The Problem With Streaming Pricing...

Would you buy anything else this way?

One problem with the streaming model is the same problem we had with cable television.  The pricing scheme is a little weird.  You pay one monthly subscription price and have access to all this content, even if you don't really want most of it.  I suppose it is no different that historical subscription pricing - you paid 35 cents for a newspaper and maybe you read the front page, the editorial page, the sports page, and the funny papers - but ignored the "lifestyles" section (formerly "woman's day") and the classifieds and endless stock listings.  Why pay for stuff you don't want?

On, right, 35 cents wasn't that much money, even back then.  Besides, old newspapers could be used to wrap fish, start fires, line bird cages, house-train a dog, or pack away belongings.  It was handy to have the physical media around!

But cable TV or streaming services - do you really want to pay all that money for just one show?  We recently "subscribed" to Disney+ for one month to see the new Star Wars series.  I was surprised that Mark is really into these shows, but then again, they really aren't sci-fi but just soap operas set in space.  They want over $10 a month for this service - and are still losing money at it, like most streaming services are.  But scrolling through the list of shows, we found little we wanted to watch. Once again, it was "Already saw that, don't want to see it again" or "Never want to watch that, ever!"   Regardless of the channel, it is pretty much the same story.

I might add that Disney+ is hard to stream unless you have a robust connection.   For some reason, I can stream YouTube on our poverty internet hotspot all day long, but Disney+ or PlutoTV requires that we use Mark's 5G cell phone as a hotspot to avoid interruptions. Oddly enough, some channels can now be streamed through YouTube (for a fee of course).  I watched the first chapter of "Tulsa King" (a Paramount+ program) on YouTube, but politely declined to subscribe.  I already watched every episode of the Sopranos - and Lilly Hammer - I don't need to see it again.  I have to say, though Slyvester Stallone looks good with a beard.   But I am not sure I want to plunk down eleven bucks to see him again.

If I did, I would wait until all episodes are posted and then subscribe for one month.  But the idea of streaming through YouTube is a sound one - for whatever reason, they seem to have the streaming technology down pat.  Disney+ keeps resetting my resolution to 4K which uses a staggering 1GB per hour to stream.  Disney+ sucks.

But I digress.

I suppose there are other ways of pricing these streaming services.  Cable has made use of "pay-per-view" and YouTube does allow you to "rent or buy" individual shows.  The problem I have with this model is, that, when you look at a one-hour show and they want even a buck to watch it (and they often want far more than that!) you think, "Ah, no thanks. I'm not paying that!" This is particularly true when you are paying not for the show per se, but for the right to watch the show as a "new release."   A year from now, the DVD is in the $1 bargain bin, or it is free-with-ads on YouTube or elsewhere.

It is funny how companies try to keep scarcity in the mix.  I watched a YouTube video about Disney's VCR and DVD releases over the years.  It seems the Disney people though they were giving away the store by selling VCR tapes of their animated films.  So they limited how many were sold and the time window for buying them.  "Buy now, because this one's going back in the vault!" - and no Dad worth his salt is going to disappoint his own little Disney Princess by not buying Snow White when he had the chance, right?

It is a funny business, selling entertainment.   And it is priced like nothing else.

Imagine buying groceries on a subscription basis.  For $500 a month, you can go to Walmart once a week and fill your grocery cart with whatever.   Walmart would go broke at that price - they'd have to charge a couple of grand, at least, because everyone would fill the cart with lobster tails and steaks.  And at that price, well, you wouldn't sign up, just to buy your fresh veggies (cheap!) and pasta.

That little thought experiment illustrates the problem with streaming pricing.   Making "original" shows is staggeringly expensive.  On the other hand, re-runs of shows from the 1950's through the 1990's costs little or nothing.  I can watch Highway Patrol or Burke's Law on YouTube for free, for example.  Or I can watch old re-runs of The Simpsons on Disney+ for $11.99 a month.  Old re-runs aren't worth much to me, however - not $11.99 anyway.

In way, subscription pricing is like buffet pricing - all you can eat, and you select what you want.  Unfortunately, this means the restaurateur tries to fill you up with cheap carbs at the beginning of the buffet line, and then carefully meters out the shrimp and crab legs at the end.  "Oh sorry, we're out - come back in five minutes!"  And of course, some folks just have to binge as a result.  Ordering a la carte seems more expensive, but if you just want the soup and salad, can be a lot cheaper - and better for you!

Disney has tried to raise prices on Disney+ and the money the division loses has cost the CEO his job.  Maybe streaming isn't the wave of the future - at least not for new releases.  Making a Star Wars series is probably not much less expensive than making a theatrical release - without all the hoopla and ticket sales.  So maybe they will change the model to be more like YouTube.

Or Netflix, back in the day when it wasn't expensive-to-make "Netflix Original Content" but instead, great old movies from the vault.  That was a lot of fun.  Now, they're putting ads on it.

It remains to be seen, but something has to give in this era of "tech-that-is-not-tech" companies that have been hemorrhaging cash for years nowEventually you have to make money - and no one seems to have figured out how to make money at this.  Market share is fine and all, but if it doesn't equate to profitability, there is no point to it.  And no, I'm not paying $30 a month for any streaming service.

That's probably what they would have to charge, just to break even!

NOTE:  Disney+ has been losing $4 Billion a year and has 60 million subscribers as of 2020.  So that would equate to a $66 per year delta, per subscriber, to break even.  So they either need to increase prices another $5 a month (which drives away subscribers) or increase the number of subscribers.  People like me, who sign up for a single month out of the year no doubt foil their plans!

Interesting math!

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