABC, CBS, Fox and NBC. This led to an increased reliance on lower-budget, unscripted “reality” programs, which began to take over prime time after the premiere of “Survivor” on CBS in 2000.
And sports, long present on television networks, have become more important to the survival of these networks. Even cable must prevent streaming now that Netflix was in business with the NFL for Christmas Day games this year and with Prime Video strikes deal with NBA.
Smith declined to predict what the next 25 years might bring for the entertainment industry, but he predicts a short-term contraction.
“The big question is to what extent are we going to see consolidation of streaming platforms? Smith said.
He expects Netflix and Amazon to be real survivors.
“So the real question is: how many more?” Smith said. “Disney+ probably survives. Max will probably be fine. And after that, it’s a little list.
Entertainment analysts have predicted that Paramount+ may have to merge with another service – perhaps Peacock? – to survive. And if there are no corporate mergers bringing streaming services together, there will be more bundles.
Package year
An industry analyst and former head of business development at a streaming company, nicknamed Entertainment Strategy Guy, wrote earlier this year that if 2023 was the year streaming services added ad tiers – a return to form for television entertainment before the advent of streaming – then 2024 is the year of the package.
ESG notes that the bundling of streaming services – like Disney+, Hulu and ESPN+ for one price – is a way to reduce the growing rate of consumers switching in and out of services, signing up and then canceling, and a way to reduce the lock in subscription growth.
“The cable bundle was a monolith powered by local cable monopolies,” ESG wrote in May. “To have a television, you had to have all of the television. No unsubscribes allowed! These new bundles are not that. They will, however, benefit from the power of bundling that cable television has enjoyed.
Smith points out that bundling makes sense because there is almost no additional cost to a company for an additional stream of a show.
“What economics tells us is that bundling content is more economically efficient than selling the same content individually,” Smith said. “We’re moving away from the traditional cable offerings that we’ve always had and moving toward these new offerings that I think are bigger and broader.”
In many ways, everything that was old is new again: Advertising levels and bundles are taking consumers back to the way they consumed their home entertainment in the early 21st century, when cable/satellite package subscriptions were reaching their peak.
You can reach TV writer Rob Owen at rowen@triblive.com or 412-380-8559. Follow @RobOwenTV on Threads, X, Bluesky and Facebook. Ask TV questions by email or phone. Please include your first name and location.