Spotify is great. $10 a month gets you access to pretty much all the music ever made, and you’re done. We’re not going to get that kind of thing for TV shows and movies.
Wouldn’t it be nice if one $10 subscription could get you all the TV shows and movies you wanted? A lot of people imagined Netflix would turn into that, and honestly we can’t blame them. When Netflix launched their streaming service, it was a veritable smorgasbord, offering access to almost every TV show you could imagine. The library has shrunk every year since then, even as Netflix spends more and more money. Netflix plans on spending $8 billion on original content this year, meaning they’ll have around 700 original movies and TV shows by the end of the year.
Which has fans asking: why are fewer and fewer of the shows and movies they already love showing up? Why isn’t Netflix just buying that content, instead of spending all this money on original programming? To put it another way: why can’t Netflix just become Spotify for TV?
The answer, basically, is way too much money is at stake for that to ever happen.
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The Music Industry Was Desperate
The story of the music industry is a familiar one: massive CD-driven growth in the 90s followed by a digital-driven decline in the early 2000’s. Here’s a chart from the RIAA, showing what that looks like:
The dark blue dominating the 90s represents CD sales, and the purples and pinks above that in recent years represents subscription services. That money doesn’t begin to cover what was lost, but it’s growing in an industry that is otherwise in decline.
This is why the music industry is willing to play ball with companies like Spotify: they need something to stem the losses. Sure: every person in the USA paying $10 would represent a fraction of 90s CD revenue, but it’s better than nothing. And who knows? If growth continues, and streaming prices eventually go up, maybe the music industry will get back to where it was.
TV and Movie Companies Are Bigger Than The Entire Music Industry
Let’s back up and look at that chart again—notice that 1999 was a high point for the US record industry. That year saw the industry earn nearly $15 billion, most of that made up of CD sales.
The music industry was and still is massive, but even in 1999 the entire sector doesn’t really compare with single players in the TV and movie industry.
These huge media companies are the ones that own the rights to basically every TV show and movie you’ve ever loved, and there’s no way those companies could begin to maintain that level of revenue in a future where…
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