2050 look-ahead: Streaming changed how we view entertainment. The future may look a lot like the old model

Editor’s note: One-fourth of the way through this century, TribLive is looking ahead to the next 25 years, using the events of the past 25 as a road map of what possibly is to come. This installment of the occasional series looks at entertainment.

Twenty-five years into the 21st century, it’s clear how home entertainment has changed:

• Reality TV pushed aside scripted programming and is becoming even more prevalent as media companies reduce their spending on broadcast networks that have declining viewership.

• Streaming finally gave consumers what they said they long wanted: the ability to choose channels of professionally created content a la carte from individual streaming services, leading many one-time cable subscribers to cut the cable cord.

• Viewers moved on from professionally created entertainment to embrace
the work of amateur content creators found on streaming services from YouTube to TikTok.

Michael D. Smith, professor of information technology and public policy at Carnegie Mellon University’s Heinz College and Tepper School of Business, points to Netflix’s decision to commission original programming with “House of Cards” in 2013 as the seminal moment. That move spurred a gusher of original scripted programming, which increased from about 349 original-scripted shows per year in 2013 to a peak of 600 in 2022.

“The crazy thing is Hollywood (in 2013) completely dismissed the threat that Netflix posed,” said Smith, who teaches a CMU course called “managing disruption in media and entertainment” and wrote the 2016 book “Streaming, Sharing, Stealing: Big Data and the Future of Entertainment” with fellow CMU professor Rahul Telang. “Talking to people at the time, they said, ‘Netflix is a distributor. Why should we worry about a distributor when we’re the content creators?’ And they were so wrong.”

Smith posits Netflix managed to popularize itself to such a degree that it’s almost become a consumer must-have — like a utility — through the mining and understanding of its customers’ interests using subscriber data. That data allowed the service to create a never-ending stream of new content that keeps consumers subscribing.

“Everybody else in Hollywood knew in the abstract (at the time) that Kevin Spacey had fans, Robin Wright had fans, (director) David Fincher had fans,” Smith said. “But Netflix knew exactly who from their data. That, to me, is the big difference, and they created different ‘House of Cards’ trailers focused on those groups. They could target directly to those people.”

By late 2019, the race to draw consumers to subscription streaming services was fully on with the launch of Disney+ joining Amazon’s Prime Video and Hulu in providing more streaming options with original programming. Max, including HBO content, followed along with Apple TV+, Peacock and Paramount+, a rebranding of CBS All Access, which launched in 2014.

With so many streaming options that consumers could more easily subscribe to and cancel than traditional cable packages, consumers began cutting the cable/satellite cord in increasingly large numbers, from fewer than 1 million cord-cutters per year in 2016 to roughly 5 million per year annually since 2019. Cable and satellite TV have lost more than 20 million U.S. subscribers since 2014.

As of 2020, 78% of U.S. homes subscribed to Netflix, Amazon Prime Video or Hulu, but the most recent Nielsen Gauge found viewership of YouTube dwarfed all the streaming services that offer professionally created content.

In November 2024, 41.6% of all TV viewing was by streaming (cable TV accounted for 25% of viewing and broadcast TV accounted for 23.7% of viewing). Among those who watched via streaming, 10.8% of all American viewing was on YouTube. Netflix ranked second among streamers at 7.7% and Prime Video third at 3.7% of viewing. YouTube says consumers globally streamed 1 billion hours daily using YouTube via smart TVs alone in 2024. That does not account for YouTube viewing on smartphones, computers and tablets.

‘What’s TV?’

William Schmidt, a veteran writer of TV shows who grew up in Swissvale, offered an anecdote from his wife, who teaches second grade at a Los Angeles private school.

“She asked (students) what they did over (Thanksgiving) break, if they watched TV,” said Schmidt, most recently a writer on the second season of Paramount+’s “Tulsa King.” “A kid raised his hand and said, ‘What’s TV?’ They had no idea what she was talking about. They all watch YouTube and that’s all they do.”

Smith argues that for decades Hollywood studios controlled access to the scarce financial and technological resources needed to make content and to the scarce channels needed to distribute that content. None of the previous technological shifts — for example, from radio to TV — changed the importance of those scarce resources. But the advent of YouTube and later Netflix created a new, more challenging source of scarcity: consumer attention.

The rise of streaming also impacts how media companies allocate their resources.

Declining viewership of linear broadcast television means there are fewer expensive, scripted shows on ABC, CBS, Fox and NBC. That has led to a greater reliance on lower budget, unscripted “reality” programs, which began to take over prime time following the premiere of “Survivor” on CBS in 2000.

And sports, which long has had a presence on TV networks, has become more important to those networks’ survival. Even cable is having to fend off streaming now that Netflix was in business with the NFL for Christmas Day games this year and with Prime Video striking a deal with the NBA.

Smith declined to predict what the next 25 years might bring for the entertainment industry, but he does see contraction in the short term.

“The big question is how much consolidation are we going to see in streaming platforms?” Smith said.

He anticipates Netflix and Amazon are sure survivors.

“Then the real question is, how many others?” Smith said. “Disney+ probably survives. Max is probably gonna be just fine. And it’s a small list after that.”

Entertainment analysts have predicted Paramount+ may have to merge with another service — possibly Peacock? — to survive. And if there aren’t corporate mergers that bring streaming services together, there will be more bundles.

Year of the bundle

An industry analyst and former streaming company business development executive who goes by the moniker Entertainment Strategy Guy wrote earlier this year that if 2023 was the year streaming services added ad tiers — a return to form for TV entertainment from before the advent of streaming — then 2024 is the year of the bundle.

ESG notes that bundling of streaming services — like Disney+, Hulu and ESPN+ for one price — is a way to decrease rising rates of consumers who churn in and out of services, signing up and then canceling, and a way to reduce the stall in subscription growth.

“The cable bundle was a monolith powered by local cable monopolies,” ESG wrote in May. “To have any TV, you had to have all of the TV. No churn allowed! These new bundles aren’t that. They will, though, take advantage of the power of bundling that cable TV benefited from.”

Smith points out bundling makes sense because there’s almost no added cost to a company for an additional stream of a show.

“What economics tells us is selling content in a bundle is more economically efficient than selling the same content individually,” Smith said. “We’re moving away from the traditional cable bundles we’ve always had, and we’re moving toward these new bundles that I think are bigger and broader.”

In many ways, everything old is new again: Ad tiers and bundling take consumers back to the way they consumed home entertainment at the start of the 21st century when subscriptions to the cable/satellite bundle were at their peak.