Why Watching Your Favorite Shows Is Getting More Expensive

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It’s a Tuesday night, and you just got back from work. There are dishes in the sink that need to be washed, and laundry that needs to be folded, but you just need a forty-five minute break before addressing a near-constant stream of responsibilities. You turn on the TV and open a streaming app, only to be met with a notification – the price of the subscription is going up $2, effective immediately. Mentally, you start to tally up the cost of everything you pay to access your favorite shows, movies, and music – it’s getting to be too much.

How did cutting cable for a $7 Netflix subscription turn into this? And will good TV and movies ever be cheap again? 

The Nature of the Streaming Economy

Before streaming, the entertainment economy relied largely on television advertising revenue, as well as sales of cable TV packages and movie theater tickets. The profitability of streaming services, on the other hand, depends on attracting and retaining huge subscriber bases, because consumers have unlimited, 24-hour access to a much larger swath of content, and we only make payments periodically to maintain that access, rather than paying for individual pieces of content. 

In recent years, streaming services like Netflix and Hulu have increasingly taken over the market for home consumption of television and movies, and in 2023, for the first time, Americans officially spent more of our screen time on streaming than on cable TV. This is especially true for young people; only 34% of people between the ages of 18 and 34 report regularly watching cable TV, compared to 81% for those over 65. 

However, even as cable and satellite TV continue to shrink in market share, the streaming economy has a mixed track record and an even bumpier road ahead. Over the past few years, increasing numbers of consumers are canceling their subscriptions to major streaming services, and many streaming operations are struggling to turn a profit. Working families are balking at higher subscription prices, the increasing infiltration of ads, and crackdowns on account sharing

As streaming grew in popularity, everyone and their mother rolled out their own streaming app, and the field became crowded. Instead of the way several cable channels would often share the airing rights to a show, streaming services bid on exclusive streaming rights as a way to compete with one another. As a result, prices for the most popular movies and shows are jacked up to an extraordinary degree in the streaming economy, and services pour money into developing and buying more content than any one of us could possibly watch – or enjoy. As an example, Netflix reportedly paid upwards of $500 million for the streaming rights to Seinfeld, which is only one of its 1,800+ shows on offer. 

In lieu of a base of profits from advertising, which is how cable made its money, streaming companies also have to maintain massive subscriber bases in order to turn a profit. But when consumers start to cancel our subscriptions – because we’re facing new economic hardship, or because we’re unsatisfied with the quality of the content being offered – companies make moves to try to maximize their gains. These include higher subscription prices; the rolling back of ad-free entertainment, once one of the biggest draws to streaming as an alternative to cable; and cracking down on the number of devices that can be logged in to one account. While over time these measures drive viewers away, in the short term they can buoy profits as consumers feel locked into familiar sources of entertainment.

These phenomena, as well as others including companies disappearing digital content from the internet entirely if it proves insufficiently profitable, have led those observing the state of the entertainment world to draw the following conclusion: “Now turmoil rules the industry.” 

Winners & Losers

We should be clear about the interests at stake in the streaming economy, and about the fact that two groups are bearing the brunt of this “turmoil:” average working-class consumers, and workers in the entertainment industry. Massive development budgets and sky-high price tags for streaming rights to our most beloved movies and TV shows do not translate into higher pay for the vast majority of actors, writers, and crew members. While the entertainment industry has always been marked by inequality between Hollywood executives and A-list stars on the one hand, and artists barely getting by on the other, the streaming economy has heightened the divide. People who had worked on a piece of content used to make money – good money, in some cases – from syndication and reruns on cable. Now, a show can be watched a million times on Netflix, and most of the workers who created it will see pennies, or nothing at all, in “residuals.” 

This growing gap was part of the fuel for the historic writers’ and actors’ strikes last year. Workers were rightfully outraged, and the WGA made a significant leap forward for all entertainment workers when they won a system for streaming revenue bonuses in their contract. In the coming years, the labor movement can continue to play a central role in pushing back against the most exploitative features of the streaming economy, and all eyes should be on this issue especially going into a potential strike of entertainment workers represented by IATSE and the Teamsters this summer

How Can This Broken Model Be Fixed?

In theory, streaming offers a number of positives to consumers, namely more convenient and immediate access to our favorite movies and TV shows. However, the realities of the streaming economy and its effect on the entertainment industry as a whole demonstrate that under capitalism, technological innovations are never put to use for the purpose of improving working people’s quality of life. Rather, they are rolled out in a chaotic and uncoordinated fashion, for the primary purpose of garnering maximum profits for those at the top (Netflix, claiming it has no choice but to hike up its subscription prices, made over $12.9 billion in profits last year). The same can be said for technology which has much more power to change our daily lives for better or worse, like artificial intelligence

The streaming economy isn’t working for all capitalists; modern capitalism and its extraordinarily high upfront costs result in industries which tend toward monopolization and centralization, and as a result, many streaming companies other than those at the very top are struggling to remain profitable and keep their subscribers. Because of all these problems, we may see fundamental changes to the streaming model in the coming years. But whatever replaces it will have a similarly damaging impact on consumers, entertainment workers, and on art as a whole. 

Following the example set by the 2023 WGA strike, only militant struggle from workers in the arts and entertainment industries, in solidarity with all of the working people and families who enjoy the fruits of their labor, can point us toward a healthy cultural environment: one where we are all able to produce and consume quality art which reflects our experiences, struggles, and perspectives. An example of a partial victory in this realm can be found in the workers movement that pushed forward the New Deal, which included significant arts programs as a method of bolstering the interwar economy and fostering cultural output in the U.S. Art serves a crucial role in society, and it should be accessible both to those who wish to produce and consume it. Only by fighting to destroy capitalism, and the profit motive which will always stifle human creativity, can we achieve this goal. 

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