War is cyclical. It begins with fertile land, a resource not yet exhausted. The bounty and spoils may superficially change based on the objective or agenda.
Unlike real-world strife and calamity, where livelihood, enterprise and identity are at risk of totalitarian oppression, a digital war is percolating in the United States. It is a dozen-headed 4K Hydra monster snapping at its own varied necks. It is a battle royale waged upon licensing agreements, algorithms and alphanumeric passwords.
The streaming war has arrived and it threatens to completely dismantle the concept of content ownership and access. Forthcoming additions from the Walt Disney Corporation and Apple, both launching fall 2019, are out for blood and have the financial resources to enter this clash.
In a break from tradition, this year’s Apple Event promoted no hardware and no physically constructed innovation hailed as game-changer. Instead, Apple announced their official entry into the over-populated Netflix, Amazon Prime and Hulu streaming landscape with Apple TV Plus. Without a disclosed price point, it is a $2 billion firing shot assisted by the likes of Steven Spielberg, Oprah Winfrey and J.J. Abrams.
The most troubling new service is Disney’s forthcoming streaming platform Disney Plus, also set to launch this fall. With the recent acquisition of Fox movie studios and TV properties, the Walt Disney Corporation now owns 27 percent of the film industry and effectively reduces the number of large media companies from six to five.
Coupled with owning the world’s most lucrative franchises and intellectual properties, such as the Marvel Cinematic Universe, the “Star Wars” franchise, the “Avatar” films and a hundred year backlog of animated princesses and singing animals, Disney’s streaming arsenal is stacked against the competition and they intend to keep it all under the roof of their own global Mouse House. Over the last half-year, cancellations of Netflix produced Marvel series have portended this shift in control.
Further complicating this cluttered battleground of subscription services are entries from AT&T WarnerMedia in late 2019 and NBCUniversal in 2020.
The genesis of streaming content was both accidental and inevitable. Originally bundled free with a Netflix DVD delivery subscription in 2007, Netflix saw the future and reshaped their Los Gatos-based delivery service into a digital platform dedicated to this vision. In 2012 they released “Lilyhammer,” the first streaming exclusive series, and in 2019 alone they are expected to spend $17 billion in original content development, production and acquisition.
They have secured 51 percent of the United States with paid subscriptions, acquired a New Mexico-based production studio and generated $4.19 billion revenue in 2018.
Competitors to the throne have come in the form of Amazon Prime, Hulu and HBO Now, but up until now they have served as complimentary alternatives with programming overlap.
So why should any of this matter? After all, it is a free-market based on the competitive efforts of companies releasing product. It is less to do with the abundance of diverging platforms and a fleet of separate monthly charges. After all, scripted entertainment and prestige diversion are entirely elective and non-essential luxuries of the first world.
This is not a sustainable ecosystem. In order for one to succeed, another must fail. Such is the nature of a format war, even more so when the modes of distribution are at stake. Such was the case with the VHS and Betamax format war in the 1980s, and such was the case for the HD-DVD and Blu-ray conflict of the early 2000s.
Motion pictures went through such competitive turbulence in the early days of the art form, when they were first reaching the pinnacle of popularity in the late-1930s to late-1940s. Before the landmark Hollywood Antitrust Case of 1948, major movie studios only released their content only in theaters they owned, effectively controlling price and barring competition. The US Supreme Court ruled against the legality of this vertically integrated corporate structure that monopolized such modes of distribution. This is why there are many separate movie theater chains (AMC, Century, Regal, etc.) all screening basically the same material.
The danger lies in what should happen if any of these titans, each specializing in different forms of primary service (online megastores, device manufacturers and the leisure industry), should be defeated or fall upon their sword.
Apple has already been wrapped up in their own minor controversy with copyright and digitization of purchased content. When a digital file, such as a movie or a TV series, is purchased from an online distributer, the terms of the transaction mean the consumer leases the usage rights of media for as long as the distributor maintains their licensing agreements with movie studios. If these expires, or say the movie studio in question no longer wishes to renew the license, so too does the customer’s access to the purchased content. A Forbes article published on Sep. 13, 2018 Forbes discovered that “Reports have started to emerge of Apple completely deleting films from iTunes accounts even when they’ve been bought, not merely rented.”
In an ecosystem that is rapidly transitioning into a streaming-only future, the customer is entirely at the mercy of such practices, whether it is by monthly subscription charge or digital purchase. The limited duration of programming deals and the cutthroat push to acquire and generate in-house content already manifests itself in the constant wave of new inclusions and sudden delistings.
The most recent and highest profile instance of this was Netflix’s eleventh hour deal to keep temporarily keep “Friends” on their service. They paid $100 million to secure the AT&T WarnerMedia owned property “Friends” through 2019.
Streaming is a fickle, unsustainable and cannibalistic creature, greedy over its own already claimed and dominated territory. When the investment in content alone amounts to several billions of dollars per year per company, the consumer will be the first affected. Controls are already developed and are closer to implementation than we’d like them to be in this streaming war ramp-up.
Netflix suddenly pulled support for AirPlay functionality on Apple devices for their application on Apr. 7, 2019. The streaming giant stated, “We have decided to discontinue Netflix AirPlay support to ensure our standard of quality for viewing is being met.”
On Dec. 17, 2018, Synamedia, an independent video software provider, revealed an AI powered process designed to track and analyze viewing behavior. Once implemented in a streaming service’s programming, the software has the ability to differentiate viewing behaviors in the effort to curb fraudulent password sharing.
In a 2018 Magid Video Entertainment Survey it was found that 26 percent of people age 22 to 40 use passwords from other peoples’ accounts to access streaming services. In the battleground of content consumption and the profit-loss represented by such behavior, it is not a question of if password sharing will be restricted, if not altogether eliminated, but by when. “How much money is it worth?” asked Magid executive vice president Jill Rosengard Hill, “It’s really hard to say. But it’s going to be a bigger question as more and more streaming TV services become available.”
The monthly buy-in model becomes more nebulous the more centralized that corporately owned content becomes within corporately controlled distribution platforms. With a juggernaut like Disney entering the fray, the risk of monopolizing the market becomes less a likelihood and more a certainty.
Another factor is Disney’s practice of selective release of properties. This was tolerated in the age of VHS and DVD when the Mouse House manufactured demand for their half-century backlog worth of animation by placing their content in a metaphorical “vault.” Although frustrating, it didn’t pose any risk to denying the customer right to access content they already purchased. Videotape and DVD don’t suddenly erase themselves or become functionally inert because of a corporate business tactic.
Although the greed of the entertainment industry remains the same, motivated by a giant’s insatiable money-lust, the scope has evolved. Unlike the Old Hollywood studio system, the now obsolete VHS or the on-life-support Blu-ray disc format, this present streaming war of so many behemoths all vying for control of the future risks mutually assured destruction.