A Geek With Guns

Chronicling the depravities of the State.

Subscription Fatigue

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Daniele Bolelli announced that he was going to take his excellent History on Fire podcast to a new subscription podcast service called Luminary. I don’t blame him. As he said, he’s been putting full-time hours into a podcast that is currently paying part-time wages and Luminary appears to be offering him a better deal. However, Luminary is a new player in the already crowded premium podcast market. There are quite a few services offering podcasters a mechanism to monetize their content. The problem is that they’re all silos that have a handful of exclusive podcasts available, which is the same problem facing the movie and television streaming market at the moment.

Rewind just a few years ago when Netflix was the king of streaming movies and television shows. You paid Netflix a monthly fee to access all of the content it had available and life was pretty good. But Netflix’s success convinced a lot of content creators that they could make big money in this space without giving a third-party like Netflix a cut of the action. Today if you want to stream the new Star Trek series, you need to subscribe to CBS’s streaming service. If you want to stream Marvel movies and shows, you’ll soon have to subscribe to Disney’s streaming service. If you want to stream Man in the High Castle, you’ll have to pay for Amazon Prime. Hell, DC Entertainment is starting its own streaming service, which is where you’ll probably have to go if you want to watch the latest Batman series.

Compare this to music streaming services. Whether you subscribe to Apple Music or Spotify doesn’t make a huge difference. Both services provide largely the same content. That’s because the record labels never entered the streaming market themselves. Instead they let far more competent companies handle the delivery mechanism. The fact that music piracy is down shows that people are willing to pay for convenience. But would this story be the same if each record label was operating its own service? Would people who currently pay a single monthly subscription to Apple Music or Spotify be willing instead to pay a monthly fee to Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI simultaneously?

As more and more content, software, and services migrate to a subscription model we’re going to start seeing what I like to refer to as subscription fatigue. Consider just a small sample of the subscription fees an individual could find themselves paying today. You have the obvious service subscriptions such as a home Internet connection, cell phone plan, garbage collection, water, etc. But people have to get work done so they may also find themselves paying a subscription fee for Microsoft Office 360, Adobe Creative Suite, Dropbox Plus, and maybe an important app or two on their phone. All work and no play makes for a dull life so many people may subscribe to a few entertainment services. They may pay a subscription fee for cable or satellite television, Netflix, Disney+, World of Warcraft, a phone game or two, and maybe soon Google Stadia (if Stadia uses a subscription fee). Then you have their daily commute to consider. What will they listen to as they drive to work? Maybe Apple Music or Spotify subscription, Luminary, and Stitcher Premium.

All of these small monthly subscriptions add up quickly and each household only has so much money to spend. At some point an individual may decide that they can’t afford both Netflix and Disney+. Does that mean they will cancel one and forego that service’s exclusive content or does that mean that they will simply pirate that service’s exclusive content? I’d bet the latter in most cases. And once they’re pirating one service’s content, they may decide it would be financially smarter to cancel their other subscription and pirate that service’s content too.

This post isn’t meant to be a condemnation of subscription services. I understand that people need to make a living and certainly don’t disparage people for trying to do so. But I do question the sustainability of having so many silos. I think the current music streaming model where content creators are largely separate from content deliverers and exclusive access deals are at a minimum is the most sustainable model. That way the content creators get paid and the content consumers can take their pick of delivery services without having to sacrifice a lot of their content. I think the diaspora way from Netflix is going to hurt the movie and television streaming markets (although some large players like Disney will likely do well with their service) in the long run. I also think it would be wise for Podcast streaming services to adopt the music streaming model where content creation is mostly separate from delivery and exclusive content deals are the exception rather than the rule. And when game streaming becomes more viable (which is may with Google Stadia), I think it would be wise for game creators to avoid being shuffled into a series of exclusive silos rather than providing their games to a wide number of streaming services. All of these services are ultimately competing not just with each other but with the free alternative of piracy. People will pay for convenience but they will only pay so much.

Written by Christopher Burg

March 25th, 2019 at 10:00 am

Posted in Economics

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