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The Rise of Streaming
For the typical American, leisure is a sacred time set aside for the most entertaining and satisfying activities. Getting off work on a Friday, going home, and laying on the couch to watch your favorite TV show sounds like bliss, a simple joy everyone understands. It is no wonder then that American entertainment has been a leading influence on media platforms and content globally for over a century.
Thus, for the last couple of decades, there have been constant battles over entertainment technology, also known as the Format Wars. Each generational skirmish had a winner that changed the market and how the average American consumed entertainment. In the 1980’s, the main battle was between VHS and Betamax and in the 2000's, it was between DVD and Blu-Ray. Nowadays, this sort of competition is represented in the battle between cable TV and streaming services.
Since 2012, more than 25 million Americans have decided to cut the cord, and another 25 million are projected to do the same by 2025. And although this trend has been years in the making, the recent pandemic has played a role in accelerating streaming services’ meteoric rise.
Since the spread of Covid-19, millions of Americans had to adjust to working at home or attending school virtually. This brought a plethora of lifestyle changes. People were isolated and had a ton of free time. Most activities were either cancelled, postponed, or restricted heavily by the guidelines of the CDC, which left Americans with one option to satiate their boredom: technology.
According to a study conducted by Comscore, a media analytics company, home data usage rose by 33% from May 2019 to May 2020, 80% of which was spent on TV streaming services. In addition to this, many Americans unfortunately found themselves without work because of the weakened Covid economy. All of these factors accelerated the demand for a cheap and effective alternative to cable TV. After a couple months of quarantine, the results of these conditions were staggering. In a survey of 2,600 people in the U.S, a whopping 64% of citizens said they have cut the cord, are planning to, or never subscribed to cable in the first place. To further highlight this issue, of the households that still had cable, 11% said they plan to discontinue their service before the end of 2020. This demonstrates how quickly cable is becoming a piece of the past.
What does this mean for the future of entertainment? Well, the obvious answer is that cable will become obsolete. This pattern is undeniable. As of Quarter 3 of 2020, the number of global streaming subscriptions grew by 28%. And even though streaming services’ rate of increase slowed down after the lock down ended, it's pretty clear that they are not going to stop growing.
Another likely possibility is high amounts of competition between streaming networks, which could lead to better adaptations. Right now, the most competitive services are Netflix, HBO Max, Disney Plus, Hulu, Amazon Prime Video, and Sling TV. The downside to having so many options is that the most popular shows require multiple subscriptions, which ends up being very costly. As a result, customers are going to begin selecting their favorite services.
This combined with the fact that the country is opening back up again could be terrible for this industry, because the use of streaming services will eventually dip down as a result of busier schedules. It's likely that providers will respond by making their services less tedious and expensive. These changes could include: incorporating ads and lowering the price of a subscription plan, introducing a social media format (following friends and sharing preferences, comment sections, etc), or bundling different networks together for a better price (such as the Disney+ and Hulu bundle for $13 a month).
All in all, the industry’s future is bright, even if it's at cable’s expense. If the past has taught us anything about entertainment, it's that changes are inevitable and generally for the good of the common man.