By James Galgano

Odds are that if you are reading this article, you and your family subscribe to some kind of streaming service. In fact, about 83% of American households subscribe to at least one streaming service. A slightly more concerning fact is that the average time an American spends streaming per day is three hours and six minutes, while digital media in general amounts to 13 hours and 11 minutes per day. The inarguable fact is that, with every user gained, streaming services are becoming better and better at drawing users in and keeping their subscriptions active. And the more the service can generate interest, the more control it has over the viewer. Essentially, you will never be in control of your television. It controls you.

Woman scrolling through streaming services. Image credit: Pixabay user yousafbhutta.

It is important to identify what a streaming service is, as the term is used to describe a wide variety of platforms. PC Magazine defines a streaming service as “An online provider of entertainment (music, movies, etc.) that delivers the content via an Internet connection to the subscriber’s computer, TV or mobile device.” For my purposes, I will be focusing on providers of video streaming, not music. 

The idea of “video streaming” was popularized in the mid-2000s by YouTube and Netflix. While the former is the internet’s dominant video site, in 2007 Netflix offered “the first popular video-on-demand service,” a change from their previous business model of renting DVDs via mail. The most significant difference came with the speed and availability of video content, so consumers could easily access the movies and TV shows they wanted without any wait.

Graph predicting the increase in American households “cutting the cord.” Image credit: Insider Intelligence.

This rapid availability of media was in contrast to the cable television system already in place, where there were many channels, many of which one might not watch at all, and all with scheduled programming. The evident benefits of streaming-on-demand caused many people to switch over to getting their video content exclusively through streaming services, ditching cable entirely. This “cord cutting” population, as they are commonly called, has risen to 47.6 million American households today, according to a study from Insider Intelligence.

The newest era of streaming began around 2019 and is commonly known as the “streaming wars.” The start of this competition is attributed to the launch of Disney+, as it was the first service to significantly challenge the monopoly that Netflix had held over the industry. The coronavirus pandemic of 2020 also aided in the rise of more streaming services, as so many of us were stuck at home, and that year global subscriptions to streaming services passed one billion. 

With new services seemingly popping up every day, the streaming service industry got complicated quickly.

When first researching this article, I came to the somewhat frightening realization that I was unaware how many streaming services my own family had. After asking my dad, Robert Galgano, and us both wracking our brains and counting on our fingers, we reached the shocking number of eight. I wasn’t even fully aware that eight different streaming services existed at the time, and I had personally only ever used four of them. This is a definitive tactic that streaming services use to retain subscribers: they hide in plain sight.

Paramount+ promotional photo and logo. Image credit: Paramount Pictures Corporation and CBS Broadcasting, Inc.

Our streaming library is made up of Disney+, Hulu, ESPN+, Netflix, Peacock, Paramount+, Apple TV+, and Max. There is no feasible way that my five-person family consumes enough content to justify having this many services, especially given the cost. With three ad-supported plans, two ad-free plans, and one premium bundle, the total yearly bill amounts to $906.76. Cable companies like Spectrum and Xfinity offer yearly prices that are in the same range of streaming service bills like mine. Combined, the price of streaming soon becomes comparable to that of cable television, and some consumers might be left asking why they made the switch from cable to streaming in the first place. 

One such streamer, Upper School history teacher Shannon Castelo, agrees that the prices for services have increased exponentially, especially when compared to the price of cable television. She commented, “The line we were all being fed was that if we cut the cord and signed up for streaming services, we would save more money. But what ends up happening is that you end up signing up for a million different streaming services, and really when you add all those together, it ends up being more expensive than if you had just stayed on a major service like Verizon.” 

Despite all these charges, Netflix remains the only streaming service to be generating a profit, with all other streaming service companies losing money every year, despite gains in subscribers. This is the reason that streaming services are consistently raising prices in any attempt to generate more revenue.

Netflix, although profitable, has generated some recent controversy due to the service’s restrictions on password sharing in an attempt to further increase subscriptions. This has been a real point of contention in the Galgano household, where we recently have not renewed our Netflix subscription in some form of protest. Despite the initial outrage, however, Netflix’s own studies and American subscription trends that occurred in the months after the limits were introduced have shown that new subscriptions outweigh cancellations, increasing by 4.5% since the change in policy. Regardless of any customer backlash, Netflix will likely continue to increase prices if there is a higher profit to be made.

Netflix celebrating ten years of stand-up. Photo credit: @netflix on Instagram.

Another common critique of the streaming industry is the current overwhelming nature of deciding what to watch or which streaming service to use. According to Vox, the average American consumer of streaming spends 45 hours per year choosing what movie or TV show they will stream next. When there is too much choice available, the ability to choose is greatly diminished. This is known as the “paradox of choice.” No one wants to spend their entire evening mindlessly scrolling through each streaming service they have; the task is too daunting.

Sam Woiteshek, a columnist at the The Michigan Daily, writes, “We are brainwashed into thinking that more technology is better. I’m here to tell you — it’s not.” He argues that a more “monolithic” streaming service would allow consumers to feel less frustrated when streaming. If the point of streaming as a shift from cable television is to make viewers have an easier time watching their favorite shows and movies, then why is every new design an attempt to further confuse or interrupt the viewing experience?

Collegiate student Aanika Sethi (‘25) has complaints about the availability of content across platforms, especially in terms of regional differences. She explained, “Each region has different shows, which is so annoying, ‘cause like when I was in India, I could watch Gossip Girl, but here you can’t.” For those who travel, changes in availability and password sharing can become very frustrating. She continues, “They always cancel shows that are good only to have the most stupid reality TV shows ever.” 

This is the unfortunate reality of the television industry, and it is not simply exclusive to streaming. Variety Magazine explains that “if a show gets high viewership relative to the cost of producing it, it gets renewed. Otherwise, it is canceled. That is how it has worked since the days of black-and-white TV.” The real change in the way that consumers see cancellations is simply due to the mass production of content in the modern industry. While Netflix is only canceling 10.2% of its original shows, it feels like more because there are more being produced, and consumers are more likely to be hyper-fixated on solely their own viewing habits. The more content made, the more there is for people to be upset over. 

Graphs displaying the proportion of cancelled shows. Image credit: Variety Magazine intelligence platform Luminate.

In some sense, having viewers frustrated with a service is towards the ultimate goal of getting the user to spend more money. Hulu was the first service to implement a paid subscription that also came with advertisements, and after some pushback from fans, added a higher-priced but ad-free version of their subscription. However, former head of Hulu streaming Kevin Mayer noted in an interview with CNBC that “The average revenue per user for the ad-supported [plan] was materially higher than the [revenue] for those who were taking the no-ad version.” Essentially, the money generated from ads more than made up for any frustration it caused viewers.

Analysts at Digital TV Research estimate that through advertisement-based subscriptions alone, streaming services will generate 6 billion dollars this year, and by 2029, will be making around 20 billion in yearly revenue. Trends in streaming services act as a domino effect: if one service is succeeding through a particular method, others are quick to follow. Ad-based plans are just the most recent trend in the ever-changing competitive business, with each service trying to climb out of their revenue deficit.

When discussing streaming services, it is important to note that their changes to the way that television operates affects not only the viewers but also those who produce the content—the actors, writers, and behind-the-scenes crew. Their treatment led to the SAG-AFTRA strikes, in which these film industry workers hoped to improve their work stability.

For actors, the main changes from streaming services come in residuals, which is a payment to an actor when their show or movie is replayed, and which often can be a significant part of their income. In the pre-internet era, once a tv show was syndicated for reruns, an actor could depend on a steady stream of residual payments as long as the show kept being broadcast. However, with streaming services, residual payments are significantly decreased, to the point where only 12.7% of the actors on strike even qualify for health insurance. The actor union’s healthcare requires a minimum yearly income of $26,740. 

SAG-AFTRA members on strike in Hollywood. Photo credit: @sagaftra on Instagram.

The writers on strike actually reached a deal on Sept. 27, where in exchange for coming back to work, both their base pay and foreign residuals from streaming services have been raised. Another point of contention between writers, actors, and studios was regarding the use of AI, with many writers worried about their job security with competition from Artificial Intelligence. According to the deal, studios are no longer allowed to use AI as source material for a script—there must be real people present in every writer’s room. However, the human writers do have the option to use AI as an assistive tool.

The consumer-actor relationship is a very careful balance to maintain in order to keep the film and tv industry afloat. If the consumer isn’t watching, then projects get canceled, and suddenly actors and writers are out of jobs, and the industry shrinks. If actors are refusing to work, then less projects can be produced and the consumer is upset, also hurting the industry. These services depend on both groups to maintain their role, but what happens when they don’t?

Well, in terms of the strikes, the effects are already being displayed through canceled shows due to necessary budget cuts from streaming services. The Guardian’s Stuart Heritage explains how cancellations affect subscribers: “we have come to see streaming platforms as bottomless archives for everything that has ever been made.” If shows are discontinued, “it creates a lot of uncertainty” and demonstrates the power the industry has over what we consume. 

As a consumer, you do not have any control over the turmoil of industry versus union or the prices of the subscriptions, but you can follow these events as they happen, because they directly affect you. Streaming has changed the economies, ideas, and people through the way we depend on watching television. We must strive to understand, for the sake of our volition, the developing digital world around us.