All Roads Lead to Cable: Streaming Rebuilds the Model It Disrupted

The Verge traced the change to Netflix’s early history. Before Netflix fully committed to streaming and left DVDs behind, it experimented with giving subscribers a physical box that could access high-resolution digital copies of films. Movies would have been downloaded to the box in the evening and become available the next day. Netflix changed course around 2006 after seeing people flock to watch grainy viral videos on YouTube. Its pivot to streaming turned it into a powerhouse that threatened traditional cable services. People liked being able to instantly access large catalogs of movies from their computers without expensive cable plans. After Netflix began original series in 2012, its binge model helped generate buzz and drive sign-ups. As Netflix’s user base grew, Amazon, Disney, and NBC realized there was money to be made by launching or contributing to their own streaming services. Cable did not disappear as streaming took off, but cable subscriptions began falling over the past decade and have continued to decline.

Streaming is now the most common way people consume films and television, and many people subscribe to multiple services to access what they want to watch. The proliferation of services led to an explosion of media, while the market’s maturation made it harder for companies to find and keep new subscribers. Platforms have raised prices repeatedly, making it more expensive to keep up with shows than when streamers first appeared. To court price-sensitive customers, many companies introduced ad-supported tiers. Some also launched free ad-supported television services that look and feel like traditional cable. Unlike regular streamers, where constant ads and endless choices can become annoying, FAST services such as Tubi, Roku, and Pluto TV keep things relatively simple. In exchange for watching a few commercials, users can browse entertainment libraries or choose channels dedicated to specific series. The Verge said the way most FAST services present their channels in long lists makes it easy to see they were intentionally designed to mimic old cable interfaces.

That may reflect entertainment executives beginning to think that icon-dense carousels are not necessarily the best way to show off a streamer’s offerings. It could also signal that viewers have grown weary of the algorithms streamers use to suggest what to watch. It also suggests that as the streaming wars carried on, newer companies realized the old guard got a few things right.

More bundling is likely in the future because people still want to keep up with new content from paid streamers without signing up for every service individually, The Verge said. Bundling gives consumers a way to save money on entertainment, and almost every major streaming company has offered some kind of deal that gives access to one or more competitors. Streaming bundles are reminiscent of the tiered cable packages telecoms sell. Companies such as Verizon and T-Mobile include access to streaming bundles as perks for subscribers. More individual streaming platforms will likely roll out always-on channels designed to let people watch certain series without choosing a particular episode. For services such as HBO Max, that would be almost like a return to the way HBO’s various channels air on terrestrial television. In addition to helping viewers deal with decision paralysis, always-on channels could help streaming services keep user engagement high. If every streamer decides that paywalled always-on channels, bundles, and even more price increases are the way forward, The Verge said, it will feel like the industry has come full circle back to cable.