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Netflix Is Why AT&T bought Time Warner, and Comcast and Disney want Fox

178 points| lxm | 7 years ago |cnbc.com | reply

248 comments

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[+] MisterTea|7 years ago|reply
These companies are obsessed with fragmenting the market for the sake of owning content from production to delivery. I have bad news for them: you're going to lose. People don't want to go back to paying $100/month for a dozen streaming "channels" with one or two good shows and a the same crap the rest of the other "channels" have.

We want an on-demand nexus. A single hub. Just the other day I had the urge to watch ghost in the shell. Not available on any of the major streaming sites (Netflix, Hulu, Prime) but available on stars via prime. So I have to pay an addition $7/month to watch a single show? No thanks. Off to a torrent site or asking around to see if someone has rips or a box set. I have better things to do with $7 like buy dinner.

[+] bookbinder|7 years ago|reply
People don't want to pay $100 a month for cable TV either, but they did it anyway (for decades) and continue to do so. Now we're being asked to buy a bunch of streaming services and we'll bitch and moan, but ultimately we'll pay because every major platform will have at least one show that justifies their existence.

I associate CBS with bland procedural crime dramas and awful three-camera sitcoms. CBS All Access would have been doomed without Star Trek: Discovery. Admittedly, the show isn't particularly good, but I'm a trekkie so it doesn't matter. On the plus side, I discovered The Good Fight (a surprising smart, entertaining and well written show) so I now I have a legitimate reason to give a damn about All Access.

And then Apple will offer their own gateway drug (Lord of the Rings?) and Disney (...well they could just offer their back catalogue alone and still be a major player) and so on.

[+] lgregg|7 years ago|reply
> We want an on-demand nexus. A single hub.

That is close to existing, it'd be nice if the top players agreed to open their APIs so you could integrate it into a unified TV external like Chromecast or Firestick. Or, to go further, a unified platform that can process subscriptions and PPV across each library.

> $100/month for a dozen streaming "channels" with one or two good shows and a the same crap the rest of the other "channels" have.

Amen, we cut the cord officially on Friday. We went to $67 (including modem rental) per month plus about $25 dollars in streaming services and $40 for YT TV per month. That's still $35 dollars cheaper than what we were paying for Comcast TV and once we buy a compatible modem then we'll drop our internet to about $55 per month. We also have renters, so we loop them into YTTV for them to watch to their heart's desire for an extra $5 on their rent per month.

> Ghost in the Shell

Respect just got done rewatching an episode of the TV show.

[+] axaxs|7 years ago|reply
Agreed. TV for me is a nicety, I enjoy it from time to time. I'm already a bit putoff from having both Netflix and Hulu, forgetting which show is on which, two apps, etc. I have a feeling we're heading towards each player making their own ecosystem, apps, monthly charges. If/when that happens, I'll either not watch TV at all, or use the 'free' options widely available. I want to give them money, but not if it makes my life more of a hassle.
[+] sosborn|7 years ago|reply
> Off to a torrent site or asking around to see if someone has rips or a box set.

The other option is to just not watch it.

[+] consumethreads|7 years ago|reply
"We want an on-demand nexus."

up until a point ... HBO has been all about the entire pipeline from its inception because it feels (and has proven) that its content alone is good enough for it to be purchased a la carte.

Netflix and all others see this and say ... theres a business model here.

Fastforward 20 years, creating good content is cheaper. There are more film grad students to make the supply cheaper. Add to that the internet which allows you to be your own distributor. Basically its easier to be HBO today than when HBO started and you still get the added profits that HBO gets vs not generating your own content.

We want a hub but well take what we can get as long as the content is good. And we will get custom content because we have shown it pays. I guess we dont want the hub enough.

[+] skinnymuch|7 years ago|reply
Lionsgate Starz isn’t a big company with a lot of products so paying extra to watch things for that channel will be a challenge no matter what. On the other hand, HBO seems to be doing well enough with their not so cheap stand alone offering.

Disney with Fox’s media would be a pretty big streaming provider and many people would likely get onto it. Good chance of it becoming a standard streaming service. So I don’t see how that specific merger is a bad idea in a battle against Netflix.

[+] Benji_San|7 years ago|reply
I would be OK with occasionally paying for other streaming services than Netflix if they actually worked, I.e. better than torrents and preferably on Netflix's level.

The other services available in the Nordics are not even close with some "not working at all" and some have shitty/exclusive device support. Subtitle/language options tend to be abysmal and Netflix, which isn't very good on this front, seems to be the winner there too.

I'm more or less still waiting for Steam for films and TV series where I could just download the video file with whatever audio/language track I want. Providing a Netflix quality streaming service seems to be ridiculously non-trivial so it would be great if less complex and better working solutions were offered until the streaming platforms are figured out. Until that happens torrents offer a vastly superior way to watch content that is not on Netflix.

[+] rayiner|7 years ago|reply
What you’re proposing would lead to a terrible market structure. It would eliminate the most important differentiating factor: content. Subscribing to multiple streaming services might be somewhat less convenient, but it also allows competition based on producing and distributing quality content.
[+] macspoofing|7 years ago|reply
>I have bad news for them: you're going to lose. People don't want to go back to paying $100/month for a dozen streaming "channels" with one or two good shows and a the same crap the rest of the other "channels" have.

No. That's not the correct way to think about this. You are dreaming if you think media and production companies are going to leave $90/mo on the table. You will see prices rise. You will see multiple streaming services. You will see bills in the same ballpark as those of cable/satellite ... because that's about the sweet spot for people willing to spend monthly for media content.

>We want an on-demand nexus. A single hub.

You won't get it. Nobody is going to let anyone control all media distribution.

>So I have to pay an addition $7/month to watch a single show?

Yeah. Or you can just pass on that single show.

>Off to a torrent site or asking around to see if someone has rips or a box set. I have better things to do with $7 like buy dinner.

Age of piracy is going to end as well. And by the way, you are free to go and buy dinner and read a book. Nobody needs to watch the latest season of GoT - its not a human right. Talk about entitled!

[+] rileyphone|7 years ago|reply
The fact is the reason anyone pays for content online is because the cost to access it is less than the cost to download and manage it as well as the possible cost of acquiring it is less than the cost of accessing it, which goes down the more content can be accessed. Every monthly subscription has an additional cost of maintaining beyond it's numenary value which quickly bring them above just torrenting the content. Ultimately the content is just constant information, which is pretty cheap on the internet.
[+] Karishma1234|7 years ago|reply
Well the ATT and other behemoths are set for a massive failure. Their core business has been navigating regulatory mazes while trying to seek near monopoly and push expensive and crappy subscriptions down the throats of old and gullible people.

With each passing Year Netflix and Hulu are adding more and more original content which is becoming part of pop-culture. Within 5 years most of the cool things we want to watch would be from Netflix and Hulu and everything else would come from torrents or youtube.

Dinosaurs are dying and we should cheer.

[+] heroprotagonist|7 years ago|reply
Once that torrent download becomes 'Miscellaneous data' charged per gigabyte due to loss of net neutrality, won't that encourage you through their preferred channel?

Personally, I'll start reading books more but I imagine 90% of my country won't. They'll go through the service that has a deal with their ISP.

The scarier part being that regardless of whether I go through the recommended source or disregard the content altogether, it's an impact on the information and ideas I consume.

[+] tzs|7 years ago|reply
> Just the other day I had the urge to watch ghost in the shell. Not available on any of the major streaming sites (Netflix, Hulu, Prime) but available on stars via prime ... Off to a torrent site or asking around to see if someone has rips or a box set. I have better things to do with $7 like buy dinner

Or you could have rented the Blu-ray at Redbox for $2 (or streamed it from Redbox for $5).

[+] chrismcb|7 years ago|reply
Instead of stealing" it, you could have just rented it. There was a time if you wanted to watch a show you went down and rented it.
[+] always_good|7 years ago|reply
> We want an on-demand nexus.

Ah right, the utopia of extreme centralization I keep hearing HNers rave about.

[+] im3w1l|7 years ago|reply
Careful what you wish for, because that hub will be censored and the useful idiots will scream that it's not censorship if it's not the government.

I'd much rather a very very fragmented space with lots of diverse productions and perspectives.

[+] JohnJamesRambo|7 years ago|reply
How noble of you to steal what you didn’t want to pay for to fulfill your urge. Do you try this at the grocery store also when you get frustrated by the prices charged by the people that created the items?
[+] SomewhatLikely|7 years ago|reply
We have the nexus for music and I assume for books, not sure why video is still a hold out except I believe music and books are more regulated.
[+] tootie|7 years ago|reply
Rent it. Usually $4 on Amazon or Google or Vudu.
[+] rhino369|7 years ago|reply
>We want an on-demand nexus. A single hub.

So you want one company to control all media? Seems like a poor plan longterm.

[+] petre|7 years ago|reply
They will bundle Internet subscriptions with cable plans. UPC already does that.
[+] NicoJuicy|7 years ago|reply
Well, except if your kids want it. Disney is probably in a good position there
[+] SllX|7 years ago|reply
You have it backwards: a la carte is exactly what people want. If they didn’t, they wouldn’t pay for so many different subscriptions.
[+] ocdtrekkie|7 years ago|reply
The idea you'd be able to see everything you want for $9/month when the going rate was $100/month is and remains an utter fantasy. There is no way, shape, or form where the industry is going to suddenly operate on 90% less income.

Ironically, when you ask for one big hub, you're asking for a traditional cable subscription: Comcast will give you most of the channels out there (often, throwing HBO in for free), and due to the APIs the major ISPs and channels are on board with, you can either watch them on Comcast's site or the individual channel websites. Oh, and Comcast boxes now integrate your Netflix subscription too.

Cable packages when bundled with Internet service are often pretty price-competitive for what they offer. I recently left Comcast, but picked up their competitors' cable package for the same reasons: It's a pretty inclusive streaming package for a good price.

[+] mjfern|7 years ago|reply
I teach a startup course at a public university. We had a class on disruption, where we specifically talked about Netflix. I polled my students and asked how many have cable or satellite. A single hand went up, out of over 30 students. I then asked how many had Netflix. Every hand went up. AT&T can buy Time Warner and Comcast can buy NBC and Fox. It's not going to matter. Millennials and Gen Z aren't going to pay for bundled linear content via cable and satellite with heavy amounts of advertising. The model is in process of being disrupted. Within a decade or so, I bet traditional cable and satellite goes the way of AOL and landlines.
[+] makecheck|7 years ago|reply
Companies focus on buying content while ignoring the quality of the broadcast experience. I am tired of competitors that skimp on this.

Netflix doesn’t shove ads in your face, works on every platform and almost never has mysterious transmission failures. And now they have excellent content too. They have figured out so much more than some of the last-century providers.

[+] adjkant|7 years ago|reply
Hulu is the worst goddamn experience, not even just because of ads, but the entire platform is so buggy and fragile. The Netflix playback experience is somehow still highly underrated. Amazon got the playback experience right pretty quick as well - I really want to know what is stopping Hulu.
[+] wvenable|7 years ago|reply
Amazon prime shows ads for other prime shows occasionally and it just pisses me off. I'm seeing less of them, so maybe they got the message.

Prime is also very much a superficial copy of the Netflix interface.

[+] majani|7 years ago|reply
and yet they still make mind boggling losses with no end in sight. I think in the next 10 years Netflix will serve as a reality check that shows why content creators have had to resort to their ugly business practices.
[+] p2t2p|7 years ago|reply
I'm a simple man: if I the music isn't on Spotify or Bandcamp I'm gonna torrent it. If the movie/show isn't on Netflix, I'm gonna torrent it. I'm not buying any dodgy channel subscriptions full of crap.
[+] mywittyname|7 years ago|reply
This is my view (except I don't pirate the content). In my eyes, content creators know that these services exist, and how many people use them. So if they make a decision to cut out a large portion of the market, then I guess it's not important for them to be enjoyed by everyone.

I don't want to manage and pay for dozens of services. I use iTunes/Spotify, Netflix/Prime, and Steam/GoG. Any new service is going to need to displace one of those. This probably means being 10x better at 1/10th of the price.

[+] empath75|7 years ago|reply
If those company think it’s about content libraries they’re going to lose.

All those companies think: we own a lot of media, we can just build a streaming media platform. And I think they’re way underestimating how hard it is to build the technology stack and processes that Netflix has.

Netflix has an engineering team and a development and deployment process that has some production studios attached to it.

Disney can probably copy what Netflix has today, but by the time they’ve done that, Netflix will have updated their platform hundreds of time, and I don’t think they’re going to be able to build an engineering team that can keep up.

[+] zimmerfrei|7 years ago|reply
>> Disney can probably copy what Netflix has today, but by the time they’ve done that, Netflix will have updated their platform hundreds of time

Last year Disney acquired BAMTech (a spun of MLB Media) - though less known, their technical chops when it comes to video streaming are already in Netflix territory.

https://www.theverge.com/2015/8/4/9090897/mlb-bam-live-strea...

[+] coretx|7 years ago|reply
Loads of comments regarding what "I" want or someone else wants. I think it's irrelevant and perhaps even dangerous to have the focal point on such popularities because the matter at hand is far more simple. Copyright grants a distribution monopoly >> Monopolists makes money monopolists style >> Internet breaks the distribution monopoly >> And now: copyright distribution monopolist buys ISP's ( distributors ) in order to regain control of the market. This is not about you, me, "people", it's simply business.
[+] digi_owl|7 years ago|reply
A large part of the initial appeal of Netflix, in particular for foreigners, was that they seemed to house digitized versions of straight-to-VHS movies that never left USA.

But after the initial raving success, the big studios have been clamping down on giving blanket access to their back catalog of obscurities. Looking for those extra percentages of leaving out the middle man.

[+] Tiktaalik|7 years ago|reply
I wonder if this market segment will evolve to be similar to the games industry, where market leadership shifts along with customers interests.

In the games industry a few big exclusives can shift fortunes significantly. The Playstation 4's significant success has come at the expense of the Xbox, and a driving factor of this success has been a superior exclusive content library.

[+] fenwick67|7 years ago|reply
The rhetoric by these gaint media companies about how "we're merging so we can compete with Netflix" is a con.

They say "we have to get more vertically integrated like Netflix to survive", but Time Warner Cable is already as vertical as Netflix! They have their own production and distribution already, and Netflix isn't an ISP.

[+] lev99|7 years ago|reply
Why does cable TV cost money? Wouldn't the advertising cover the distribution/production costs?
[+] sureaboutthis|7 years ago|reply
It's interesting it took ATT and Disney this long to figure out that this is a thing.
[+] richardthered|7 years ago|reply
The two main pricing models, today, are: 1) fixed monthly fee for one providers' content (e.g. Netflix) 2) pay-by-the-drink (e.g. $3.99 for this episode)

I spend a lot less on pay-by-the-drink services than I do on recurring subscriptions. Cognitively, every time I initiate a purchase, I pause, and decide whether I want to spend the money. With a subscription service, I only have to make that choice once.

What about a recurring 'credit' service? e.g. sign up for a $30/month recurring service, and you get 50 credits to watch content from a variety of providers?

[+] inanutshellus|7 years ago|reply
With ISPs becoming content companies, and with Net Neutrality dead they can charge companies like Netflix higher data rates....

Seems like Netflix needs to buy an ISP.

[+] black6|7 years ago|reply
Verizon wanted to divest itself of HuffPo almost immediately. The service provider(s) who ignore content and focus on the network infrastructure (Internet pipes, if you will) and practice(s) “net neutrality” as fundamental to the business model will come out on top. The vertical integration of service providers and content producers will only end poorly.
[+] TooBrokeToBeg|7 years ago|reply
Netflix isn't that good, with such a crappy lineup and limited old mainstream movies. It's just cheap. Our household and people at work (california) struggle to justify paying for it.
[+] TACIXAT|7 years ago|reply
This post's title is a nightmare. Original from the article:

>How Netflix sent the biggest media companies into a frenzy, and why Netflix thinks some are getting it wrong

[+] bootlooped|7 years ago|reply
I think maybe the title could use some punctuation or reworking

> Netflix Is Why AT&T bought Time Warner...

Ok, yes, they bought Time Warner

> Netflix Is Why AT&T bought Time Warner and Comcast...

They bought Comcast too?

> Netflix Is Why AT&T bought Time Warner and Comcast and Disney...

And Disney!?

> Netflix Is Why AT&T bought Time Warner and Comcast and Disney want Fox

AT&T bought Time Warner and Comcast; Disney want Fox?

[+] Bud|7 years ago|reply
This re-written headline could really use some punctuation for clarity, moderators.
[+] dang|7 years ago|reply
It's the HTML doc title as well as the URL slug, so not technically rewritten, but let's have a disambiguating comma.