How Streaming Services Are Re-Inventing the Wheel

It’s undeniable: Streaming services are beginning to look a lot like cable companies — or at least like networks with enticing cable packages. For between $7 to $15, you can nab a subscription to one (or most likely more than one) of the many channel-esque providers.

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Although at one time you could probably name all the big subscription-based streaming services — Netflix, Hulu, HBO Now, Amazon Prime — the sheer amount of options now is starting to feel like reinventing the wheel. Sure, people may be cutting out cable packages to cut costs — and stop paying for bundled channels they don’t want — but streaming services have created a real “wolf in sheep’s clothing” situation. If Orange Is the New Black, then streaming channels is the new cable bundle.

How Did Cable Take Off?

Cable got its name because radio frequency signals are transmitted through coaxial (and fiber-optic) cables, as opposed to early broadcast television, which transmitted programming over the air to television antennas. Originating in the states in 1948, cable was a way to remedy over-the-air TV’s limitations. Often, distance and mountainous terrain made it tricky for folks to receive broadcasts, so as cable picked up steam, communities established shared antennas at higher elevations to receive signals. Within four years, 70 cable systems provided programs to roughly 14,000 homes across the U.S.

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Cable operators soon learned that they could pick up distant broadcasts. This revelation reshaped their role. Instead of purely transmitting broadcast signals, they were able to provide subscribers with options. This, in turn, created competition with local networks, leading the Federal Communications Commission (FCC) to implement restrictions on cable systems’ ability to provide folks with distant signals.

This “freeze” on the development of cable systems occurred in the 1960s, when cable served 850,000 users, and carried into the 1970s. By 1972, the country’s first pay-TV network debuted: Home Box Office (HBO). Rather quickly, HBO’s success paved the way for a national satellite distribution system as well as a bevy of new networks. By 1980, a whopping 16 million households subscribed to cable.

Netflix Kicks Off the Streaming Revolution

Over the next few decades, cable saw a plethora of new advancements — digital cable services, video-on-demand services and high-def quality. By the late 2000s, around 800 programming networks provided services to about 93% of Americans. All the while, another game-changer was brewing on the horizon: Netflix.

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Founded in 1997, Netflix initially started out as a DVD rental service — like going to Blockbuster, but without the need to leave your house and without those pesky late fees. The company mailed movies to customers for a low monthly subscription fee. By 2010, the company changed gears. It retained the rental business for physical media, but it also kicked off the streaming revolution. Just two years later, Netflix took another giant step forward and started producing and distributing films.

The platform’s most-watched “Netflix Original,” Orange Is the New Black, debuted in 2013 and with all the first season’s episodes available at once, the show introduced viewers to the idea of marathoning shows with more ease than traditionally allowed by rental services. Around the same time, the streaming service acquired the rights to stream earlier seasons of AMC’s hit show Breaking Bad, which was entering its final on-air season. Essentially, this allowed new viewers to catch up with the show in real time, garnering AMC more viewers than ever before — an early example of Netflix’s power and position in the industry.

As of April 2019, Netflix reported more than 148 million paid subscriptions worldwide with 60 million of those hased in the U.S. alone. However, while every show and movie seemed to be on Netflix five years ago, things have changed drastically. Now, the platform has to compete with a myriad of streaming services for rights to network shows and blockbuster films.

For example, in 2008, Netflix signed a $20 million dollar deal with Starz, nabbing the rights to stream 2,500 shows and movies. In 2019, the company responded to viewer outrage when it announced the service’s rights to the fan-favorite TV show Friends were ending. To renew the rights to this single show, Netflix paid $100 million dollars to squeeze out the competition.

Competition Enters the Ring

Now, users have a myriad of subscription-based service options, from Amazon Prime, HBO Now and NBC’s Peacock to CBS All Access, Apple TV+, Disney+ and Hulu — which offers Hulu Live (literally cable…?) and holds the distinct honor of being the first streaming service to nab a Best Drama Emmy for The Handmaid’s Tale. By fragmenting into channel-esque services — and outbidding each other for the rights to beloved shows — all these streaming services seem to be reinventing the wheel. Of course, with many of them operated by the corporations that run cable companies, this shouldn’t come as a surprise.

Photo Courtesy: Hulu/IMDb

If users want to watch anything under the Disney-Pixar-Fox-Lucasfilm-Marvel-National Geographic headings, they need to pay for Disney+. In just a single day, Disney+ signed up 10 million users — more than many small services have ever signed up in total. Meanwhile, HBO, which is set to launch a new premium streaming service called HBO Max, has struck a deal with Cartoon Network and acquired the much sought-after rights to Friends and The West Wing.

Gone are the days when everything was on Netflix for less than $10 a month. Now, the average American subscribes to about three services — or that was true before the emergence of Disney’s and Apple’s platforms. From a few hobbyists kickstarting cable TV to Netflix’s internet-based streaming service, the ways to watch TV shows have shifted greatly over the last near-70 years. In the end, whether it’s cable bundles or that fourth streaming subscription someone just had to have, we’re still paying for a bunch of media we don’t actually want.