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Have We Reached Peak Streaming Service Fatigue?

May 17, 2019
Originally published on May 17, 2019 6:46 pm
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AUDIE CORNISH, HOST:

Disney is taking control of Hulu, the streaming service. Hulu is known for having a little bit of everything - original content like "The Handmaid's Tale," older shows like "Seinfeld" and "The Office" and current episodes of shows like "Chopped" and "House Hunters." Disney has a commitment to buy Comcast's stake in the company. Edmund Lee covers the media industry for The New York Times. He joins us from New York to talk about what this means for consumers. Welcome to the program.

EDMUND LEE: Thanks for having me.

CORNISH: Hulu has always had multiple owners. And part of its appeal to consumers was diverse ownership, right? And it also meant that they had access to all kinds of shows. Why is Hulu consolidated?

LEE: For its entire existence, it's been run by a committee because of the joint ownership. It was the parent companies of NBC, ABC and Fox. Because it was sort of built by committee, its ambitions and its direction was never always clear. Now finally, you know, Disney has to - Disney has a chance to take full control over it. They can do whatever they want with it and be more ambitious, more aggressive. That's really the reason. I mean, they had the opportunity, and they took it.

CORNISH: But Com's (ph) planning its own streaming service, right?

LEE: Yes.

CORNISH: And Disney has its own platform launching this year. CBS has had one for a few years. As someone who has cut the cord myself, I have to tell you I'm not looking forward to all these sign-ups. So what's going on?

LEE: Pay TV, cable satellite, these traditional business is eroding. Fewer people are paying for it. And they're getting Netflix subscriptions and CBS subscriptions and Hulu subscriptions. And so Disney, which owns a bunch of networks including ESPN and ABC, they've seen this. Their business has eroded. So they figured let's just go, you know, what they call over-the-top or directly to the consumer. I mean, Hulu has been around for a while. It's sort of - it's the leading contender after Netflix. So from Disney's point of view, it's actually nice to take control of something that's got, you know, over 20 million, getting up to 30 million subscribers - gives them a nice head start.

CORNISH: So with Disney now the full owner, does this mean a lot of the TV shows that people might have enjoyed on Hulu are going elsewhere?

LEE: So the key part of that is NBC, which is part of Comcast. They struck a deal so that, you know, even if they do - once they do buy out full control, NBC will continue to license its shows to Hulu. So shows like "Brooklyn Nine-Nine" and "The Good Place" will still be available. There is one other sort of glitch, though. After a three-year period, NBC could decide to pull them from the service and put it on their own. So you got a few years left.

CORNISH: Do they think people are willing to subscribe to seven or eight different services at a time?

LEE: So they all know. They've all done their market research, and they all, you know, have the same data, which is, you know, a household - the typical household probably won't pay for more than four or five services at the most. And they need to be one of the four or five. You know, it's - Netflix is clearly going to be at the top of that. And chances are Hulu is a strong second. So it's a fight for third and fourth place at this point. And that's why it's going to be tough. It's going to be a hard battle for all these companies.

CORNISH: So at the end of the day, what does this mean for consumers? If everyone is going off and sealing off their content and asking us to subscribe to them individually - basically, are we back to a cable scenario?

LEE: That is definitely a possibility. The difference, though, is that there is more choice. The problem that customers had with cable companies for years and years and years is they had to buy into a big bundle, like the cheapest you could pay is $40 or $50 for a bunch of channels maybe you don't watch.

Conceivably with, you know, with all these different streaming services, maybe there's a way for you to mix and match or have some more choice over which group of channels you want. Though, of course, the fact that they're all kind of cordoning off their own content and keeping it for their own service or their forthcoming service might end up looking like another kind of cable bundle. So that's the danger.

And you also have to have a broadband subscription, which you typically pay your cable company for. Chances are you're at the $100 mark after you pay for a bunch of these. So yes...

CORNISH: No. I am totally biased in this interview, America (laughter). Edmund Lee covers the media industry for The New York Times. Thanks so much.

LEE: Anytime. Transcript provided by NPR, Copyright NPR.