Film Theory: How Disney+ is DESTROYING Streaming

[Music] [Applause] [Music] [Music] hello Internet welcome to film theory the show that's here to remind you that YouTube and chill is a great financially responsible alternative if you can't afford Netflix after its latest price hike if you haven't already noticed the subscription video streaming situation is getting pretty darn complicated over here on Team internet most of us already know that the rise of subscriptions streaming has ushered the demise of cable TV with forty four point three million American households already having cut the cord at the cable cord in case you don't know what the chord refers to anymore because at this point it's so antiquated yeah there was a plug that ran into your house to plug into your TV that gave you a bonus channels it was crazy and now those cords are being cots those of us who are dumped into the real world in the middle of a recession absolutely understand why this is cable is just freakin expensive and those prices keep climbing even when the best content flees to subscription platforms and it forces people into bundles getting them to buy tons of junk that they don't want just get a couple of things that they do when streaming first came onto the scene a decade ago it was a solution to both of those issues not to go all grandpa Mapp had on you but when I first started watching my girlfriend's Netflix subscription I mean ordering Netflix for myself as a fully grown adult it was $7.99 a month now there's multiple different plans and they max out at $16 a month come on guys ah makes you wish for the good old days but not the two old days where you're back into cable TV territory but like the good old days that are kind of after cable TV days but before the days that are now basically when Netflix first launched okay and now in 2020 everyone is rushed to the streaming well and the Disney pluses and the Apple TV pluses and pretty much anybody else who feels like sauce and a plus at the end of their name is getting in on the gold rush there are even more big names like NBC use peacock and Warner media's HBO Macs on the way and if you think this is gonna end well with dozens of streaming companies coexisting in harmony think again of battle to the streaming service death ripsi so and Verizon go 90 and Yahoo screamed this is only the beginning there's an estimated twenty four point eight billion dollars out there for the taking these services are desperate to make anything that'll get you to come over to their service and watch no time of my friends got Netflix deals it's a very achievable goal to make matters even more competitive now every network is territorial long gone are the days where Netflix can just sit back and simply offer hit NBC shows like The Office or hit Disney movies now the NBC's of the Disney's of the world have their own streaming platforms and they're taking their content back and making sure that it doesn't go out to play with the other neighborhood riffraff streaming services live or die by their content library there's only one company out there whose library has been known and readily merchandised for the last 50 odd years and that one is Disney but are the Little Mermaid's and Lizzy McGuire's of the world enough to crush obsessive hits like Game of Thrones the good place and nailed it is last one just me Nicole Byers is a gem and a mood simultaneously ok no my friends the question that I'm asking today is who will win the streaming wars in an ecosystem that is overcrowded and oversaturated with consumers strapped for cash who will survive well it turns out that we didn't have to guess who's poised to win the streaming war because there's a lot of evidence out there to point us in the right direction and while it might seem that this is just a question for business nerds think again my theorists if the streaming service you subscribe to isn't at the top of this list you better start advocating for your favorite shows now otherwise they're likely to go the way of the silent film and VHS tapes of the world lost to media history forever might as well find out now if your favorite streaming service is going under so you can start your online petition to save whatever your favorite show is tiny house nation cable TVs peter out over the last 10 years because the prices are so crazy they've become unsustainable but ironically the streaming service wars are likely to share some similarities costs of each of these services are rising even if the content on them is becoming more and more fragmented Netflix has had four price hikes even in the midst of losing some of its biggest shows as recently as last year a comedy fan in the US could watch friends the office and is the new black all in one place Netflix for the low low price of $8.99 a month but now those three shows are spread across three separate streaming services and to get them all surprise surprise nowadays you're shelling out a whopping $35 a month as show scatter it also means that viewership is being spread thinner and thinner it's called siloing siloing is making it so people often aren't watching the same shows as each other which means that massive cultural events where everyone gathers around watch the final season of something or the final episode of something just isn't a thing in 2020 it also means that spoiler alerts now have to exist in perpetuity and on a personal note it just makes it really hard for me to pick streaming shows to cover here on film theory I mean how is a guy supposed to pick shows to cover on this series with so many ridiculous streaming services out there if I were you I'd be watching Bojack horseman on Netflix but there's a chance that you're all watching I don't know Midsomer Murders on acorn or some nonsense that's why I have to do this episode I have to know which service is gonna survive and tell you guys about it so we can all be on the same page and plan episodes out on this channel accordingly maybe this is just another episode of selfish Compton after all so with all that said let's just get into the numbers and figure it out it's easy to root for the incumbent here Netflix not only as Netflix the current market leader with an 87 percent penetration rate among us over the top video subscribers but Netflix is still projected to be in first place by a wide margin in 2024 now I know what you're all thinking penetration rate is hilarious term and I agree but penetration rate is also a metric used to describe market share in the streaming marketplace basically of everyone who has any kind of digital streaming service 87% of them have Netflix this is compared to companies like fine video with a 53% penetration rate and Hulu at 41.5% Netflix has also shown that it's huge market share isn't easily shaken some experts predicted Netflix could lose up to 25 percent of their subscribers when Disney Plus launched but it lost almost none Netflix's reviews and ratings are higher number and better in rating than Amazon the Netflix app is downloaded far more often than Amazon video and certainly not least of all Netflix develops original content that's nominated for top industry awards dozens of Oscar nominations and over a half dozen Golden Globes just this year alone according to Variety in 2019 quote has to pick their favorite shows on Netflix users surveyed put orange is the new black at number one and stranger things at number two topping licensed shows like The Office and Friends they clearly see this as a path forward in 2019 Netflix spent fifteen billion dollars on original programming that is more than Prime video Hulu and Disney Plus combined across 2019 Netflix released on average more than one new show per day the TLDR here is that this date night juggernaut ain't going nowhere at least until it starts running out of money you see the first problem with Netflix is that it's spending that much money on programs for a long time Netflix wasn't even profitable as a company it is now but it spends the vast majority of its revenue on new programming meaning that it has no buffer to survive a few lean years if things start to go badly Netflix isn't in a position to be able to sustain itself on top of that Netflix in 2020 is no longer able to do what it was intended to do it was supposed to break down barriers and access to entertainment so people wouldn't have to order cable packages with 600 channels just so they could watch four of them but now with so many streaming platforms out there each guarding it's early 2000 sitcoms like little Network dragons on top of their gold pile the TV watching walls are higher than they've ever been before with shows now broken across even smaller segments now in order for our comedy fan from before to watch the three shows that they want they have to buy platforms with a ton of stuff that they don't like that is no different than cable it's not Netflix's fault but the media landscape has put it into a position where it can't really play the whole field anymore now Netflix has to perform or die it has to create its own shows that are big hits or else it's gonna fall apart when it starts falling apart it falls apart in a hurry so netflix has chances of being the winner here are slim at best I mean just look at the other contenders namely the 254 billion-dollar flying elephant in the room Disney sure Netflix might seem like a behemoth in the realm of streaming but it is a downright puny company when you compare it to Disney Amazon Apple and the other conglomerates that are far more diversified in the business isn't that they do in essence Netflix can't afford to have a bad year in the streaming marketplace because subscription streaming is its entire business model they have to succeed now and they have to keep succeeding meanwhile behemoths like Apple Amazon and especially Disney can all play the long game because they can afford to play the long game subscription streaming is only a fraction of their business models they have money coming in hand over fist from any of the other dozens of things that they do but you know some people are just blessed like Disney a streaming service that doesn't look like it needs to play the long game at all Disney Plus attracted a staggering 10 million subscribers on its first day putting its penetration rate among subscription video customers at 5 percent on day one that would be like 5 percent of all YouTube viewers subscribing to one channel on the day it launches and Disney is reportedly very committed to its streaming plan what Disney CEO Bob Iger said last February that streaming apps are now the company's number one priority and quote also Disney has 61 shows in development looking towards that Netflix benchmark well at the same time not paying any licensing fees since Disney owns everything in its vault this becomes an even bigger deal when you compare Disney to companies like Amazon and Apple also huge companies in their own rights but not entertainment companies first and foremost Disney has decades of audience research data and fan bases for everything from Moana to Iron Man to the mandalorian the tech giants meanwhile are starting from scratch in entertainment and hoping that Amazon customer data about people who bought cheese graters last year somehow translates into viewership for America's Test Kitchen finally let's not forget that Disney Loki has for streaming services active and in use not just one it already launched ESPN Plus last year has control of Hulu following its acquisition of Fox and it owns the streaming service hot star in India meaning it has a big stake internationally to the mandalorian their new experimental series became the most in-demand series in the world the second it launched so clearly they're putting their experience and unbelievable knowledge of fandom to work like yesterday looking at it this way Disney seems like Thanos which yeah and ironically Disney also owns but wait a second we have another problem here the way that Disney's structured with its multiple streaming services it seems like we're headed towards a real B word oh yeah you heard that right we're headed back towards the bundle the famous cable service bundle that would force customers and dispense a channel packages with all kinds of garbage that they didn't want from rfd-tv the farming and agricultural channel to retirement living TV and the puppy Channel okay well the last one sounds good but you get the idea when I tried to buy Internet cable companies still try to sell me bundles with a home phone line and I have to keep myself from actually smacking up I mean bundles are the worst but Disney is already pushing straight back to bundle fest with its lineup of Disney Plus Hulu and ESPN Plus scurrying back to the days of cable faster than you can say Disney deja vu I mean over the last couple years Disney has really been milking the nostalgia for Bucks but in this case it looks like Disney themselves are nostalgic for business models from like ten years ago but it can't be right right leaving the days of cable behind we're a new innovative generation of media consumers there has to be someone who can win this war for us uh school kids that were too smart for cable or who are too poor for cable but say that we're too smart for cable what about Amazon Prime what about Apple Sony NBC unfortunately while all of them are backed by really strong companies they're all plagued with their own issues Amazon Prime and Apple seem like mega contenders at first glance they're both backed by massive companies that would be successful with or without streaming entertainment meaning that they can afford to play around for a little bit without needing a smash success Apple isn't worried about razor thin margins like Netflix but unfortunately a lot of the tech giant's are entering an arena they know nothing about they don't have deep content libraries like Disney and they aren't coming in with a big entertainment customer base like Netflix it also doesn't help these services have some of the most complicated interfaces with some of the worst controls in the industry it seems petty to call this out but the fact is you can tell Amazon doesn't understand entertainment customers just by how poorly their TV app works I mean what do I own what don't I own what do I have to pay to rent this is like the worst system ever Amazon it is miserable and I'm going completely off book at this point because it is that bad I have gotten so frustrated so many times trying to watch Amazon shows because each season is its own thumbnail for some reason why aren't you housing those together guys why is the buy or rent shelf one of the first shelves that I'm presented with as I'm scrolling through your app why would I choose to pay for stuff you're just joining me the stuff that you don't actually have available for me and how hard is it to make a functional fast-forward and rewind button I mean still you're using the double arrows too fast like I can't tell where I'm stopping at any point it is so so bad oh wow I had a lot of pent up feelings there that I just got out I feel cleansed in some way oh yeah Oh Amazon and Apple just aren't fit for this war I mean same goes for places like CBS online and other networks even if you're willing to settle for their smaller roster of content good luck being able to even find what you're looking for the majority of these other streaming service contenders are trying to catch up on all the fronts they're trying to catch up on building out their product to a usable standard they're trying to build out their user base to make the whole thing sustainable and they're starting with tinier content libraries it's just a lot a lot to ask any one service to overcome and content is not cheap my friends I mean we're cheap here in film theory but you know that's not saying a whole lot so is that it disney wins netflix has a chance as long as they keep dancing and the small guys kind of fall by the wayside well let's check in with the experts observer has a pretty comprehensive diagnostic of the space that concludes with the following quote some combination of Netflix Disney Plus Amazon Prime video and YouTube TV will thrive Apple TV Plus Hulu and HBO max will survive though not without trouble and CBS all access and peacock will struggle to keep pace and quote mostly this aligns with everything we just discussed the individual networks won't be able to keep up places like Hulu and Apple might be able to hang in there because they're owned by Disney or they're just a tech giant and winners will be services like Netflix because they had a first mover advantage and Disney Plus because it's Disney and Disney doesn't lose it anything at this point the one outlier here that we haven't mentioned is the one where I'm guessing we all spend a lot of time but don't think much about in this race YouTube TV that's right YouTube TV is the wrinkle in all this business that's gonna sweep all the competition if they're not looking out so let's talk about this relatively new horse in the race unlike narrowly focused services from networks like CBS or NBC if YouTube TV aggregates a lot of shows from a lot of different platforms and allows you to either watch them live as they're being shown like regular TV or save them to your library we can watch them on demand like Netflix your library is unlimited and it never goes away so essentially you can save every single thing that comes on TV until you have a library that's quadruple the size of any other streaming platform and YouTube TV has a lot of channels regular people actually want like news and sports and Keeping Up with the Kardashians with that system we're already able to get around some of those Netflix siloing issues we talked about before because it funnels regular TV into the service it also isn't relying on a static library that it has to build all on its own like Disney plus it gets new episodes 24 hours a day as TV keeps airing and it doesn't need to bundle either because it already comes with stuff like ESPN I would know because YouTube TV desperately wants me a 30 year old white male to watch football I don't watch football I don't click on it when you serve it up to me in the top of my subscription feed please fill that wasted screen space with something you might actually think I'll watch like Chloe's latest fashion launch or infinity train for the umpteenth time or JoJo's Bizarre Adventure because yeah that's where I watched it on YouTube TV and it's fundamentally different from other streaming services because it's also ads supported meaning that it's not just relying on subscription revenue for its profit no that might seem like it's cheating but apparently users don't care because it's become the fastest-growing live streaming service in the last year and it continues to poach users from everywhere else on top of all of that the thing that everyone overlooks here is that YouTube is not totally separate from YouTube TV in fact this very channel is approved for watching on YouTube TV look my mattv2099 you two made and also Google and also alphabet the company that owns all of them YouTube raked in a reported fifteen billion dollars in ad revenue last year alone on top of that YouTube is focused on a metric that gets overlooked on a lot of these other platforms the magic two words watch time YouTube TV has two million paying subscribers but YouTube's main has two billion monthly users and also has 250 million watch hours daily according to IG com quote people spend more time on YouTube in almost every major global economy excluding China than any other video streaming site end quote YouTube has the ability to funnel users towards YouTube TV from an entertainment platform they already love based on watch time that dwarfs literally any other entertainment medium out there in the world like I said people aren't thinking about it but YouTube TV is a massive competitor in the race and to top off all its other features it's totally usable remember when I said that no one can find anything on Amazon Prime that CBS online is annoying to use well YouTube TV is not I can use it my father-in-law can use it my grandpa can use it because it looks and feels a lot like regular TV did with old cable it has a lot of channels and a watch most of them it has commercials it costs $50 a month wait a minute YouTube TV is just cable all over again YouTube TV is just cable it's just a bunch of channels and I can switch back and forth between them and like yeah it's got like an unlimited DVR feature or whatever but damn it they got me again and here's the moral of today's streaming wars theory my friend whoever wins we lose the streaming wars seem really exciting everything that's happening with all these platforms showing up if making headlines seems groundbreaking it seems like entertainment is in an upheaval but the truth is that those who are poised to be the winners are set up to win using the exact same tactics that cable companies have used since the very first a TV service started in 1972 it was called home box office or HBO for short when that first premiered back in 1972 it cost $6 a month it worked by aggregating the rights to movies that were otherwise going unwashed and uncared about sound someone you know the history of cable is quite frankly worth its own episode but for now suffice it to say that no one from Amazon to Hulu to Disney Plus to YouTube TV is reinventing the wheel here ten years ago we were at a juncture where we could have reinvented entertainment or taken a completely different path but between bundling advertisements and siloing of content behind lots of paywalls are quickly just headed back towards a future that looks just like the past when the dust settles and the streaming wars are finally over it doesn't seem like it's gonna be any less expensive or any less fragmented well there be some differences this time around sure thanks to the internet viewers are at least in a better position to make their opinions heard as well as completely panel show or a company if they make a misstep that said another ten years down the line and we're likely to see most of the small players swallowed up by the big guys who will only have each other to compete with using a lot of the tactics that we've all seen before and where will I be well still shelling out for everything because seriously I have to watch everything for this channel it's completely ridiculous how many shows I'm supposed to know nowadays I was hoping that the streaming wars would thin out a few of these but guess knots in the meantime remember it's all just a theory a film theory now if you'll excuse me have to go and watch the finale of Bojack horse [Music]

Channel: The Film Theorists

Views: 4,481,529

Keywords: disney, disney plus, disney+, disney +, netflix, hulu, apple tv, streaming, streaming service, streaming war, streaming wars, hbo, showtime, apple tv plus, apple tv +, who will win, cable, the mandalorian, stranger things, stranger things season 4, baby yoda, cbs all access, picard, fail, lose, we all lose, amazon, apple, cbs, film theory, film theorists, matpat, film theory disney, film theory star wars

Id: ebvaBYEYFzM

Length: 21min 51sec (1311 seconds)

Published: Thu Mar 05 2020

Reddit Comments

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[u/pehmette]

There's always another option and it begins with P...

[u/LegoC97]

Just do the responsible thing: Pay for 1 streaming service and pirate the other shows you want.

[u/real_toastertastic]

I feel this is a bit biased. The description didn't say a spon, but it felt like it could have been paid for by youtube as an advertisement (not saying it was).

[u/Thraask]

As someone who does market research on the streaming video industry for a living, here are a few quick thoughts about this video:

1) General takeaways were all things that a lot of people in the industry pretty much agree on. Disney and Netflix are the big boys going forward, and everyone else is playing for seconds for the reasons mentioned. They both own a ton of their own content, and their biggest competitors don't really know what they're doing (Apple) or don't care and are more interested in other things (Amazon).

2) YouTube TV (and all of the other services like it that are basically streaming versions of cable), while popular and growing, are INCREDIBLY unprofitable at their current rates So yeah... expect price increases and more bundling shenanigans until all those services are pretty much indistinguishable from cable TV.

3) There's this idea floating around that someone will "win" the streaming wars and everything else will eventually close up shop. In reality, services that own their own content can basically stay around as long as they want to. As long as the main things you offer are your own content and not content that you are licensing from other people, owning and operating a streaming service is actually really, really cheap. The cost is basically all in the content.

4) Piracy is a huge part of this discussion that gets lost in the discussion a lot. The rise of streaming services actually helped cut down a lot on piracy that was happening. Generally speaking, if people feel like they are being charged fairly for content and not being jerked around by companies, a lot are happy to pay. This re-bundling world we're moving towards is going to encourage more and more password sharing and piracy.

5) Remember what I said in point #4? People are generally happy to pay for content? While anecdotally you may not want to pay for like... Netflix, Amazon, Hulu, YouTube TV, Crunchyroll, etc. all at the same time, that's pretty much becoming the norm. Growth in streaming services isn't happening among people that don't have one. It's happening among people that are subscribing to second and third and fourth services. Obviously that growth isn't infinitely sustainable, but unless Netflix and Disney get bundled someday, the norm will either be that you cancel cable and replace it with 3ish streaming service that you like, or you subscribe to 1ish service and pirate the rest.

[u/Makonio]

Oh boy. Another video about MatPat's insanity with that stupid mouse play by footofaferret who is also going insane, because he has to do voice acting for him ALL BECAUSE MATPAT WANTED TO BE A PRINCESS AND THE MOUSE WOULDN'T LET HIM, FOR LORD'S SAKE!

But for real, streaming services are in trouble thanks to Disney+ and probably Netflix. These things are getting pricey by the minute because they want to promote their original content and make money. Honestly, I'm afraid every streaming service will get a lawsuit from the FTC. And it's kind of sad to see everyone ditch piracy and move to streaming services. Although streaming services isn't bad compared to cable, because on here you can watch any show you want and the price is must cheaper than cable. But on cable, it's very, very expensive, and if you don't buy it, you have to watch PBS Kids all day long.

[u/Jack-M-y-u-do-dis]

They did, and so I’d every other company who took their stuff off of Netflix for their own services. They really do want us to go back to dvd because it will soon be cheaper to buy a few movies a month than to pay for all these services

[u/ICrazyInMovie]

So I live in Sweden and here we have a bunch of other services like Viaplay. Plus Disney+ isn't even available here yet (unless you have VPN that is). So Viaplay is a huge contender for netflix here which is way more expensive but you get the trendy movies after release date sooner than you get them on netflix. It could take a year before a movie comes to Netflix Nordic after theatrical release. So the people that can't afford Viaplay and doesn't want to wait for Netflix to release it usually just end up pirating it.

So I think their were points of international contenders and piracy he could've looked more into

[u/Werrf]

This is why allowing distributors to own content is bad for consumers, and should be controlled by Antitrust laws.

Honestly, though, we blame Disney for 'ruining' streaming, but Netflix has to shoulder a lot of the blame. They're the ones who started putting more and more of their resources into Netflix Originals and less into maintaining their library of titles. That's when it all started to go wrong, and when the dream of one place with everything you wanted died.