The worst part is that we already had a perfectly viable model: Netflix paid for the rights to everything and gave access to everybody for a reasonable monthly fee. Then the studios got greedy and thought "why should we let a middleman take a slice of our profits?" They took back the rights and started their own streaming services thinking that people would be happy to pay the same amount of money to access the tiny bit of content that they liked from that studio as they were previously paying to get everything. Inevitably, nobody could afford 10 subscriptions, and now their crappy services have reduced subscriber numbers and are either struggling to make a profit or going bankrupt.
> Netflix paid for the rights to everything and gave access to everybody for a reasonable monthly fee. Then the studios got greedy and thought "why should we let a middleman take a slice of our profits?"
To be fair to the studios, sticking with Netflix would have been suicide.
Put yourself at the mercy of someone else's distribution monopoly and you end up a powerless, penniless sharecropper - like people who develop mobile apps.
A good strategy might have been to pool their resources and create a new global channel that they all part-owned and distribute their content there. Like a big new Global TV Channel.
While not global, that was essentially what Hulu was originally for the US. A single streaming platform co-owned by many of the big networks. You could watch FOX, NBC, ABC, and other shows all on a single streaming platform.
Notably absent at the time though were many of the big cable networks and movie studios.
Interestingly Disney was not an original partner of Hulu and was late to the game. ABC was added several years into Hulu's history. The original partners were GE (before they sold NBC Universal to Comcast), News Corporation (Fox), and a private equity firm. That Hulu did not just become Peacock (or really that Comcast didn't need to create Peacock because it might have already majority owned Hulu in that alternate timeline) and is now a Disney property is a fascinating story in GE's mistakes, Disney's ambitions, and Hulu's seeming lack of ambitions, with a soupçon of the usual private equity meddling.
You're right about Disney not being original, I was wrong about that. But they became a partner two years into its existence. I don't know if I'd call that late to the game.
This system is not stable though. Every participant would think "why should I be content with X/N divided revenue if my content is so hot that if I pull out I would get much better revenue because everybody watches my content anyway?" Of course, they miss the point that everybody watches their content as part of the "one subscription" deal but it would be much different when it "50 subscriptions, all alike" deal - but everybody thinks they would be the ones that everybody would subscribe to, and the others would be the ones who will be left out.
Also, such channel would likely attract attention of the regulators as a clear example of a cartel.
Would you really have preferred Netflix to be your monopolistic cable company raising rates all the time whenever they decided to and blaming it on a new contract with Disney or a union strike with the Writer's Guild? How much would you pay for Netflix a month before that got to be too irritating? $50? $150?
The cable companies got to do it for so long because of the natural monopolies of shared physical infrastructure. To be fair, Netflix has been a major internet infrastructure company and there are arguments to be made about their colocation and peering agreements and the natural monopolies there that gave them an early streaming edge, even if the internet in its early days decided those sort of infrastructure agreements shouldn't create or promote monopolies. But beyond that first mover advantage and with the internet's spirit that peering and colocation are regulated fairly and not monopolistically, who would have gave Netflix the right to become the internet's TV monopoly? Would you have voted for a President who made it a campaign promise to make sure that FCC Regulators declared Netflix a legal monopoly in charge of TV streaming?
Netflix only really ever had the first mover advantage, and it is probably a good thing in the eventual long term that Netflix didn't win everything. It goes that Netflix's early model while it felt "perfectly viable" from a consumer standpoint at the time was obviously not perfectly viable in the long term as a stable situation. The situation we are in now of too many streaming services and cutthroat competition between them maybe isn't sustainable in the long term and certainly doesn't feel "viable" to us as consumers. But it certainly seems more viable and preferable than the timeline where you need to send letters to your local Congress representatives in the hopes that they might legislate Netflix price increases and put FCC pressure on Netflix to serve the content they promised to serve.
Literally no part of that was viable - Netflix didn't even buy 5% of US produced current TV content, less than 10% of film, maybe 1% if we generously round up of archive content, and most of what they bought was already paid for by Network airings or earlier windows.
And even then, Netflix was burning billions of dollars of cash every year to keep operating.
