Streaming services have significantly disrupted the traditional television market over the past decade.
With a rapidly growing subscriber base, these platforms are transforming the way we consume media.
This article will explain how the streaming business works and compare it to cable television.
Table of Contents
How the Streaming Business Works
Content Creation and Acquisition
To begin with, streaming platforms either create original content, purchase content from other providers, or do a mix of both.
Content can include films, TV series, documentaries, concerts, and more.
Original content gives platforms unique selling points and can help attract and retain subscribers.
For example, Netflix’s success has been partially attributed to its high-quality original content, such as “Stranger Things” and “The Crown”.
Alternatively, a platform might acquire the rights to existing content.
These rights can be exclusive, meaning that no other service can stream that content, or non-exclusive.
Monetization Strategies
Streaming services usually monetize their content through subscription fees.
Users pay a monthly fee to access a library of content.
Some platforms offer tiered subscriptions, with different price points offering various benefits such as access to additional content, more simultaneous streams, or 4K streaming.
Other platforms, like Hulu and Peacock, offer an ad-supported service for a lower fee or even for free.
They generate revenue from both subscriptions and ads.
Lastly, some platforms, like Amazon Prime Video, are part of a larger subscription package that includes other benefits like free shipping for online purchases.
Technology Infrastructure
Streaming services rely heavily on technology infrastructure.
This includes servers to store and distribute content, software to manage and track user subscriptions, and algorithms to personalize content recommendations.
Many platforms invest heavily in this infrastructure to ensure a smooth and enjoyable user experience.
How Streaming Compares to Cable
The streaming business differs considerably from the traditional cable TV model.
Flexibility and Customization
Streaming services offer more flexibility and customization compared to cable TV.
Users can watch content whenever they want, without having to follow a set schedule.
They can also watch content on different devices, not just on a TV.
Furthermore, streaming platforms often use algorithms to recommend content based on users’ viewing habits, allowing for a more personalized experience.
Pricing
From a pricing perspective, streaming services tend to be more affordable than cable TV.
The average cable TV subscription can cost upwards of $100 per month, while most streaming services cost between $5 to $20 per month.
However, subscribing to multiple streaming services can add up and become as expensive as a cable subscription.
Content
The cable model offers hundreds of channels, while streaming services typically have smaller libraries.
However, the nature of these libraries is different.
Cable TV offers a broad array of current programming, including live sports, news, and reality TV shows, which can be a draw for some viewers.
On the other hand, streaming services excel at providing access to large catalogs of older shows and movies, as well as increasingly impressive lineups of original content.
Contracts
Finally, cable companies usually require a contract, locking in customers for a year or more.
This contrasts with streaming services, which typically operate on a month-to-month basis, allowing customers to cancel at any time without penalty.
Frequently Asked Questions
What are the advantages of streaming services over cable?
Streaming services generally offer more flexibility than cable TV.
They allow users to watch content anytime and anywhere, and on a variety of devices.
Moreover, streaming services usually have no contracts, so users can cancel their subscriptions at any time.
They are also often cheaper than cable subscriptions, although costs can add up if users subscribe to multiple services.
Are there any advantages of cable TV over streaming?
Yes, cable TV has a few key advantages. First, it provides access to live programming, such as sports, news, and events, which some streaming services do not offer.
Second, cable packages often include hundreds of channels, covering a wide range of interests.
Lastly, cable TV provides consistent access to new episodes of current TV shows as they air.
Can I access streaming services on my television?
Most streaming services are compatible with smart TVs, and you can also access them via streaming devices like Roku, Apple TV, Amazon Fire TV, and Chromecast.
Some gaming consoles, such as PlayStation and Xbox, also support streaming apps.
If you have a traditional TV without smart capabilities, you’ll need one of these devices to access streaming services.
Is the content on streaming platforms available permanently?
Not necessarily.
While original content produced by a streaming service is usually available as long as you’re subscribed, other content may come and go due to licensing agreements.
A movie or TV show available on a platform one month might be gone the next.
If I subscribe to multiple streaming services, will it cost more than cable?
It can. If you subscribe to several streaming services, the total monthly cost could be comparable to a cable subscription.
It’s important to consider what content you value most when deciding between cable and various streaming options.
Do all streaming platforms require a subscription?
Most streaming platforms require a subscription, but some offer a free, ad-supported version.
For example, Peacock has a free tier with limited content, and Hulu offers a cheaper, ad-supported subscription alongside its ad-free version.
Do streaming platforms offer 4K and HDR content?
Yes, many streaming platforms offer 4K and HDR content, but usually at a higher subscription price.
Netflix, Amazon Prime Video, and Disney+ are among the services offering 4K and HDR content.
Be sure to check the specific platform for availability and pricing.
Conclusion
Both streaming and cable have their advantages and target audiences.
Streaming services have certainly disrupted the TV industry with their innovative business model, attracting a large and growing number of subscribers.
Yet, cable TV remains a dominant force, especially for those seeking live programming and a wide variety of channels.
The future of television may not be a matter of streaming versus cable, but rather, how these two models can coexist and continue to evolve to meet changing viewer preferences.
